NEWS RELEASE TRANSMITTED BY CCNMatthews
FOR: HIGH RIVER GOLD MINES LTD.
TSX SYMBOL: HRG
MAY 10, 2004 - 16:20 ET
High River Gold and Kinross Gold to Suspend Development
at the New Britannia Mine
TORONTO, ONTARIO--(CCNMatthews - May 10, 2004) - (TSX:HRG) -
Today, High River Gold Mines Ltd. ("High River") and Kinross Gold
Corporation ("Kinross") announced they have reached agreement to
suspend development at the New Britannia Mine, located in Snow
Lake, Manitoba. High River and Kinross each own a 50% interest in
the mine with Kinross being the mine operator. The mine is
expected to go into reclamation and closure at the end of the
third quarter of 2004.
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
increased costs resulting from mining at deeper levels, a reduced
strike length of the ore zones and a flattening of the ore zones
adjacent to the McLeod Road Thrust Fault caused High River and
Kinross to re-evaluate the mine and its future operations.
Various options for the site were reviewed with the preferred
operating option being to stop underground development and mine
the developed ore over the next four months. As a result, the
companies have revised downward the expected 2004 production
levels to 33,000 ounces (100%) from the planned 68,000 ounces. It
is expected, however, that the mine will generate positive cash
flow until closure.
The New Britannia mine team has done an outstanding job of
operating the mine. Since commencing production in November 1995,
the mine has produced in excess of 785,000 ounces of gold,
approximately 100,000 ounces above original expectations. The New
Britannia Mine has achieved an outstanding record in mine safety
and for the year 2003 earned the prestigious John T. Ryan Safety
Award, given to Canada's safest underground mine. The team at New
Britannia has earned this award a total of five times (the Canada
Trophy twice and the Regional Trophy three times) over the course
of its eight years of eligibility. During this period, the New
Britannia Mine Rescue Team were Provincial Champions a total of
three times, including 2003, and received the Mine Rescue
Technician Award twice.
During fiscal 2003, High River incurred a non-operating loss of
Cdn $14.2 million resulting from the write-down of the Company's
share of the assets of New Britannia. In the future, High River
expects to recognize a non-operating gain equal to the full
amount (Cdn $30.3 million as at December 31, 2003) of the
non-recourse joint venture obligation carried on the Company's
balance sheet, once the disposition of its venture interest in
New Britannia is finalized.
The New Britannia gold deposit has had two periods of operation
from 1947-1957 and more recently from 1995-present. Over the
total life of the mine approximately 1.4 million ounces of gold
has been recovered.
The Snow Lake area remains an attractive area for gold
exploration and High River is continuing its discussions with
Kinross to consider new initiatives under which High River could
pursue an aggressive exploration program in the area.
High River and Kinross would like to thank the entire team at New
Britannia for their hard work and dedication over the years, and
for a job well done.
FOR FURTHER INFORMATION PLEASE CONTACT:
High River Gold Mines Ltd.
President and CEO
High River Gold Mines Ltd.
(416) 360-0010 (FAX)