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Message: Provides Update on Its Financial Status/Severstal Resources/Board Changes
| March 30, 2009 |
| High River Gold Provides Update on Its Financial Status and Takeover/Financing Discussions With Severstal Resources, and Reports on Change to Its Board |
| TORONTO, ONTARIO--(Marketwire - March 30, 2009) - High River Gold Mines Ltd. ("High River" or the "Company") would like to provide an update on its financial status, recent discussions between Severstal Resources ("Severstal") and High River's Board of Directors regarding additional financing and/or a possible takeover, and would like to report a change to its Board of Directors. Financial Status (Liquidity and Capital Resources) As of March 1, 2009, total High River consolidated debt outstanding was estimated at approximately US$ 137 million. This includes: (a) US$ 64 million under various loans between Nomos Bank and High River's Russian subsidiaries, Buryatzoloto and Berezitovy; (b) US$ 29 million under a loan agreement between Royal Gold Inc. and High River's subsidiary, Somita SA; and (c) approximately US$ 27 million under loan agreements between Standard Bank Plc and Somita SA and High River. The Company continues to be in breach of certain financial covenants under the loan agreements with Royal Gold, Inc. and Standard Bank Plc, who have not taken any actions thus far but have reserved their rights to do so. Total scheduled principal and interest debt repayments due in March 2009 amounted to approximately US$ 7 million, with an additional US$ 27 million due in the second quarter of 2009 and approximately US$ 22 million due in the second half of 2009. Additionally, as of March 1, 2009, the Company's consolidated accounts payable amount to US $23 million. As of March 24, 2009, High River's head office cash position totaled approximately US$ 3 million, and consolidated cash totalled approximately US$ 23 million. Recent Discussions between Severstal and High River The ability of the Company to continue as a going concern is dependent on the results of ongoing discussions with the Company's lenders, ongoing accommodations from the Company's trade creditors, the establishment of steady production at the Taparko-Bouroum and Berezitovy mines, and obtaining additional financing. As described in its January 2, 2009 press release, High River has been considering additional debt or equity financing arrangements to meet its financial obligations. In this regard, Severstal and a Special Committee comprised of independent directors of High River have discussed, on an arm's length basis, the possibility of Severstal acquiring the remaining outstanding common shares of High River and/or providing debt or equity financing to High River. However, Severstal and the Special Committee have been unable to agree on the terms of any such transaction and, as a result, Severstal is no longer in discussions with the Company or its Board regarding any such transaction. At a recent board meeting, High River's Board of Directors unanimously voted to dissolve the Special Committee of independent directors. The Company will continue reviewing alternative financing arrangements; however, at this point no specific proposals have been identified. Change to High River's Board of Directors Terrence Lyons, Chairman of the Board of High River and a member of the Company's Special and Audit Committees, has tendered his resignation, effective March 31, 2009, due to the demands of his other business interests. Mr. Lyons temporarily joined High River's Board of Directors in September 2008, primarily to oversee the Special Committee on behalf of shareholders. High River's Management and Board of Directors thank Mr. Lyons for his considerable effort and success in steering the Company through its recent restructuring. A replacement has not yet been found. About High River High River is a gold company with interests in producing mines, mines under development, and advanced exploration projects in Burkina Faso and Russia. |
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