NEWS RELEASE TRANSMITTED BY CCNMatthews
FOR: HIGH RIVER GOLD MINES LTD.
TSX SYMBOL: HRG
AUGUST 26, 2003 - 08:55 ET
High River Gold Announces Second Quarter Results
TORONTO, ONTARIO--(TSX:HRG) - High River Gold Mines Ltd. today
reported production and consolidated financial results for the
period ending June 30, 2003. All figures are in Canadian dollars
unless otherwise stated.
- Attributable gold production for the quarter was 28,986 ounces
(59,978 ounces, ytd) at a total cash cost of US $231 per ounce
(US $222 per ounce, ytd)
- Consolidated operating cash flow for the quarter was $5.0 million
($10.0 million, ytd)
- Feasibility studies were initiated during the quarter for the
Berezitovoye Gold Project in Russia and the Taparko Gold Project
in West Africa
High River's consolidated financial and production results for
2003 continue to benefit from the excellent operating performance
of the Russian company, OJSC Buryatzoloto ("Buryatzoloto"), in
which the Company held a 54.1% equity interest on June 30, 2003.
Unfortunately, operating difficulties at the New Britannia Mine
(New Britannia), combined with a higher Canadian dollar, resulted
in an overall reporting loss for the quarter.
In support of the Company's aggressive strategic plan to grow its
gold production and gold reserve base, High River commenced
feasibility studies at its Berezitovoye Gold Project
("Berezitovoye") in Russia and its Taparko Gold Project
("Taparko") in West Africa during the period. The successful
development of these projects could add significantly to High
River's production profile.
High River is well funded with approximately $30 million in its
treasury and continues to pursue new, advanced projects and
growth opportunities in both Russia and West Africa.
As at June 30, 2003, the Company's gold production interests
consisted of the 54.1% equity interest in Buryatzoloto and a 50%
joint venture interest in the New Britannia Mine. High River's
attributable gold production for the first six months of 2003 was
59,978 ounces at a total cash cost of US $222 per ounce, almost
equivalent to the 60,482 ounces for the same period in 2002. The
prior year results reflect a 26.5% interest in Buryatzoloto for
the first quarter and a 55.9% interest for the second quarter.
For the six months ended Buryatzoloto Mines New Britannia Mine
June 30, 2003
2003 2002 2003 2002
Gold Production (oz, 100%) 73,529 76,036 40,398 57,847
High River Share (oz) 39,779 31,559 20,199 28,923
Total Cash Cost (US $/oz) 182 172 301 196
Tonnes Milled 242,305 232,121 336,044 378,452
Head Grade (Au g/t) 10.01 10.81 3.95 5.06
Recovery (%) 93.8 93.8 94.7 93.9
Realized Gold Price (US $/oz) 347 302 338 308
Buryatzoloto Operating Results
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 2003, Buryatzoloto produced 73,529
ounces of gold (100%) at a total cash cost of US $182 per ounce
and remains on plan to achieve its full year programme objective
to exceed 150,000 ounces. The increased total cash cost reflects
the impact of the transition to shaft mining using cut and fill
at the Zun-Holba operation combined with a strengthening rouble.
Buryatzoloto is essentially unhedged and realized an average
price of US $347 per ounce for gold sales during the period.
New Britannia Operating Results
At the Company's 50%-owned New Britannia Mine, located in Snow
Lake, Manitoba, gold production for the six month period was
40,398 ounces (100%) at a total cash cost of US $301 per ounce.
Lower than planned mill throughput and lower realized head grades
resulted in a 14% shortfall from planned production which,
combined with the stronger Canadian dollar, resulted in a higher
than budgeted total cash cost. As previously reported, production
at New Britannia is being negatively impacted by a thinning and
flattening of the orebody in the current area of mining
contributing to fewer tonnes and a diluted grade. The full year
plan has been revised to 85,000 ounces from 92,000 ounces. New
Britannia realized an average price of US $338 per ounce for gold
sales during the period.
The Company increased its equity interest in Buryatzoloto to
greater than 50%, effective April 1, 2002, and initiated
consolidation of Buryatzoloto's operating performance at that
time. Prior to that date, the Company accounted for its 26.5%
interest in Buryatzoloto as an investment using the equity
(Thousands of $ Cdn except per Three Months Six Months
share amounts and # of shares) Ending Ending
June 30, June 30, June 30, June 30,
2003 2002 2003 2002
Revenue 24,816 25,096 50,007 33,264
Net Income (Loss) (822) 2,037 (64) 1,400
Net Income (Loss)
per share (0.01) 0.03 (0.00) 0.03
Cash Flow from
Operations(i) 4,973 5,312 9,979 6,710
Cash Flow per Share 0.05 0.07 0.10 0.12
Shares Outstanding 105,580,866 75,488,558 101,428,062 55,528,957
(i)Before change in non-cash working capital and convertible
For the quarter ended June 30, 2003, the Company incurred a
consolidated net loss of $822,000, or $0.01 per share, on gross
revenue of $24.8 million. This compares to consolidated net
income of $2.0 million, or $0.03 per share, on gross revenue of
$25.1 million for the same period in 2002. Cash flow from
operating activities, before changes in non-cash working capital
and convertible debentures, for the quarter decreased marginally
to $5.0 million from $5.3 million for 2002. Although New
Britannia encountered operating difficulties, the project
remained cash flow positive.
