High River Gold Mines (HRG-T) has reached agreement to acquire Japan-based Jipangu’s 16.9% interest in Buryatzoloto, the third-largest gold producer in Russia, for the issuance of 5.1 million shares.
Under the deal, High River’s interest in Buryatzoloto would increase to 43.4% of the voting shares and Jipangu’s interest in High River would climb to 32.5%.
The deal is subject to shareholder and regulatory approval, including approval by the Ministry of the Russian Federation for Anti-Monopoly and Support of Businesses.
Buryatzoloto owns and operates the high-grade Irokinda and Zun-Holba underground gold mines in the Republic of Buryatia in southern Siberia. During 2000, Buryatzoloto produced 127,128 oz. gold (up 26% from a year earlier) at a total cash cost of US$165 per oz. Gold production for 2001 is forecast at 140,000 oz. For the first three months of 2001, production tallied 35,266 oz. at US$159 per oz.
At the end of 2000, Buryatzoloto’s gold reserves and resources totalled 5.3 million oz., based on a gold price of US$300 per oz.
During 2000, the company spent US$5.9 million on exploration and equipment, resulting in the discovery of four high-grade, low-cost veins. It plans to convert the mill at one of its mines from seasonal to year-round operation.
High River says it is negotiating to acquire another 8% interest in Buryatzoloto. This would give the company a 51% interest.
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