NEWS RELEASE TRANSMITTED BY CCNMatthews
FOR: HIGH RIVER GOLD MINES LTD.
TSX SYMBOL: HRG
AUGUST 24, 2004 - 16:10 ET
High River Gold Increases Equity Interest in
TORONTO, ONTARIO--(CCNMatthews - Aug. 24, 2004) - (TSX:HRG) -
High River Gold Mines Ltd. ("High River") today announced it has
reached agreement with the European Bank for Reconstruction and
Development ("EBRD") to acquire the EBRD's equity interest in the
Russian company, OJSC Buryatzoloto, in exchange for shares in
High River to be issued from treasury. The EBRD holds 800,000
common shares of Buryatzoloto and preferred shares convertible
into an additional 200,000 shares. High River will issue
11,760,000 common shares to the EBRD in exchange for their 1.0
million Buryatzoloto shares.
At the annual meeting held on June 15, 2004, High River's
shareholders authorized management to enter into private
transactions to acquire additional Buryatzoloto shares on the
basis of 11.76 common shares of High River for each Buryatzoloto
share, subject to regulatory approval and compliance with
securities laws, to a maximum issue of 30 million High River
shares. If the Company were to enter into agreements for the
maximum, High River's equity interest in Buryatzoloto would
increase to approximately 84% on a fully diluted basis. Following
closing of the transaction with the EBRD, High River's interest
will be approximately 63.1% on a fully diluted basis
(representing 66.8% of the issued shares).
The exchange ratio was determined based on a net asset valuation
approach and has been agreed to by the Boards of both companies.
The commonality of many of the assets simplified the process. The
current corporate structure between Buryatzoloto and High River
is felt to be an inhibitor to the realization of full value for
the shareholders of both companies. It has been suggested that a
pooling of assets, to the largest extent possible, under the High
River entity, would be the most effective way of unlocking this
additional shareholder value.
The share purchase exchange agreement is subject to satisfaction
of all conditions to closing including receipt of all regulatory
approvals in Russia and Canada.
At the June meeting, shareholders also elected Mark Rachovides to
High River's Board of Directors. Mr. Rachovides is a Principal
Banker in the Natural Resources Team at the EBRD. He is currently
working on a variety of oil and gas and mining projects in the
Former Soviet Union and Eastern Europe. He has written a number
of articles and conference presentations on Russian gold mining
for the London Bullion Market Association, the World Gold
Council, the Prospectors and Developers Association of Canada,
the Russia-Canada mining group and other bodies. Mr. Rachovides
has nineteen years experience in commercial banking, including
eight years with the EBRD. Mr. Rachovides has a masters degree
from Oxford University and is an Associate of the Chartered
Institute of Bankers.
FOR FURTHER INFORMATION PLEASE CONTACT:
High River Gold Mines Ltd.
President and CEO
High River Gold Mines Ltd.
(416) 360-0010 (FAX)