ZAO Severstal Resources

July 28, 2009 09:41 ET

Severstal Increases Cash Offer for High River Gold to $0.30 per Share, an Increase of 36% Over its Prior Offer of $0.22


MOSCOW, RUSSIA--(Marketwire - July 28, 2009) - Lybica Holding B.V. ("Lybica"), an affiliate of ZAO Severstal Resources ("Severstal"), the mining division of OAO Severstal, announced today that it intends to increase its offer (the "Increased Offer") for all of the issued and outstanding common shares (the "Common Shares") of High River Gold Mines Ltd. ("High River") (excluding the Common Shares currently controlled by Severstal). High River shareholders who accept the Increased Offer will now receive $0.30 per Common Share in cash, an increase of $0.08 or 36% per Common Share from the previous offer price of $0.22 per Common Share.

The Increased Offer represents a premium of 90% over the volume weighted average High River share price for the 60-trading day period preceding and including May 21, 2009, the last trading day prior to High River's announcement that it was in discussions with Severstal regarding a possible transaction. It also represents a 7% premium to the closing High River share price on July 27, 2009 and a 36% premium over the volume weighted average High River share price for the period since May 21, 2009.

The Board of High River (with Severstal nominees abstaining) unanimously recommends that High River shareholders accept the Increased Offer.

Severstal further confirms that the Increased Offer is full and final and that the Increased Offer will not be extended beyond the revised closing date of August 10, 2009.

Those High River shareholders who have tendered their Common Shares under the terms of the original offer will receive $0.30 per Common Share in cash and are not required to take any further steps to accept the Increased Offer.

A Notice of Variation and Extension, containing the amended terms of the Increased Offer, will be mailed to High River's shareholders on or about July 30, 2009. The Increased Offer expires at 11:59 p.m. (Toronto time) on August 10, 2009.

Alexei Kulichenko, Chief Financial Officer of ZAO Severstal Resources, commented upon the Increased Offer:

"Severstal wanted to put forward its best offer in full and final form and we are pleased to be able to offer this substantially revised price which is unanimously recommended by the Board of Directors of High River. We confirm that whatever the level of acceptances, provided that all other conditions of the offer are satisfied, we intend to take up all Common Shares tendered."

Morgan Stanley & Company Limited and Torys LLP are acting as the financial and legal advisors to Severstal on this transaction. In addition, any questions or requests for assistance or further information on how to tender common shares to the Offer, may be directed to and copies of the above referenced documents may be obtained by contacting the information agent at 1-866-581-1490 or by email at

About High River

High River is a gold company with interests in producing mines and advanced exploration projects in Burkina Faso and Russia.

About Severstal Resources

ZAO Severstal Resources comprises OAO Severstal's assets relating to iron ore, coal and gold extraction. The division also includes coal refining facilities and other auxiliary businesses and is one of Russia's largest producers of pellets and coking coal.

Forward Looking Statements:

This communication may contain projections and other forward-looking statements regarding future events or the future financial performance of OAO Severstal. Forward looking statements are identified by terms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might," the negative of such terms, or other similar expressions. OAO Severstal wishes to caution you that these statements are only predictions and that actual events or results may differ materially. OAO Severstal does not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Factors that could cause the actual results to differ materially from those contained in projections or forward-looking statements of OAO Severstal may include, among others, general economic conditions in the markets in which OAO Severstal operates, the competitive environment in, and risks associated with operating in, such markets, market change in the steel and mining industries, as well as many other risks affecting OAO Severstal and its operations.

Contact Information

  • Kingsdale Shareholder Services Inc.
    1-866-581-1490 (Toll Free)
    Outside North America, Banks and Brokers Call Collect:
    (416) 867-2272
    (416) 867-2271 (FAX)
    1-866-545-5580 (Fax - Toll Free)
    Severstal Resources
    Sergey Loktionov
    Press Secretary
    +7 495 9810910 ext. 6648
    Morgan Stanley
    Peter Bacchus
    Managing Director
    +44 (0) 20 7425 4669
    Morgan Stanley
    Vladimir Samarin
    Vice President
    +44 (0) 20 7425 4361
    Canadian and international mass media contacts:
    Fleishman-Hillard Canada Inc.
    David Kaiser
    Senior Vice President
    (416) 645-3682