High River Gold Mines adds to Buryatzoloto stake

Junior gold producer High River Gold Mines (HRG-T) has inked a deal with Japanese gold finance company Jipangu under which the former will increase its holding in Russian gold producer Buryatzoloto to 43.4%.

Jipangu, which currently owns 16.9% of Buryatzoloto, will trade its interest for 5.1 million shares of High River. The deal, in effect, unbundles the interests Jipangu held in both High River and Buryatzoloto, turning them into a single 32.5% shareholding in High River. Negotiations with a minority shareholder that controls an 8% interest in Buryatzoloto are also under way.

Buryatzoloto, the third-largest gold producer in Russia, operates the Zun-Holba and Irokinda mines in the Buryat autonomous region in eastern Siberia. The company produced 127,128 oz. gold in 2000 at a cash cost of US$133 per oz., and in the first quarter of 2001, it poured 35,266 oz. Total cash costs (before capital and reclamation charges) amounted to US$159 per oz. in the quarter, down from an average of US$165 in the first three months of 2000.

The consolidation follows another deal, at the Taparko gold project in Burkina Faso, where High River, which owns a 61.5% interest, took an option to acquire the 18.5% held by Queenstake Resources (QRL-T) after Queenstake purchased privately held Incanore Resources.