High River eyes $3.7 million

High River Gold Mines (HRG-T) hopes to raise up to $3.7 million by offering its shareholders up to 9.2 million shares.

High River shareholders of record on June 20 will receive one right for every share held. Four rights will allow the holder to acquire one share for 40. The rights expire on July 26.

The rights will be listed for trading on the Toronto Stock Exchange. To be eligible to subscribe for shares, shareholders must reside in British Columbia, Alberta, Manitoba, Ontario or Nova Scotia. Alternatively, they must reside in a qualifying jurisdiction outside Canada.

The proceeds will fund: work on a deep drilling program on the Taparko gold project in Burkina Faso, West Africa, and; the acquisition of additional shares of Russian gold producer Buryatzoloto.

High River recently inked a deal with Japanese gold finance company Jipangu, under which the former will increase its holding in Russian gold producer Buryatzoloto to 43.4%.

Jipangu, which owns 16.9% of Buryatzoloto, will trade its interest for 5.1 million shares of High River. In effect, the deal unbundles the interests Jipangu held in High River and Buryatzoloto, turning them into a single 32.5% shareholding in High River. Negotiations are also under way with a minority shareholder who holds an 8% interest in Buryatzoloto.

Buryatzoloto, the third-largest gold producer in Russia, operates the Zun-Holba and Irokinda mines in the Buryat autonomous region of eastern Siberia.

The company produced 127,128 oz. gold in 2000 at a cash cost of US$133 per oz. In the first quarter of 2001, it poured 35,266 oz. Total cash costs (before capital and reclamation charges) amounted to US$159 per oz. in the quarter, down from an average of US$165 in the first three months of 2000.

The consolidation follows another deal at the Taparko project, where High River, which owns a 61.5% interest, took an option to acquire the 18.5% held by Queenstake Resources (QRL-T) after Queenstake purchased privately held Incanore Resources.