High River posts record production (February 11, 2002)

During 2001, High River Gold Mines (HRG-T) produced a record amount of gold from its 50%-owned New Britannia mine in Manitoba and from the mines of Buryatzoloto, a Russian company in which High River has a 53% interest.

New Britannia produced 114,529 oz. at a cash cost of US$186 per oz., compared with the 105,512 oz. produced at US$210 per oz. during 2000. The mine’s production is shared equally by High River and partner TVX Normandy Americas, a joint venture between TVX Gold (TVX-T), with a 50.1% interest, and Normandy Mining (NDY-T), with 49.9%.

During the year, High River and TVX Normandy agreed to split management responsibilities at New Britannia. TVX Normandy is responsible for the mine and underground exploration. A drill program planned for 2002 is aimed at determining the potential for extending the ore to the 1,370-metre level on both the Dick and the Ruttan zones. High River will manage a regional exploration program aimed at finding and defining nearby satellite deposits. The two companies share a $500,000 annual management fee equally.

Buryatzoloto owns and operates the Zun-Holba and Irokinda gold mines in southern Siberia, which together produced 147,176 oz., compared with 127,128 oz. a year earlier. Cash costs for 2001 are estimated at US$173 per oz., up US$8 per oz. from 2000. The 16% increase in production is attributed to a switch to year-round operation at the Irokinda mill.

In early October, High River acquired an additional 10% stake in Buryatzoloto in a deal valued at $2.9 million. The Japanese gold investment fund Jipangu received 5.1 million shares of High River for its 10% direct holding in Buryatzoloto. Jipangu now owns 32.5% of High River.

Construction has begun on an 86-km-long powerline to connect Zun-Holba to the local power grid. The line should be ready by the end of the year and is expected to generate savings of up to US$25 per oz. gold.

During the latest quarter, High River realized an average of US$274 per oz., compared with US$280 in the last quarter of 2000. For all of 2001, the company estimates its average realized price at US$267 per oz., US$11 ahead of the pace set in 2000.

At the advanced Taparko project in Burkina Faso, High River has completed deep drilling aimed at extending Zone 3/5 to 200 metres below surface. Strathcona Mineral Services completed its prefeasibility study and confirmed that the project is sub-economic at current gold prices. High River is reviewing its options and looking for nearby deposits, as well as a possible joint-venture partner.

High River has a 61.5% interest in Taparko, where resources are pegged at 12.6 million tonnes grading 2.6 grams gold per tonne. The junior holds an option for an additional 18.5%, with the remaining 20% held by the government of Burkina Faso.

High River recently entered into an agreement, under which Sprott Securities agreed to act as lead agent for an offering of up to 11.1 million High River units at 90 apiece on a best-efforts basis. One unit comprises one High River share plus half a warrant. One whole warrant allows the holder to buy an additional share at $1.20 for one year. The offering is slated to close by Feb. 18.