TORONTO, ONTARIO--(CCNMatthews - Nov. 27, 2006) - High River Gold Mines Ltd. ("High River" or the "Company")(TSX:HRG) is pleased to announce that it was successful in acquiring the Sergachinsky property package ("Sergachinsky"), including the exploration and mining license, through a Russian government auction held on Friday November 17, 2006.|
Sergachinsky is comprised of 6 non-contiguous properties totaling 162.7 square kilometres. The properties are located south and west of High River's Berezitovy mine, which is currently under construction, with one of the properties lying contiguous to the Berezitovy mine property. For a map showing property locations and geology, please follow this link: http://www.ccnmatthews.com/docs/gengeomap.pdf. Numerous gold showings, and geology similar to that of the Berezitovy orebody, have lead the Company's exploration geologists to believe that this adjacent property may host a gold deposit analogous to Berezitovy. The economics of developing a gold deposit on this property will be greatly enhanced by its proximity to the existing infrastructure at the Berezitovy mine, including the mill, mining camp, the power line, etc. The other 5 properties are highly prospective as well, displaying favourable geology and numerous gold occurrences.
SUMMARY OF LICENSE TERMS
- 3,330,000 roubles (approximately US $125,000)
- First calendar year: 90 roubles/km2
(approximately US $550 in total).
- Subsequent calendar years: 208 roubles/km2
(approximately US $1,267 in total), rising to
18,000 roubles/km2 (approximately US
$110,000) in the 6th year of exploration.
Minimum work requirements:
- Drilling of at least 1,000 metres in each of
years 1 through 4.
- Completion of a geological report containing
Russian classified reserves (C2) and resources
(P1) calculations by the end of year 4.
Right to Build a Mine:
- High River has the right to build a mine no
later than November 2014, after meeting
additional work requirements including reserve
calculations, and approval of mine design.
The Sergachinsky gold field is located near the southern margin of the Selengino-Stanovy fold system which is transected by northeasterly trending faults which are considered important structures in the localization of the gold mineralization. The property is underlain by rocks of Precambrian, Permian, and Mesozoic ages, with gold mineralization associated with Jurassic volcanic and plutonic rocks and Cretaceous dykes. Gold occurrences and targets include the analogue of the Berezitovy gold-polymetallic deposit, and other hydrothermally altered auriferous zones and quartz and quartz-sulphide veining.
Most of Sergachinsky was covered by regional scale (1:25,000 to 1:10,000) prospecting and mapping, which identified numerous gold occurrences. The property has been subject to small scale mining since the late 1800's, including an underground mine as well as placer operations which produced approximately 250,000 ounces of gold.
A preliminary initial work programme has been budgeted at almost US $2 million and will be carried out over a 4 year period. Planned work will include prospecting on a 1:10,000 scale, trenching with channel sampling (90,000 cubic metres), and diamond drilling (3,500 metres).
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.
FORWARD LOOKING STATEMENTS
This press release 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's Discussion and Analysis published in the Company's Annual Report and in the Annual Information Form.
FOR FURTHER INFORMATION PLEASE CONTACT:
High River Gold Mines Ltd.
(416) 360-0010 (FAX)