High River Gold Mines Ltd.
TSX : HRG

High River Gold Mines Ltd.
Jilbey Gold Exploration Ltd.
TSX VENTURE : JLB

Jilbey Gold Exploration Ltd.

June 20, 2005 09:24 ET

High River Gold to Merge with Jilbey Gold

TORONTO, ONTARIO--(CCNMatthews - June 20, 2005) - High River Gold Mines Ltd. ("High River") (TSX:HRG) and Jilbey Gold Exploration Ltd. ("Jilbey") (TSX VENTURE:JLB) announced that they have entered into an agreement to merge whereby High River will acquire all of the outstanding common shares of Jilbey not already owned by High River on the basis of 0.75 High River shares for every 1 share of Jilbey.

Based on the closing price of High River and Jilbey shares on June 15, 2005 of $1.36 and $0.73, respectively, the exchange ratio places a value on each Jilbey share of $1.02, representing just under a 40% premium over the closing common share price of Jilbey shares, and exceeding a 62% premium over the 20-day average closing common share price. Prior to the agreement, High River held 29% of the common shares of Jilbey.

The Board of Directors of each company has unanimously approved the proposed merger. Jilbey has established a special committee of its Board and will be obtaining an independent valuation and fairness opinion for submission to shareholders in connection with a meeting of Jilbey shareholders to be held to approve the transaction. The meeting is expected to take place in August with a closing shortly thereafter.

The merger is subject to, among other things, due diligence, definitive documentation, and approval by Jilbey shareholders and regulatory authorities.

The consolidation of Jilbey's Burkina Faso assets with those of High River establishes High River as the pre-eminent exploration and mine development company in Burkina Faso, providing shareholders and investors with an attractive investment vehicle with exposure to near-production assets in West Africa - one of the fastest growing gold producing regions of the world.

David Mosher, President and Chief Executive Officer of High River said, "The past strategic alliance between High River and Jilbey has been very successful in establishing a large prospective land position in Burkina Faso, with Jilbey identifying potentially significant new gold zone extensions at Bissa Hill. Both companies believe that a consolidation of their respective interests at this stage will allow for optimization of technical programmes in Burkina Faso, add critical mass and lead to more aggressive development initiatives and added value for shareholders."

Greg Isenor, President and Chief Executive Officer of Jilbey said, "We have been extremely successful in our exploration programmes in Burkina Faso and our merger with High River will strengthen the ability to finance, further explore and potentially develop Jilbey's gold assets. This merger is the logical next step for us and will provide all Jilbey shareholders with an opportunity to be part of a much larger company with gold production and a varied portfolio of exciting projects."

Prior to completion of the transaction, High River has agreed to fund approved continuing exploration programmes on Jilbey's properties.

Jilbey is a leading exploration company in West Africa, having assembled a land package exceeding 5,300 square kilometres in highly prospective greenstone belts in Burkina Faso. The main focus of Jilbey's exploration activities to date has been on extending the Bissa Hill deposit. Jilbey reported in October 2004 a mineral resource of approximately 150,000 ounces grading 3.3 g/t over a strike length of 900 metres within a 35 kilometre-long gold bearing structure. Recent additional drilling along a 5.5 kilometre section of the structure has intersected encouraging drilling results indicating the potential to significantly add to this resource.

High River has been established in Burkina Faso since 1994 with an excellent portfolio of exploration properties covering in excess of 2,300 square kilometres, including the Taparko-Bouroum gold project and the recently announced Labola high-grade gold discovery. High River is currently constructing the Taparko-Bouroum gold mine, which is scheduled to commence production in early 2006 at an initial annual production rate of 100,000 ounces and ramping up to over 140,000 ounces in the third year of operation.

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 High River's and Jilbey's business are more fully discussed in their Management's Discussion and Analysis published in their Annual Report and in their Annual Information Form.

The TSX and TSXV have neither approved nor disapproved the form or content of this release.

Contact Information

  • High River Gold Mines Ltd.
    Don Whalen
    Executive Chairman
    (416) 947-1440
    (416) 360-0010 (FAX)
    or
    High River Gold Mines Ltd.
    Laurie Gaborit
    VP Investor Relations
    (416) 947-1440
    (416) 360-0010 (FAX)
    info@hrg.ca
    www.hrg.ca
    or
    Jilbey Gold Exploration Ltd.
    Gregory P. Isenor
    President and CEO
    (902) 832-5555
    (902) 832-2223 (FAX)
    or
    Jilbey Gold Exploration Ltd.
    Daniel Whittaker
    VP and CFO
    (902) 832-5555
    (902) 832-2223 (FAX)
    info@jilbey.com
    www.jilbey.com