High River Gold Mines Ltd.
TSX : HRG

High River Gold Mines Ltd.

January 04, 2007 15:50 ET

High River Gold Completes Transfer of its 50% Interest in Non-Operating New Britannia Mine

TORONTO, ONTARIO--(CCNMatthews - Jan. 4, 2007) - High River Gold Mines Ltd. (TSX:HRG) ("High River" or "the Company") is pleased to announce that the transfer (previously announced on October 10, 2006) of its 50% joint venture interest in the New Britannia Mine ("NBM"), located in Snow Lake, Manitoba, to Pegasus Mines Ltd. ("Pegasus") has been completed.

As consideration for the transfer, High River's non-recourse project debt associated with its interest in NBM has been cancelled, and all liabilities and obligations have been assumed by Pegasus. The cancellation of the non-recourse project debt was reflected in High River's third quarter 2006 financial statements as a non-cash gain of $32.9 million.

Going forward, High River will no longer reduce net income each quarter by non-cash interest expense related to the cancelled non-recourse project debt. For the third quarter 2006, this amount was $544,000.

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 could lead to a future re-opening of the mine.

About High River

High River is currently constructing two open-pit gold mines; the Taparko-Bouroum Project in Burkina Faso, due to commence production in May; and the Berezitovy Project in Russia, scheduled to start production this summer. 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 the summer, establishing the Company as a mid-tier gold producer. In addition, the Company has two advanced exploration projects, the Bissa Gold Project in Burkina Faso and the world-class Prognoz Silver Project in Russia. These projects are expected to significantly add to the Company's production profile in the future.

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.

Contact Information

  • High River Gold Mines Ltd.
    Dan Hrushewsky
    Vice President Investor Relations
    (416) 947-1440
    (416) 360-0010 (FAX)
    Email: info@hrg.ca
    Website: www.hrg.ca