17 Jul 2009 17:36

High River Gold boosts production 45.6% in H1

MOSCOW. July 17 (Interfax) - High River Gold, in which Severstal owns a 57.3% stake, increased gold production 45.6% to 156,791 ounces in the first half of 2009 from 107,681 ounces in the same period of 2008, the company said in a press release.

The Canadian company produced 76,794 ounces of gold in the first quarter and 79,997 ounces in the second quarter.

Severstal earlier made an offer to buy out HRG minority shareholders so it could consolidate 100% of the company. The offer, which remains in effect until July 31, envisions the buyout of shares at a price of 0.22 Canadian dollars per share with a premium of 39% against the market price at the moment the deal was announced. A special committee of HRG board directors supported the proposal and called it fair.

HRG had net debt of about $103.9 million as of June 30, including $75 million in short-term debt. The company continues to violate loan agreements with Royal Gold and Severstal.

In April, Standard Bank ceded the rights to $27 million in HRG debt to Severstal.

High River Gold owns 84.9% of Buryatzoloto, 50% in the company that holds the license to the Prognoz silver deposit in Yakutia, and 99% of the company that owns the license to the Berezitovoi.