High River Gold Mines Ltd.
TSX : HRG

High River Gold Mines Ltd.

August 23, 2007 08:34 ET

High River Gold Updates Status of Prognoz Silver Project

TORONTO, ONTARIO--(Marketwire - Aug. 23, 2007) - High River Gold Mines Ltd. ("High River" or "the Company")(TSX:HRG) is pleased to provide an up-date on the significant ongoing exploration activity at the world-class Prognoz Silver Project ("Prognoz"), one of the largest and highest grade undeveloped silver projects in the world. The geological and engineering consulting firm MICON International Ltd. ("MICON") are currently working on a report that will convert the historical Russian classified reserves and resources (see section titled "Background" below) to a Canadian NI 43-101 compliant resource estimate.

Since early in 2007, in excess of 100 exploration staff and 4 diamond drills have been working on the property under the operatorship of High River's 85%-owned Russian subsidiary, OJSC Buryatzoloto ("Buryatzoloto"), which holds a 50% interest in Prognoz. To the end of July, approximately US $11 million has been spent on core drilling, trenching, extraction of a 17-tonne bulk sample, and construction of an access road to the property. This follows the successful completion of a US $6 million drilling programme in 2006.

Fill-in Drilling for NI 43-101 Resource Estimate

- Fill-in drilling began in May 2006, shortly after the acquisition of Prognoz, and has been continuing virtually unabated since that time. During 2006, a total of 85 core holes were drilled. In 2007 to the end of June, an additional 177 core holes were completed. Currently 4 drill rigs are operational on the property, with a fifth soon to be added. Results of the drilling show continuous mineralization and economic grade-thicknesses. The average grade-thickness of all core hole assays received to-date is 92% of the comparable historical value, showing excellent correlation to historical results.

- MICON visited the property in June 2007, and will be calculating a Canadian National Instrument 43-101 compliant interim resource estimate for the property during the third quarter of 2007.

Other Activity

- Two bulk samples, totalling 17 tonnes, have been shipped to laboratories for metallurgical testing.

- Construction of an access road to the property.

- Buryatzoloto has negotiated a contract with the IRGIREDMET laboratory in Irkutsk to alleviate the significant backlog of assay results from Prognoz. This well-equipped and highly regarded assay and metallurgical laboratory will process 5,000 samples per month for the 4 month period beginning August 1, 2007.

Background

During 2006, Buryatzoloto acquired a 50% interest in and operatorship of the Prognoz Silver Project, situated in the Republic of Sakha (Yakutia) of the Russian Federation. This 56 square kilometre property hosts over 30 epithermal veins which are up to 2 to 4 metres wide, several kilometres long, and several hundred metres deep. Based on extensive past work, consisting of 89 diamond drill holes (17,805 metres)and 317 trenches (17,756 metres), the Prognoz Silver Project has a historical resource estimate using the Russian Classification System (non Canadian National Instrument NI 43-101 compliant) as follows:



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Tonnes (t) Grade (g/t) Contained Silver (oz)
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Historical C2 Reserves 4,989,000 875.5 141,000,000
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Historical P1 Resource 2,346,399 708.3 53,000,000
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The above estimates have been calculated for only 2 of the more than 30 veins on the Prognoz property.

These estimates have been calculated according to standard Russian industry practice and do not conform to the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) standards and definitions for resource estimates, as set out in Canadian National Instrument 43-101 (NI 43-101). These estimates should not be relied upon until fully confirmed by a NI 43-101 compliant independently estimated resource calculation.

Summary/Interpretation of Drill Assay Results

Drilling Activity during 2007

Drilling during 2007 began on January 1 and currently 4 diamond drill rigs are operating with a fifth on-site which will be operational shortly. During 2007 to the end of June, a total of 177 holes (21,539 metres) have been drilled on the Prognoz Silver Project. Of these, 99 were fill-in holes with the rest being step-out and reconnaissance holes. Approximately one half of the fill-in holes were drilled on the Glavnoye Vein which accounts for 85% of the current Russian classified resources shown in the table above. Remaining fill-in holes were drilled on the Boloto Vein and other veins on the property. Step-out holes were drilled to test extensions of known veins. Most tested potential extensions to the west of the Glavnoye and Boloto veins. Reconnaissance drilling tested previously mapped but undrilled veins on the property such as the Verkhnyaya, Dalnaya, and Neizvestnaya Veins as well as others.

The project is on track to complete 40,500 metres of drilling during 2007, as budgeted (see press release dated February 26, 2007). Activity going forward will focus on fill-in drilling on the main C2 blocks of the Glavnoye vein.

Assay Results Received to-date in 2007

A significant back-log of unassayed samples has developed due to the shortage of available laboratory capacity in Russia. To the end of June 2007, fire assay results have been received for only an additional 11 diamond drill holes. Ten of these holes were fill-in holes drilled within the main 4-C2 and 6-C2 blocks of the Glavnoye vein. One twinned hole was drilled within the 18-C2 block east along strike. To view a longitudinal section showing the location of drill hole intersections, please follow this link (longitudinal section: http://www.ccnmatthews.com/docs/long%20section%20final.pdf)

Results confirm Historical Drill Hole Data

These results generally show vertical and horizontal continuity within the Glavnoye Vein over the strike length tested, as well as economic grades and widths.

For the 64 drill hole results received to date, based on a cut-off grade of 150 grams/tonne, the average grade-thickness was 2,121 grams per tonne-metres (973.4 grams/tonne x 2.18 metres), in line with the historical grade-thickness average of 2,313 grams per tonne-metres (967.5 grams/tonne x 2.39 metres).

Results from the twinned hole largely confirmed the results of the original hole, with the grade-thickness of the twinned hole coming in at 82% of the value of the original hole.

