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TORONTO, ONTARIO--(Marketwire - March
30, 2009) - High River Gold Mines Ltd. ("High River" or the
"Company") would like to provide an update on its financial
status, recent discussions between Severstal Resources
("Severstal") and High River's Board of Directors regarding
additional financing and/or a possible takeover, and would like to
report a change to its Board of Directors.
Financial Status (Liquidity and Capital Resources)
As of March 1, 2009, total High River consolidated debt outstanding was
estimated at approximately US$ 137 million. This includes: (a) US$ 64
million under various loans between Nomos Bank and High River's Russian
subsidiaries, Buryatzoloto and Berezitovy; (b) US$ 29 million under a
loan agreement between Royal Gold Inc. and High River's subsidiary,
Somita SA; and (c) approximately US$ 27 million under loan agreements
between Standard Bank Plc and Somita SA and High River. The Company
continues to be in breach of certain financial covenants under the loan
agreements with Royal Gold, Inc. and Standard Bank Plc, who have not
taken any actions thus far but have reserved their rights to do so.
Total scheduled principal and interest debt repayments due in March
2009 amounted to approximately US$ 7 million, with an additional US$ 27
million due in the second quarter of 2009 and approximately US$ 22
million due in the second half of 2009. Additionally, as of March 1,
2009, the Company's consolidated accounts payable amount to US $23
million.
As of March 24, 2009, High River's head office cash position totaled
approximately US$ 3 million, and consolidated cash totalled
approximately US$ 23 million.
Recent
Discussions between Severstal and High River
The ability of the Company to continue as a going concern is dependent
on the results of ongoing discussions with the Company's lenders,
ongoing accommodations from the Company's trade creditors, the
establishment of steady production at the Taparko-Bouroum and
Berezitovy mines, and obtaining additional financing.
As described in its January 2, 2009 press release, High River has been
considering additional debt or equity financing arrangements to meet
its financial obligations. In this regard, Severstal and a Special
Committee comprised of independent directors of High River have
discussed, on an arm's length basis, the possibility of Severstal
acquiring the remaining outstanding common shares of High River and/or
providing debt or equity financing to High River. However, Severstal
and the Special Committee have been unable to agree on the terms of any
such transaction and, as a result, Severstal is no longer in
discussions with the Company or its Board regarding any such
transaction. At a recent board meeting, High River's Board of Directors
unanimously voted to dissolve the Special Committee of independent
directors.
The Company will continue reviewing alternative financing arrangements;
however, at this point no specific proposals have been identified.
Change to High River's Board of Directors
Terrence Lyons, Chairman of the Board of High River and a member of the
Company's Special and Audit Committees, has tendered his resignation,
effective March 31, 2009, due to the demands of his other business
interests. Mr. Lyons temporarily joined High River's Board of Directors
in September 2008, primarily to oversee the Special Committee on behalf
of shareholders. High River's Management and Board of Directors thank
Mr. Lyons for his considerable effort and success in steering the
Company through its recent restructuring. A replacement has not yet been
found.
About High River
High River is a gold company with interests in producing mines, mines
under development, and advanced exploration projects in Burkina Faso
and Russia.
FORWARD LOOKING STATEMENTS
This release and subsequent oral statements made by and on behalf of
the Company may contain forward-looking statements. Wherever possible,
words such as "intends", "expects",
"scheduled", "estimates", "anticipates",
"believes", and similar expressions or statements that
certain actions, events or results "may", "could",
"would", "might" or "will" be taken,
occur or be achieved, have been used to identify these forward-looking
statements. Although the forward-looking statements contained in this
release reflect management's current beliefs based upon information
currently available to management and based upon what management
believes to be reasonable assumptions, High River cannot be certain
that actual results will be consistent with these forward-looking
statements. A number of factors could cause events and achievements to
differ materially from the results expressed or implied in the
forward-looking statements. These factors should be considered
carefully and prospective investors should not place undue reliance on
the forward-looking statements. Forward-looking statements necessarily
involve significant known and unknown risks, assumptions and
uncertainties that may cause High River's actual results, event,
prospects and opportunities to differ materially from those expressed
or implied by such forward-looking statements. Although High River has
attempted to identify important risks and factors that could cause
actual actions, events or results to differ materially from those
described in forward-looking statements, there may be other factors and
risks that cause actions, events or results not to be anticipated,
estimated or intended. There can be no assurance that the
forward-looking statements will prove to be accurate, as actual results
and future events could differ materially from those anticipated in
such statements. Accordingly, prospective investors should not place
undue reliance on forward-looking statements. Any forward-looking
statements are made as of the date of this release, and High River
assumes no obligation to update or revise them to reflect new events or
circumstances, unless otherwise required by law.
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