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NEWS RELEASE TRANSMITTED BY CCNMatthews
FOR: HIGH RIVER GOLD MINES LTD.
TSX SYMBOL: HRG
AUGUST 13, 2002 - 08:33 EDT
High River Gold Announces 2Q Earnings Of $2.0 Million
Significant Increase In Revenue And Cash Flow
TORONTO, ONTARIO--
All amounts are expressed in Canadian dollars, unless otherwise
stated.
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Financial Highlights for Second Quarter
Revenue increased 371% to $25 million
Cash flow increased from $0.3 million to $5.3 million
Earnings increased to $2.0 million from a loss of $1.7 million
/T/
The significant improvement in the financial results of High River
Gold Mines Ltd. reflects the consolidation, for the first time, of
the operating performance of the Russian company, OJSC
Buryatzoloto, in which High River recently increased its equity
interest to 51% on a fully diluted basis.
For the quarter ended June 30, 2002, consolidation of the
Buryatzoloto operations, together with an improved gold price,
resulted in a consolidated profit of $2.0 million, or $0.03 per
share, on gross revenue of $25.1 million. This compares to a loss
of $1.7 million, or $0.05 per share, on gross revenue of $5.3
million for the same period in 2001. Cash flow from operating
activities for the period increased to $5.3 million, or $0.07 per
share, from $0.3 million, or $0.01 per share, for 2001.
High River's financial statements now consolidate the operations
of Buryatzoloto on a going forward basis beginning April 1, 2002.
Prior to that date, the Company reflected its interest in the
earnings of Buryatzoloto on a 26.48% equity basis. The Company's
six month results, therefore, represent a combination of
consolidation for the second quarter and equity accounting for the
first quarter. For the six month period ended June 30, 2002, High
River had net income of $1.4 million, or $ 0.03 per share, on
gross revenue of $33.3 million. This compares to a loss of $3.4
million, or $0.10 per share, on gross revenue of $11.6 million for
the same period in 2001. Cash flow from operating activities for
the period increased to $6.7 million, or $0.12 per share, from
$0.7 million, or $0.02 per share, for 2001.
High River's consolidated working capital position at June 30,
2002 was $17.3 million compared to $1.9 million as at December 31,
2001.
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(Thousands of $ Cdn except
per share amounts and #
of shares) Three Months Ending Six Months Ending
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June 30, June 30, June 30, June 30,
2002 2001 2002 2001
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Revenue 25,096 5,325 33,264 11,615
Net Income (Loss) 2,035 (1,656) 1,400 (3,403)
Net Income (Loss) per
Share 0.03 (0.05) 0.03 (0.10)
Cash Flow from Operations* 5,310 304 6,710 719
Cash Flow per Share 0.07 0.01 0.12 0.02
Weighted Average Shares
o/s 75,488,558 35,651,155 55,528,957 34,029,138
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* Before change in non-cash working capital and convertible
debentures
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Production Highlights
Buryatzoloto owns and operates two producing gold mines in
southern Siberia and is one of Russia's leading gold producers.
For the first six months of 2002, Buryatzoloto produced 76,036
ounces of gold (100%) at a total cash cost of US $191 per ounce
and is on schedule to achieve the full year plan objective of
150,000 ounces. The increased cash cost resulted primarily from
the elimination of the Government rebate on qualified exploration
expenses. The power line construction project, connecting the
Zun-Holba Mine to the low-cost regional power grid, remains on
schedule and is expected to be commissioned before the end of the
year. Buryatzoloto is essentially unhedged and realized an average
gold price of US $299 per ounce for the period.
Near record gold production was also achieved at High River's
50%-owned New Britannia Mine, located in Snow Lake, Manitoba. Gold
production for the six month period was 57,847 ounces (100%) at a
total cash cost of US $196 per ounce. On an annualized basis, New
Britannia is well ahead of the full year target of 110,000 ounces.
New Britannia realized an average gold price of US $308 per ounce
for the period, a significant increase from US $267 received in
2001.
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Production Results (ytd) New Britannia Mine Buryatzoloto Mines
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2002 2001 2002 2001
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Gold Production (100%) (oz) 57,847 54,278 76,036 72,891
High River Share (oz) 28,923 27,139 42,474 19,302
Total Cash Cost (US$/oz) $196 $190 $191 $167
Tonnes Milled 378,452 357,128 232,121 225,972
Head Grade (g/t) 5.06 5.03 10.81 10.69
Recovery (%) 93.9 94.0 93.8 93.0
Realized Gold Price
(US$/oz) $308 $267 $299 $262
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Project Updates
Berezitovoye Gold Project
In July, High River entered into an agreement to acquire the
Berezitovoye Project, located in the Amur Region of southern
Siberia, Russia. The Berezitovoye deposit is amenable to low-cost,
open-pit mining and contains reserves of 1.38 million ounces of
gold and 6.49 million ounces of silver, based on the Russian
classification system. An audit of the reserves, being conducted
by Roscoe Postle Associates, Inc. of Toronto, is currently
underway.
Taparko Project
During the quarter, High River increased its interest in the
Taparko Gold Project in Burkina Faso, West Africa to 80%. The
Company also entered into an agreement with AXMIN Inc. to jointly
fund a study to evaluate the feasibility of a combined mining
operation between Taparko and AXMIN's nearby Bouroum deposit. High
River has commenced an exploration programme, budgeted at US
$500,000, to locate additional near-surface gold resources on the
Taparko property to augment the previously reported unclassified
gold resource of 1.04 million ounces contained in 12.6 million
tonnes at an average grade of 2.6 grams of gold per tonne.
New Britannia Exploration
A regional exploration programme to discover satellite orebodies
within trucking distance of the New Britannia mill has commenced.
This programme is being managed by High River on behalf of the New
Britannia joint venture.
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FOR FURTHER INFORMATION PLEASE CONTACT:
High River Gold Mines Ltd.
David Mosher
President and CEO
(416) 947-1440
or
High River Gold Mines Ltd.
Don Whalen
Chairman
(416) 947-1440
www.hrg.ca
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