National Instrument 43-101 Resource Estimate

High River has engaged MICON, an international mineral industry consulting firm, to calculate a Canadian National Instrument 43-101 compliant resource estimate for the Prognoz Silver Project. In June 2007, MICON, accompanied by High River and Buryatzoloto senior technical staff, visited the Prognoz Silver Project to independently evaluate core drilling, sample preparation and analysis procedures. An interim NI 43-101 compliant resource estimate, on part of the existing Russian classified resources, is expected during the third quarter of 2007.



Glavnoye Vein Fill-in Drilling Fire Assay Results

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Hole Core True
No. Sampling Interval Length Width Silver Grade Azimuth Dip
(m) (m) (m) (g/t) (degrees) (degrees)
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From To
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251 123.8 130.3 6.5 4.00 775.5 N15 -55.5
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243 60.0 60.7 0.7 0.34 314.0 N13 -76
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244 6.8 7.6 0.8 0.52 938.0 N38 -60.5
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28.6 31.1 2.5 1.62 797.3
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71.9 72.9 1.0 0.64 215.0
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122.9 126.2 3.3 2.11 221.0
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248 118.7 127.1 8.4 5.10 375.3 N12 -64.5
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136.9 137.2 0.3 0.19 204.0
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146.2 147.7 1.5 0.94 178.0
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249 175.6 177.5 1.9 1.34 406.7 N12 -56
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245 19.2 19.8 0.6 0.51 978.3 N12 -46.5
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246 84.6 86.8 2.2 1.2 6758.9 N10 -73
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247 127.1 135.0 7.9 4.69 1565.4 N10 -70
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250 0 less than 10 N14 -65.5
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242 0 less than 10
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Glavnoye Vein Twinned Hole # 37 bis Fire Assay Results (compared to
original hole # 37)

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Hole No. Sampling Interval Core Width True Width Silver grade
(m) (m) (m) (g/t)
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From To
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37 bis 65.4 71.4 6.0 2.81 637.5
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75.9 76.3 0.4 0.19 963.0
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37 61.5 63.9 2.4 1.9 1149.3
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Twinned hole 37 bis was drilled at an azimuth of N202 degrees, and a dip of minus 67.5 degrees. The historicial hole 37 was drilled at an azimuth of N196 degrees and a dip of minus 68.5 degrees. The distance between the ore body intersections of the two holes is 3.4 metres.

Other Updates

Bulk Sampling

Four declines, each averaging 46 metres in length and totalling 184 metres, were driven earlier this year to extract bulk samples for metallurgical testing. Seventeen tonnes of sample material, estimated to average 715 g/t silver, 2.6% lead, and 0.6% zinc, were collected and divided into 2 samples. One 5-tonne sample was sent to the IRGIREDMET laboratory in Irkutsk, and a 12-tonne sample was sent to the Scientific Research Institute of Base Metal Metallurgy in Ust-Kamenogorsk in Kazakhstan. The metallurgical testing will determine preliminary flow sheet parameters and silver and base metal content.

Construction of Access Road

A 300 kilometre winter road, leading from an existing regional road system to the project site, is currently being constructed. The road will facilitate lower cost and reliable transportation of supplies and machinery into the project site over the winter months.

Project Exploration in Pictures

To view photographs showing the latest exploration activity at Prognoz, please follow this link: http://www.ccnmatthews.com/docs/Prognoz.pdf.

Quality Assurance and Quality Control

The NQ drill core is logged, photographed, and then halved using a diamond saw. Half is stored as a duplicate in a secure facility on site. The other half is crushed to 2 mm, pulverized in a ring mill to 0.3 -0.4 mm, and then divided into two equal portions each weighing approximately 1 kilogram. One of these pulverized samples is stored on site in a secure facility, while the other is pulverized a second time to minus 0.074 mm, then split into two samples: one for fire assaying (weighing 950 grams) and another for spectral analysis (weighing 50 grams), and transported to an independent laboratory, the IRGIREDMET Institute in Irkutsk. Out of the 950 gram fire assay sample, two samples, each weighing 50 grams, are split out, fire assayed, and the silver grade is calculated as an arithmetic mean of the two values. In the case of a significant discrepancy between the two values, an additional two 50 gram samples are split out, assayed, and the arithmetic mean of the four values is recorded as the value for that sample. On average, one out of every 20 samples is a blank. Five percent of the total number of samples is sent for check assaying to the IRGIREDMET Institute in Irkutsk.

Qualified Persons

The Prognoz exploration programme is managed and directed by Mr. Munko Dampilov, Deputy General Director and Chief Geologist of Buryatzoloto, and Ms. Lyubov Kuprianova, Chief Geologist of Buryatzoloto Exploration Expedition, and Ms. Anna Zelenskaya, Project Chief Geologist, who are supervising the exploration programme, including the verification of sampling, analytical and test data underlying the information given in this press release. The designated qualified persons for the Prognoz Silver Project are Mr. Driffield Cameron, P.Geo., Vice President, Exploration of High River and Mr. William Lewis, P. Geo., Senior Geologist with Micon International Ltd.

About High River

High River has brought two new open-pit gold mines into production this year, the Taparko-Bouroum Gold Mine in Burkina Faso (July) and the Berezitovy Gold Mine in Russia (August). Annual gold production from Taparko-Bouroum is planned at 100,000 ounces for the first 12 months increasing to over 140,000 ounces in the third year of operation, and annual production from Berezitovy is expected to exceed 100,000 ounces. Combined with gold production from High River's 85%-owned Russian subsidiary, OJSC Buryatzoloto, High River's attributable unhedged gold production is expected to be approximately 175,000 ounces in 2007, and to exceed 300,000 ounces in 2008. 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