South African’s third largest gold producer, Harmony Gold
Mining Company, announced yesterday that it has entered into a
share purchase agreement with Jipangu to acquire 17 074 861 common
shares of High River Gold Mines, representing an approximate 21%
interest in the issued share capital of the company.
The total purchase consideration amounts to $14,5-million
(R145-million) and the transaction is scheduled to close on
November 22.
High River Gold is a Toronto-based company with gold interests in
Russia, Canada and West Africa.
The move is in line with Harmony’s ambitions to expand into
Russia – rated the world’s sixth largest gold producer
in 2001 – as stone crusher equipment price ethiopiaHigh River Gold’s principle assets include
a 53% fully diluted equity interest in OJSC Buryatzoloto, the fifth
largest gold producer in Russia, with two operating mines producing
a total of some 150 000 oz a year.
As at the end of 2001 Buryatzoloto reported reserves and resources
of 1,4-million ounces and 5,3-million ounces respectively. Another
High River Gold asset is an agreement to asimple mobile crusher screen plantcquire a 100% interest in
the Berezitovoye Project situated in Siberia, Russia.
Harmony says the Berezitovoye deposit is amenable to open-pit
mining and under the Russian classification system contains
reserves of 1,38-million ounces gold and 6,49-million ounces
silver.
The Canadian miner also holds a 50% interest and joint operatorship
of the New Britannia gold mine situated in Manitoba, Capicture of crusher run aggregate for paversnada –
producing about 110 000 oz a year. As at the end of 2001, New
Britannia reported reserves and resources of 360 000 oz and 760 000
oz respectively.
Furthermore, High River Gold has an 80% interest in the Taparko
gold project in Burkina Faso, which has a gold resource of
approximately one-million ounces.
The securities will be acquired by way of the Purchase
Agreement.
Harmony says it has purchased the common shares for investment
purposes only and not with the purpose of influencing control or
direction over High River Gold. The company says it may –
subject to market conditions – make additional investments in
or dispositions of securities of High River Gold in the future,
including additional purchases of common shares of High River Gold,
both as investment conditions warrant. Harmony currently has no
holdings of High River Gold securities.
“While this transaction, in terms of timing and pricing, is
somewhat opportunistic, Harmony holds High River Gold and its
management team in high regard. We have held various discussions
with the company over the last few years and look forward to
further developing our relationship with High River Gold and
becoming supportive shareholders of the company,” says
Harmony CE Bernard Swanepoel.
Harmony in May of this year acquired a 32% stake in Highland Gold,
a private company with a package of prospective exploration assets
and a gold producing mine in Russia.
In accordance with its traditional growth strategy – the
South African company has completed 23 acquisitions in the past six
years – Harmony identified various possible exploration
projects on Russia and central Asia earlier this year, announcing
its desire to enter into joint venture deals in these
regions.
“We continue to be impressed by the highly prospective
orebodies and good mining infrastructure in Russia. Through our
participation in both Highlands Gold and High River Gold, we will
be in a position to identify further growth opportunities available
to the company in that country,” adds Swanepoel.
The price payable is $0,85 a High River Gold share, which
represents an approximate 16% discount on the weighted average
share price for the 30-day trading period prior to the execution of
the agreement.