High River takes on Russian silver project (August 14, 2006)

The Russian subsidiary of High River Gold (HRG-T), Buryatzoloto, has lined up an agreement with private Russian company Gazteck Industry that will give Buryatzoloto a 50% interest in an undeveloped silver project in the Yakutia region of northeastern Russia.

Under the deal, Buryatzoloto provides US$7.3 million cash and settles another US$14.7 million in liabilities for Gaztech, in exchange for the 50% interest in the Prognoz project, 450 km north of Yakutsk. Gaztech holds a 20-year exploration and mining licence on a 56-sq.-km land package, which it got in a 2005 auction.

Gaztech has kept a buyback right, at what High River describes as “a substantial penalty,” but that right can be bought out for roughly US$8 million.

Soviet-era and post-Soviet resource estimates at Prognoz put the size of the deposit at 5 million tonnes grading 876 grams silver per tonne in C2 reserves, corresponding roughly to indicated and inferred resources. Another 2.3 million tonnes at an average 708 grams per tonne fell into the Russian P1 category, essentially making for more inferred resources. The resources are in two zones, Glavnoye and Boloto.

Glavnoye is a 5,000-metre, south-dipping vein structure varying from a metre to about 25 metres in width, and known to extend to depths between 200 and 600 metres. Silver grades on Glavnoye average 930 grams per tonne, with about 3% lead and 0.7% zinc. The mineralization is in quartz-carbonate veins and breccia zones, and is carried in galena, sphalerite and sulphosalt minerals.

Boloto, south of Glavnoye, is a similar vein structure about 2,400 metres long, dipping steeply northward. Its thickness ranges from 0.7 to 7 metres and silver grades average 450 grams per tonne, with about 2% lead and 0.9% zinc.

There are 17 other veins with a similar style of mineralization.

In 1988, gravity and flotation tests on samples from Glavnoye found recoveries of 92% for silver, 89% for lead and 73% for zinc.