Russian mines haul up earnings for High River

Consolidation of the results from its Russian subsidiary, Buryatzoloto, has given High River Gold (HRG-T) a significant increase in revenue and earnings.

The company finished the three months ended Sept. 30 with a profit of $1.5 million (or 2 per share) on revenue of $24.9 million, and in the first three quarters of 2002, earnings totalled $2.9 million on revenue of $57.8 million.

In the third quarter of 2001, High River lost $561,000 on revenue of $6.8 million, and it showed a loss of $4 million on revenues of $18.4 million after the first nine months of 2001.

The improvement in the financial results mainly rests on the consolidation of the Buryatzoloto operations, since the beginning of the second quarter. The two Buryatzoloto mines, Zun-Holba and Irokinda, have contributed a total of 65,840 oz. gold to High River’s production so far this year and are expected to produce 150,000 oz. by year-end, of which High River’s share would be 81,907.

Total cash costs at the Buryatzoloto operations have averaged US$183 per oz. this year, up from US$166 per oz. in 2001. To the end of September, the operation realized an average of US$302 per oz., up from US$261 in the previous year.

High River’s other producing interest, the New Britannia mine in Snow Lake, Man., has provided steady results for the year to date, pouring 85,486 oz. gold at a cash cost of US$198 per oz. High River has a half share in production from New Britannia, which is operated by half-owner TVX Gold (TVX-T). Although New Britannia has mined slightly lower grades so far this year — 4.96 grams per tonne, against 5.25 grams in the first three quarters of 2001 — it is on track for production above the 2002 target of 110,000 oz., thanks to increased mill throughput and steady recoveries.

Outside exploration at New Britannia, managed by High River for the joint venture, started in the second quarter of the year with the aim of discovering satellite deposits that could supply the mill.

The deal, under which Harmony Gold Mining (HGMCY-Q) will take over the 21% interest that Japanese gold investment company Jipangu held in High River, was expected to close at presstime. (Outdated information that Jipangu had held a 32.5% interest in High River appeared in the Miner’s Nov. 18 issue.)