|
TORONTO, ONTARIO--(Marketwire
- May 19, 2009) - High River Gold Mines Ltd. ("High River" or
the "Company") (TSX:HRG) would like
to provide an update on the operating status of its four gold mines and
its financial situation:
Financial Status (Liquidity and Capital Resources)
As of April 30, 2009, High River's total consolidated debt outstanding
was estimated at approximately US$ 122 million. This includes: (a) US
$54 million under various loans between Nomos
Bank and High River's Russian subsidiaries, Buryatzoloto
and Berezitovy; (b) US $27 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 OAO Severstal
("Severstal") and High River and Somita SA (this loan was previously held by
Standard Bank plc and assigned to Severstal
on April 20, 2009). The Company continues to be in breach of certain
financial covenants under the loan agreements with Royal Gold Inc. and Severstal, 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 May and June 2009 amount to
approximately US $15.5 million, with approximately US $22 million
additional repayments due in the second half of 2009. Additionally, as
of April 30, 2009, the Company's consolidated accounts payable totalled
US $20 million.
As of May 11, 2009, High River's head office cash position totalled
approximately US $0.6 million, and consolidated cash totalled
approximately US $7.4 million.
The Company is continuing to consider alternatives regarding additional
financing required to ensure that it will be able to meet its financial
obligations. However, there can be no assurances that the Company will
secure the required financing.
Operations Update (March and April, 2009)
Taparko
The scheduled mid-March shutdown began on March 18th and lasted until
March 31st when the mill was restarted. During the shutdown, new ball
mill liners were installed to eliminate recurring liner breakage and to
lower mill vibration levels. However, since the restart, the mill has
failed to achieve stable operation and has shown no improvement in
throughput rates. Vibration levels at the pinion/girth gear interface
remain high and problems with excessive cyclone pump wear resulted in a
further decrease of the mill average throughput rate to 81 tonnes per
operating hour in April from 87 tonnes per operating hour in March. The
Company continues to undertake actions to correct these problems and to
increase mill throughput and recovery.
Gold poured at Taparko during March and
April, 2009 totalled 7,726 ounces and 4,088 ounces, respectively.
Berezitovy
During March, the Berezitovy mill was shut
down for 9 days and average mill utilization was at 60% due to
scheduled mill maintenance (replacement of SAG mill liners and
unloading grates), and additional extra work which was done to take
advantage of the downtime (replacement of SAG mill lifters, ball mill
motor repair, etc.). Mill utilization during April was significantly
higher at 80%. The Company continues to undertake actions to correct
the problems described in our February 2, 2009 press release to
increase mill throughput and recovery.
Gold poured at Berezitovy during March and
April, 2009 totalled 6,529 ounces and 8,623 ounces, respectively.
Buryatzoloto (Zun-Holba
and Irokinda)
The Zun-Holba and Irokinda
underground gold mines reported no material challenges or shortcomings
in their operations during March and April, 2009 and continue to operate
according to plan.
Gold poured at Buryatzoloto during this
period totalled 22,487 ounces.
About High River
High River is a gold company with interests in producing mines 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.
|