High River Gold Financial Results

Highlights of the financial and operational results of High River Gold (HRG-T) for 2003, as well as this year’s first quarter results show that the company is in transition.

High River reported a loss of $ 17 million in contrast to a profit of $1.7 million in 2002. This was primarily because of a write-down of $14 million attributed to the company’s share of the New Britannia mine, which is slated for closure in the latter part of this year.

The New Britannia mine in Snow Lake, Manitoba is 50%-owned by High River and 50% by Kinross Gold (K-T). The companies recently decided that the grade and tonnage of the deposit no longer warrant further development. In 2003, cash costs per ounce rose to US$329 from $206 a year earlier, and in the first quarter of 2004 the cost was US$425, insufficient to provide a profit with the realized gold price averaging US$418. The plan is to continue mining developed ore over the next few months and then to close the mine.

In contrast, High River’s 54.1%-owned Russian subsidiary, Buryatzoloto, reported a 2003 profit of $9.7 million. Buryatzoloto owns the Zun-Holba and Irokinda underground gold mines, as well as a small placer operation that together produced 154,000 ounces of gold in 2003 at a cash cost of US$194 per ounce. Total production in 2003 was 485,245 tonnes grading 10.1 grams gold per tonne. The realised gold price was US$358 per ounce.

Costs were up by $30 an oz. at Buryatzoloto because of a transition to cut-and-fill mining at Zun-Holba and a negative impact caused by the strength of the Russian ruble.

The overall attributable gold production for the first quarter was 25,604 oz. at a total cash cost of US$286 per ounce; net income was $1.4 million and cash flow was $5.2 million.

High River has two advanced exploration projects set for open pit development, the Taparko gold project in Burkina Faso, West Africa and the Berezitovoye gold project in southern Siberia, Russia.