New zone at Eagle River

Recent drilling by River Gold Mines (RIV-T) has identified a new zone of gold mineralization near the existing mine workings at the Eagle River mine, near Wawa, Ont.

Drilling has delineated the western edge of the zone, which has been traced for 300 metres downdip. The zone remains open at depth. Ongoing drilling is aimed at tracing the zone eastward. The company believes the new zone may be contiguous with the 202 zone, about 150 metres to the east.

Selected drill results are as follows:

q Hole 69 — 1.5 metres (true width) grading 15 grams gold per tonne at a depth of 595 metres;

q Hole 72 — 1.6 metres of 13.7 grams at 642 metres;

q Hole 78 — 1.8 metres of 45.2 grams at 365 metres;

q Hole 80 — 1.7 metres of 23.5 grams at 589 metres;

q Hole 83 — 1.7 metres of 12.5 grams at 480 metres.

All high assay results were cut to 60 grams gold per tonne.

The latest holes are part of a 42,000-metre underground and surface drilling program designed to replace and increase ore reserves in 2003. At the end of 2002, Eagle River’s proven and probable reserves stood at 1.2 million tonnes running 9.2 grams gold per tonne, equivalent to 351,000 contained ounces of gold, based on a cutoff of 3 grams gold.

In 2002, River Gold produced 78,800 oz. gold at a cash cost of US$229 per oz., down from the 89,900 oz. produced at US$198 per oz. a year earlier. The nearby Mishi mine provided 2,800 oz. of initial production.

During the year, Mishi’s proven and probable reserves were doubled to 210,700 tonnes averaging 3.1 grams gold. The company plans to carry out a $3-million program of underground exploration and development at the Mishi-Magnacon complex. The work will provide underground access to Mishi’s indicated resource of 1 million tonnes grading 5.1 grams gold. Drilling will also test several new veins.

For all of 2002, the company tallied a loss of $4 million (or 10 per share) on revenue of $38.4 million, compared with year-earlier earnings of $929,656 (3 per share) on $38.2 million. The loss is attributed to a $12-million non-cash charge for depreciation and amortization (expected to slip to about $6 million in 2003). On a brighter note, cash flow climbed slightly to $8.1 million.