Russia subsid powers High River

High River Gold Mines‘ (HRG-T) attributable gold production grew by more than 43,000 oz. in 2002 thanks to an increased stake in its Russian subsidiary, Buryatzoloto.

During the year, High River boosted its position in Buryatzoloto, which operates the Zun-Holba and Irokinda mines in southern Siberia’s Buryatia autonomous region, east of Lake Baikal, by 29.3% to 55.8%.

High River’s share of production from the two mines came to 85,669 oz., up from 39,002 in 2001. In all, the mines poured 153,392 oz. at an estimated cash cost of US$186 per oz. during 2002, up from 147,179 oz at US$173 per oz. in 2001.

In October, Buryatzoloto commissioned an 86-km-long power line connecting Zun-Holba to the local power grid ahead of schedule and on budget. The move is expected to reduce operating costs by around US$15-$20 per oz. The Irokinda operation is already hooked up to the local power grid.

In southern Siberia’s Amur region High River is in the midst of an audit aimed at bringing the Berezitovoye gold project’s reserve figure in line with Canadian Institute of Mining, Metallurgy and Petroleum (CIM) standards. Results from a 17-hole drilling program are expected by the end of February. High River and Buryatzoloto have begun preparations for a feasibility study at the project; a production decision could come this year.

In July, High River inked a deal to acquire Berezitovoye by issuing up to 6.8 million treasury shares and paying US$2.75 million to the Russian company Khaikta. The final number of shares issued depends on the size of the proven and probable gold reserves outlined in a feasibility study.

Near-surface resources at Berezitovoye run 14.1 million tonnes grading 3.05 grams gold and 14.3 grams silver per tonne, plus 0.93% zinc and 0.57% lead, based on a cutoff grade of 1 gram gold per tonne.

Meanwhile, High River’s take from its half-interest in the New Britannia mine in Manitoba rang in at 53,745 oz., down from the 57,264 oz. in 2001. During the year, the mine operated by TVX Gold (TVX-T), churned out 107,490 oz. at US$206 per oz., down from the 114,529 oz. produced at US$186 each in 2001.

New Britannia is held by the TVX Newmont Americas joint venture, formerly TVX Normandy Americas. As part of a recently approved 3-way merger deal with Kinross Gold (K-T) and Echo Bay Mines (ECO-T), TVX, which already has a 50.1% stake, will purchase Newmont Mining‘s (NEM-N) 49.9% interest in the joint venture for US$180 million.

In the end, Newmont will have a 14% interest in the new Kinross.