High River raises funds

Subject to regulatory approval, High River Gold Mines (HRG-T) will issue $5 million worth of covertible debentures to Sprott Securities in order to clean up its balance sheet.

The non-redeemable notes, which carry interest at 4% annually and mature in three years, can be converted into shares at 60 apiece. High River retains the right to force their conversion if its share price exceeds $1.20 for more than 30 consecutive days.

Two-thirds of the proceeds are earmarked for an existing US$5-million convertible debenture that matures Dec. 31. The early repayment is designed to improve the company’s working capital and reduce its interest costs. Jipangu, the company’s largest shareholder, has offered to finance the remaining costs of the debenture before the maturity date.

High River holds a half-interest in the New Britannia mine in Manitoba and a 43.4% stake in the Buryatzoloto mine in Siberia. Combined attributable production in 2001 is pegged at 120,000 oz. at a total cash cost of less than US$180 per oz.

High River also owns a 61.5% interest in the advanced Taparko project in Burkina Faso. The junior holds an option for an additional 18.5%, with the remaining 20% held by the government of Burkina Faso.

Resources at Taparko stand at 12.6 million tonnes grading 2.6 grams gold per tonne. Deep drilling is attempting to extend Zone 3/5 to 200 metres below surface.

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