For the six month period ending June 30, 2003, High River had a
consolidated net loss of $64,000, or $0.00 per share, on gross
revenue of $50.0 million. This compares to consolidated net
income of $1.4 million for the same period in 2002. Cash flow
from operating activities for the period increased to $10.0
million, from $6.7 million for 2002.
High River's consolidated working capital position at June 30,
2003 was $38.1 million compared to $12.6 million as at December
31, 2002. The consolidated cash position at June 30, 2003 was
$32.6 million, of which High River Canada's portion was $30.3
High River's consolidated financial statements are available on
SEDAR and on the Company's website at: www.hrg.ca
Berezitovoye Gold Project
During the quarter, High River and Buryatzoloto initiated a
feasibility study on Berezitovoye, located in the Amur Region of
southern Siberia, Russia. The study is using a combination of
International and Russian engineering expertise to meet
international standards as well as Russian regulatory and
permitting requirements. Roscoe Postle Associates Inc., of
Toronto, is currently finalizing a block model estimate of the
gold resources, according to Canadian Institute of Mining,
Metallurgy and Petroleum (CIM) Standards on Mineral Resources and
Reserves, which will form the basis for the feasibility study.
Data from the 25 hole core drilling programme, conducted earlier
in the year, together with the extensive Russian database have
been used to calculate the block model resource estimate.
In addition to the feasibility study, an exploration drilling
programme has recently been initiated to test a number of targets
having geochemical and geophysical anomaly characteristics
similar to the main deposit.
Taparko Gold Project
High River and AXMIN Inc. (AXMIN) have initiated a feasibility
study for a mining operation combining High River's 80%-owned
Taparko gold project in Burkina Faso, West Africa, with AXMIN's
nearby Bouroum property. In May, High River engaged the services
of Mr. Daniel Vanin as Project Manager for the combined
feasibility study. Mr. Vanin is a highly regarded mining engineer
with extensive experience in mine operations, mine development,
project evaluation and project management.
An extensive diamond drill programme, totalling approximately
14,500 metres, is currently underway to provide additional
information for reserve calculations and pit design as well as
data for metallurgical and geotechnical purposes. Strathcona
Mineral Services Limited of Toronto has on-going involvement in
the study to ensure the feasibility report will meet all
technical and future financing requirements. The feasibility
study is scheduled for completion by the end of October.
New Britannia Exploration Project
High River, as exploration operator of the Joint Venture with
Kinross Gold Corporation, is continuing an aggressive exploration
programme in the Snow Lake region to define drilling targets in
an area considered to be within trucking distance of the New
Britannia mill and mine infrastructure.
Preferred Status Exploration Companies
High River conducts its own exploration in areas immediately
accessible to its existing mining operations. However, to gain
exposure to exploration in operating regions or countries of
future interest, High River has developed preferred status
relationships with two well managed and gold focussed exploration
Intrepid Minerals Corporation(TSXV:IAU), in which the Company has
a 14.4% equity interest, has aggressive exploration programmes
underway in Argentina and El Salvador. Intrepid recently
fast-tracked their high grade, open-pit, gold-silver Casposo
project in Argentina and plans to complete a scoping study in the
first quarter of 2004. Intrepid recently completed a $2.6 million
Jilbey Gold Exploration Ltd.(TSXV:JLB), in which the Company
holds a 9.9% equity interest, has reported significant gold
assays from trenching, reconnaissance prospecting and geochemical
surveys on its two permits adjacent to the Company's Taparko
property in Burkina Faso. Jilbey has identified a number of
quality targets and plans a drilling programme for the fourth
quarter of 2003. Because these targets are within trucking
distance of the proposed Taparko mill, a successful drill
programme would have positive implications for the Taparko
project. High River has a back-in right whereby the Company can
acquire a 50% interest in these properties and be the operator
during the development and production stage.
FORWARD LOOKING STATEMENTS
This quarterly report contains forward-looking statements based
on current expectations. These forward-looking statements entail
various risks and uncertainties that could cause actual results
to differ materially from those reflected. Risk and uncertainties
about the Company's business are more fully discussed in the
Management Discussion and Analysis published in the Company's
Annual Report and Annual Information Form.
FOR FURTHER INFORMATION PLEASE CONTACT:
High River Gold Mines Ltd.
President and CEO
High River Gold Mines Ltd.