NEWS RELEASE TRANSMITTED BY CCN NEWSWIRE
FOR: HIGH RIVER GOLD MINES LTD.
TSE SYMBOL: HRG
MARCH 21, 2002 - 08:33 EST
High River Gold Receives Regulatory Approval For
Purchases Of Buryatzoloto Shares
TORONTO, ONTARIO--High River Gold Mines Ltd. is pleased to
announce that it has received approval from Canadian regulatory
authorities and from the Ministry of the Russian Federation for
Anti-Monopoly Policy and Support of Businesses, for its share
purchase transactions in the Russian company, OJSC Buryatzoloto.
In three separate transactions during 2001, High River acquired
1,689,340 ordinary common shares and 197, 220 convertible
preferred "A" shares of Buryatzoloto, increasing its equity
interest to 54.45% of the issued common shares and 33.67% of the
issued convertible preferred "A" shares. Final documentation of
these share transactions is proceeding. Upon full conversion of
the preferred "A" shares, High River's interest would be 51.0%.
Buryatzoloto, the third largest gold producer in Russia, owns and
operates two high-grade, underground gold mines with substantial
growth potential in the Republic of Buryatia, southern Siberia.
Buryatzoloto has established itself as a very credible mining
operator and, in 2001, celebrated its 10th anniversary since
becoming a corporation. The company has worked hard to provide
transparency. They operate according to Gold Institute standards,
their financial reports meet international accounting standards
and are audited by PricewaterhouseCoopers LLP. They have state of
the art computer systems throughout the company, satellite
communication between head office and the mines, and are in the
process of implementing a company-wide management information
Since High River's involvement in 1995, Buryatzoloto has increased
annual gold production significantly, from 57,000 ounces per year
to 147,000 ounces per year while reducing total cash cost per
ounce from US $238 to around US $175. Buryatzoloto has a large
high-grade gold resource of approximately 5.3 million ounces with
an average grade of 15.7 grams of gold per tonne, of which 1.4
million ounces, grading 17.4 grams of gold per tonne, are in the
To date, High River has accounted for its investment in
Buryatzoloto on an equity basis. Having now achieved an equity
interest in excess of 50%, High River intends to financially
consolidate the operating results of Buryatzoloto as an operating
subsidiary beginning April 1, 2002. Financial consolidation is
expected to have a positive impact on High River's future
consolidated revenue and cash flow reporting.
High River and Buryatzoloto jointly intend to grow their existing
assets and build on their operational success and expertise to
aggressively acquire and develop other precious metal projects
within Buryatia and throughout Russia. The management teams of
High River and Buryatzoloto have developed a close and effective
working relationship over the past six years. The companies have
cross directorships; High River has two directors on
Buryatzoloto's board and Buryatzoloto has two directors on High
River's board: Valery Dmitriev, Director General and CEO, and
Alexandre Balabanov, Chairman.
The European Bank for Reconstruction and Development (EBRD), the
most important lender to Russia (approximately 3.3 billion euros),
is also involved with Buryatzoloto as a debt and equity partner
and has two directors on the Buryatzoloto board. The EBRD views
Buryatzoloto as one of its most successful Russian investments and
has indicated it is prepared to consider financing any new
Buryatzoloto/High River project on its merits, a clear statement
of the trust and confidence that the three parties have developed.
In December, Buryatzoloto and the EBRD closed a US $8.15 million
loan facility to fund construction of an 86 kilometre-long power
line to connect the Zun-Holba Mine to the regional power grid.
The power line is expected to be commissioned before the end of
2002 and is projected to significantly reduce operating costs at
Zun-Holba as well as provide a reliable source of energy to remote
districts in the Republic of Buryatia.
As part of High River's focus on Russia, David Mosher (President
and CEO) and Dr. Laurence Curtis (director), together with a
technical team from Buryatzoloto, are currently evaluating a
number of advanced projects in Russia for possible acquisition.
FOR FURTHER INFORMATION PLEASE CONTACT:
High River Gold Mines Ltd.
President and CEO
High River Gold Mines Ltd.