High River Gold Mines Ltd.
TSX : HRG

High River Gold Mines Ltd.

December 05, 2006 09:47 ET

High River Gold Finalizes Debt Financing for the Berezitovy Project

TORONTO, ONTARIO--(CCNMatthews - Dec. 5, 2006) - High River Gold Mines Ltd. ("High River" or "the Company") (TSX:HRG) is pleased to announce that it has obtained the final tranche of project debt financing (US $19 million) for development of the Berezitovy Mine from Moscow-based NOMOS Bank, and that drawdown has started. Total Berezitovy debt now consists of US $51 million of non-recourse project debt and a US $9 million working capital facility, as follows:

- The existing US $20 million 5 year project loan was increased to US $32 million.

- The existing US $12 million bridge loan was converted to a project loan and increased to US $19 million.

- The existing US $9 million working capital facility remains unchanged.

No further debt financing for the Berezitovy project is anticipated by the Company. All Berezitovy debt is free of any hedging requirements.

Terms of the two project loans, totaling US $51 million (non-recourse to High River), are as follows:



US $32 million Project Loan:
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Term - 5 years ending May 2011
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Amortization - 8 semi-annual payments starting October 31, 2007
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Interest rate - Pre-completion: 6 month LIBOR + 5.38%
- Post-completion: 6 month LIBOR + 3.94%
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Security - Pre-completion: pledge of 3,707,154 Buryatzoloto
shares held by High River
- Post-completion: pledge of 99% interest in the
Berezitovy Mine, and certain
project assets
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US $19 million Project Loan:
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Term - 5 years ending September 2011
---------------------------------------------------------------------------
Amortization - 8 semi-annual payments starting February 28, 2008
---------------------------------------------------------------------------
Interest rate - Pre-completion: 6 month LIBOR + 5.38%
- Post-completion: 6 month LIBOR + 3.94%
---------------------------------------------------------------------------
Security - Pre-completion: pledge of 2,235,470 Buryatzoloto
shares held by High River
- Post-completion: pledge of 99% interest in the
Berezitovy 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. 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