River turns to shareholders

Hard-pressed for cash, River Gold Mines (RIV-T) is attempting to raise $5.4 million by issuing just over 31 million rights to its shareholders.

Proceeds are earmarked for debt reduction, working capital and ongoing shaft-sinking at the River Gold mine, near Wawa, Ont. The shaft, which is scheduled to be operational in February, is expected to reduce hauling costs signficantly.

At last report, reserves at the mine stood at 1.2 million tonnes grading 10.14 grams gold per tonne. The orebody extends to 400 metres below surface, except in the shaft area, where it deepens to 460 metres.

River Gold lost $1.9 million during the first three months of this year and had a negative cash flow of $291,000. It ended the quarter with a working capital deficiency of $4.4 million and has since shut down the Edwards mine, also in the Wawa area, owing to the depletion of reserves.