High River Gold buys remainder of Prognoz silver project in Russia

High River Gold Mines (HRG-T) is snapping up the remaining 50% stake in the Prognoz silver project in the Republic of Sakha in the Russian Federation, about 444 km north of the capital city of Yakutsk.

Under the agreement, High River will issue 34.1 million shares representing 9.9% of the issued capital of the company and will assume about US$16 million in debt related to past exploration on the property.

High River currently owns an indirect 50% interest in the silver project, which it describes as “one of the largest and highest grade undeveloped silver projects in the world.”

The 56-sq-km property hosts more than 30 high-grade epithermal veins.

In June, High River released an updated National Instrument 43-101 compliant resource estimate on the deposit.

In the indicated category, Prognoz contains 4.49 million tonnes grading 704 grams silver per tonne for total contained silver of about 102 million oz. In the inferred category, Prognoz hosts 4.87 million tonnes grading 659 grams silver per tonne for total contained silver of about 103 million oz.

Mineralization is epithermal in origin and regionally, the Prognoz property is within the Verkhoyansk mobile belt, a major fold-and-thrust belt that forms part of one of the earth’s great orogenic systems, High River states on its website.

The district where the Prognoz deposit is located covers the areas of the Sartang sinclinorium at the west with the Adychan fold-and-block dome to the east. The boundaries of the majority of the mineralized deposits on the property are determined by the intersection of longitudinal and lateral faults.

More than 30 veins have been identified on the property. Many of the vein sets are multi-km in length, and on average 2- 4 metres wide and more than 200 metres deep.

The veins are moderately to steeply dipping. Mineralization occurs as quartz-carbonate-sulphide-sulphosalt cement within fault breccia, veins and stringers. Host rocks are largely sandstone and mudstone.

During 2006 and 2007, High River’s 85%-owned Russian subsidiary drilled more than 650 core holes (over 59,500 metres), completed 4 adits for a total of 187 metres and extracted a 17-tonne bulk sample for metallurgical test work. Historical work has consisted of 89 diamond drill holes (17,805 metres) and 317 trenches (17,756 metres).

The company is also bringing two new open-pit gold mines into production.

In Burkina Faso, its Taparko-Bouroum gold mine poured its first commercial gold in October last year. In Russia, its Berezitovy gold mine is expected to move into commercial production in the third quarter of this year.

When fully operational, annual gold production is planned to be about 100,000 oz. at Taparko-Bouroum and will likely exceed 100,000 oz. at Berezitovy.

The company’s two underground mines in Russia, Zun-Holba and Irokinda, produce about 150,000 oz. gold per year — 125,000 oz. of which is attributable to High River Gold.

In terms of exploration, High River has two advanced projects apart from Prognoz, the Bissa gold project in Burkina Faso and the Chaya nickel project in Russia.

The Bissa project, 80 km north of the capital of Ouagadougou, has a measured resource of 753,000 grading 3.39 grams gold per tonne for 81,980 oz. gold and an indicated resource of 11.25 million tonnes grading 1.6 grams gold per tonne for total contained gold of 580,270 oz. Bissa also has an inferred resource of 16.39 million tonnes grading 1.29 grams gold per tonne for 679,470 oz. gold.

In Toronto, High River is trading at about $1.41 per share. It has a 52-week high of $3.50 and a 52-week low of $1.33.

The Canadian junior has 307.9 million shares outstanding.