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OCT 10, 2006 - 10:30 ET
High River Gold Transfers its 50% Interest in the Non-Operating New Britannia Mine
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TORONTO, ONTARIO--(CCNMatthews - Oct. 10, 2006) - High River Gold Mines Ltd. ("High River" or "the Company")(TSX:HRG) is pleased to announce that it has agreed to transfer its 50% joint venture interest in the New Britannia Mine ("NBM"), located in Snow Lake, Manitoba, to Pegasus Mines Ltd.
As consideration for the aforementioned transaction, High River's non-recourse project debt associated with its interest in NBM will be cancelled, and all liabilities and obligations will be assumed. This transaction will positively impact High River's financial statements as follows:
- High River will recognize a non-cash gain on disposal equal to the full amount of its obligation under the non-recourse project debt, currently estimated at approximately $33 million.
- Going forward, High River will no longer be reducing net income by non-cash interest expense related to its obligation under the non-recourse project debt. This amount is estimated to be approximately $550,000 for the third quarter 2006.
High River believes this transaction is in the best interest of the Town of Snow Lake and the Province of Manitoba as it provides for an aggressive exploration initiative that, with success, could lead to another re-opening of the mine.
About High River
High River is currently constructing two open-pit gold mines which are scheduled to commence production in the first half of 2007, the Taparko-Bouroum Project in Burkina Faso and the Berezitovy Project in Russia. Annual gold production from Taparko-Bouroum is planned at 100,000 ounces in year one increasing to over 140,000 ounces in the third year of operation, with annual production from Berezitovy averaging more than 100,000 ounces. Combined with gold production from High River's 85%-owned Russian subsidiary, OJSC Buryatzoloto, High River's attributable annualized gold production rate is expected to exceed 325,000 ounces by mid-2007, establishing the Company as a mid-tier gold producer.
FOR FURTHER INFORMATION PLEASE CONTACT:
High River Gold Mines Ltd.
Dan Hrushewsky
Vice President Investor Relations
(416) 947 1440
(416) 360 0010 (FAX)
Email: info@hrg.ca
Web site: www.hrg.ca
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