THE GLOBAL SEARCH FOR GOLD SPECIAL — High River boosts stake in Focal

An agreement with a private Alberta company sets the stage for High River Gold Mines (HRG-T) to increase its equity interest in Focal Resources (FCJ-A).

Prior to the agreement, High River held 1.05 million shares or warrants to acquire shares, representing 9.08% of Focal. The agreement with the private company allows High River to increase this to 13.4% by acquiring a further 500,000 shares at $2 per share.

High River also has a separate agreement with Focal to acquire a further 1 million units at $1.65 per unit, for gross proceeds of $1.65 million. Assuming all warrants are exercised, High River’s interest in Focal would increase to 17.5%, and then to 22.8%, if all warrants held by High River are exercised.

High River says the purpose of the transaction is to increase its investment in Focal, its joint-venture partner in 14 Central American properties. The list includes the Rio Siquia and Santo Domingo gold concessions in Nicaragua, which High River describes as “promising.”

Santo Domingo is situated at the eastern end of the Libertad gold district, on trend with many veins at the adjoining concession held by Greenstone Resources. At least 16 veins are known to occur on the Santo Domingo lease. The joint-venture’s drill program will target bulk-tonnage targets, as well as deeper, “bonanza” gold-silver veins.

Focal and High River are continuing their work program on the jointly held Rio Siquia concession, 1 km north of Santo Domingo. Several anomalous areas are being verified and examined in order to determine targets for trenching and drilling.

In nearby El Salvador, the joint venture is exploring a land package that includes several historic gold producers.

Separately, High River has interests in gold projects elsewhere in the world. In Burkina Faso, West Africa, the company can earn a 61% interest in the Taparko concession by spending US$5.9 million over about four years.

Among the best drill results reported from the Taparko project are: 13.1 ft. grading 0.347 oz. gold per ton; 13.9 ft. grading 0.455 oz.; and 17.7 ft. grading 0.506 oz.

Earlier this year, High River announced details of its acquisition of an interest in a Russian gold mining company that operates two underground mines and controls other properties in the Buryat Republic of southern Siberia. High River is the largest single shareholder, with a 22.9% (30.5% voting) interest. Indeed, with management’s interest of 18.2% (24.3% voting), High River effectively controls the company.

Proven and probable reserves are reported as 8.9 million tons grading 0.35 oz. gold per ton, plus additional possible resources of 26.7 million tons grading 0.2 oz. gold per ton. High River’s long-term goal is to expand the mine’s current production rate of 50,000-55,000 oz. annually.

High River’s production cornerstone remains its newly opened New Britannia gold mine in Manitoba, a 50-50 joint-venture with TVX Gold. The operation is expected to produce 100,000 oz. gold annually.