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Gold miner climbs 15% in early trading Thursday

11/20/2008 10:08:45 AM | Buzz on the Boards
901 Reads | 1 Comments

Equity financing for High River Gold Mines.

High River Gold Mines (TSX:T.HRG, Stock Forum) announced Thursday that it is entering into a non-brokered private placement of more than 282 million common shares and over 40 million warrants.

The company says its board of directors, and independent directors “have determined that the Corporation faces serious financial difficulty and that the proposed transaction has been designed to improve the financial position of the Corporation.” It added that as a result of relying upon the financial hardship exemptions, the TSX will start a delisting review.

High River, a gold company with exploration projects in Burkina Faso and Russia, says that Lybica Holding B.V., an affiliate of ZAO Severstal Resources, the mining division of OAO Severstal has agreed to purchase the shares for approximately 20 cents per share resulting in gross proceeds of over $56 million for High River.

Severstal, through its affiliates, currently holds over 30 million shares of High River totaling 9.9% of outstanding common shares. After the offering is completed, the company will hold more than 312 million shares, or 53% of the outstanding common shares.

Proceeds of the offering will be used for repayment of $15 million to Nomos Bank, provision of $9 million to Société Des Mines De Taparko for working capital needs, repayment of $10 million to Nomos Bank and for general corporate purposes.

On the High River Gold Bullboard on Thursday, Power1 said: “Couple of items to skate through, but I like the financial backing and being it is a controlling investment, this group will generate shareholder value IMO.  They will definately want price appreciation which may ultimately result is share rollback IMO[sic].” 

goldlust added: “The real unknown at present is the price of gold. If it skyrockets as many predict, the share price will move up very quickly with four operating mines![sic]” 

Shares of High River climbed 15% to 11.5 cents in early trading Thursday, after closing up 11% to 10 cents Wednesday, with over 11 million shares traded.

 
 
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Olderwisernow4
This is the best bet currently, in my opinion, for a leverage on gold and silver price move, in a stock. Why? The current cap of the company is a joke. With four operating gold mines, and perhaps the biggest, or for certain in the top three new silver properties in the world, at .11 cent range, extremely cheap. As well, the buyers are paying more for the placement, they accumulated 10% over the last short while buying up everything in site while panic sellers helped them out. This is truly a case where folks should look carefully at what they own, control and can develop over the next few years. The proven reserves at the Silver property, Prognoz (which is moving from 50% owned to 100% owned) are very large. They could ultimately go to 1 Billion ounces, but certainly appear greater than 400 million ounces now. Even though many look to the now larger share picture 600 million+ shares out now, at .11 it is valued at under 70 million dollars. Buy when NOBODY wants them. This is a steal.
 
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