High River Gold Mines Ltd.
TSX : HRG

High River Gold Mines Ltd.

July 14, 2008 09:44 ET

High River Gold Releases Q2/2008 Production Results

TORONTO, ONTARIO--(Marketwire - July 14, 2008) - High River Gold Mines Ltd. ("High River" or "the Company") (TSX:HRG) is pleased to provide second quarter production results for its four operating gold mines.

Gold production for the second quarter totaled 58,240 ounces (107,681 ounces year to date). Production from Irokinda and Zun-Holba exceeded planned levels. Berezitovy approached commercial production in the latter part of the quarter with June showing an average plant capacity utilization rate of 63%, with July results continuing to improve. Taparko-Bouroum experienced mill drive-shaft vibration problems resulting in significant downtime during the quarter. Vibration and mill mechanical specialists are currently on-site and these problems are expected to be resolved this week.



High River Gold Q2/2008 Gold Production (ozs)

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100% Attributable
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Q2/2008 YTD Q2/2008 YTD
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Irokinda & Zun-Holba 36,811 70,805 31,289 60,184
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Taparko-Bouroum 10,330 22,967 9,297 20,670
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Berezitovy 11,099 13,909 10,988 13,770
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Total 58,240 107,681 51,574 94,624
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Irokinda and Zun-Holba Gold Mines: Q2/2008 production exceeds plan

Gold production at the two underground mines operated by the Company's 85%-owned Russian subsidiary, OJSC Buryatzoloto, exceeded plan on both a quarterly and year-to-date basis. Plant capacity utilization exceeded 95% during the second quarter and year-to-date.



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April May June Q2/2008 YTD
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Ore processed (tonnes) 44,030 45,431 49,828 139,289 268,080
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Mill Head Grade (g/t) 8.50 8.61 8.49 8.52 8.57
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Recovery (%) 94.06 94.32 94.15 94.18 94.11
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Gold Production (ozs)(1) 11,705 11,971 13,135 36,811 70,805
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(1) Includes gold from placer operations, tailing recovery and other
sources and therefore does not equal tonnes milled times grade times
recovery.


Taparko-Bouroum Gold Mine: Mechanical problems approaching resolution

Lingering mill drive-train vibration issues resulted in several mill shutdowns during the second quarter of 2008. Although mill throughput was low, grades and recoveries were near planned levels.



Taparko-Bouroum Production Update for Q2/2008

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April May June Q2/2008 YTD
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Ore processed (tonnes) 64,367 42,295 18,983 125,645 257,547
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Plant capacity utilization (%) 84 52 25 54 53
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Mill Head Grade (g/t) 3.38 1.50 4.19 2.86 3.03
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Recovery (%) 88.9 91.0 88.3 89.5 91.4
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Gold Production (ozs) 6,217 1,856 2,257 10,330 22,967
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Specialized mill consultants ("Industries Blais") based in Quebec, Canada, conducted a detailed analysis of the mill and re-installed all major drive-train components to correct for misalignment in the ball mill and drive-shaft. Despite this careful corrective work, vibration and noise continued. Subsequently, a vibrations consultant ("Natek Inc."), based in Quebec, Canada, identified the source of the problem as a defective drive-shaft coupling. A replacement coupling from inventory is currently being prepared for installation this week. Executive Vice-President and COO Mike Kelly remarked: "The challenges remaining at Taparko-Bouroum consist of mechanical problems that are being resolved. Two of the most important characteristics of any mine are ore grade and recovery. Both of these parameters are being achieved at the Taparko-Bouroum Gold Mine." A two month stockpile of higher grade ore (3+ g/t) is available to supply the process plant upon start-up. During the repair period, mining activity has continued unabated in the 3/5 and GT pits. The focus has been on waste stripping resulting in a substantial increase of developed ore available for immediate production blasting.

Berezitovy Gold Mine: Approaching Commercial Production

Although High River has not yet declared commercial production at Berezitovy, mill throughput has now exceeded the commercial production hurdle on an average basis, as evidenced by the 63% plant capacity utilization rate in June. Commercial production is defined as 30 consecutive days of production at 60% or more of design capacity. Grades and recoveries have consistently been near planned levels.



Berezitovy Production Update for Q2/2008

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April May June Q2/2008 YTD
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Ore processed (tonnes) 47,900 41,682 77,175 166,757 213,758
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Plant capacity utilization (%) 39 33 63 44 29
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Mill Head Grade (g/t) 2.64 2.56 2.09 2.37 2.30
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Recovery (%) 89.6 87.4 86.5 87.3 88.0
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Gold Production (ozs) 3,616 2,998 4,485 11,099 13,909
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Two operational issues during the quarter resulted in unexpected mill down-time: tailings filter plant performance, and minor damage to the ball mill bearings.

The previously announced problem with the tailings filter plant (see press release dated May 6, 2008) was resolved half-way through the quarter with the installation of improved filter cloth and the construction of a temporary wet tailings storage area. A permanent solution will involve the installation of an additional high capacity thickener ahead of the tailings filter plant to increase the % solids of the tailings slurry from the current 45-50% level to 55-60%, thereby enhancing efficiency of the tailings filter plant.

Damage to the ball mill bearings was caused by an overloading of the ball mill due to operator error. A mid-quarter mill shutdown occurred while the minor damage to the bearings was corrected by on-site re-machining of the bearings, and the mill was re-started. The mill is expected to operate at the current 3,400-3,900 tonnes per day throughput rate, which equates to approximately 80-90% of design capacity, until such time as replacement bearings are installed (mid August 2008).

Executive Vice-President and COO Mike Kelly stated: "We have achieved substantial progress at Berezitovy and are starting to see consistency in plant throughput rates. We expect to declare commercial production soon."

About High River

High River is an unhedged gold company with producing mines, mines under development, and advanced exploration projects in Burkina Faso and Russia. High River is bringing two new open-pit gold mines into production. The Taparko-Bouroum Gold Mine in Burkina Faso achieved commercial production in October 2007, and the Berezitovy Gold Mine in Russia is expected to achieve commercial production shortly. At full production, annual gold production is planned at 100,000 ounces at Taparko-Bouroum and is expected to exceed 100,000 ounces at Berezitovy. Combined with gold production from two underground mines in Russia, Zun-Holba and Irokinda, High River's attributable unhedged annual gold production is expected to exceed 300,000 ounces. In addition, the Company has three advanced exploration projects, the Bissa Gold Project in Burkina Faso, the world-class Prognoz Silver Project and the Chaya Nickel Project in Russia. These projects are expected to significantly add to the Company's shareholder value 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