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« Gold, Silver and Unhedged Producers | Main | Are Gold Pool Accounts Safe? »
Monday
Jan172011

High River Gold Mines Limited Spikes on Good News

HRG Chart 18 Jan 2011.JPG


As we can see from the above chart High River Gold Mines Limited (HRG) has spiked on recent developments as brought to us of Chris courtesy Charlwood as per his missive below:



January 16th, 2011   
 
Symbol: HRG.TO
 
High River Gold Minority Shareholders,
 
It looks like things are heating up again for a possible Severstal/Nord Gold IPO on the LSE. I have posted links below to 4 recent articles. They state that pre - IPO marketing starts next week and that ex-Anglo American exec, Phillip Baum, is to become Chairman of Nord Gold. The articles mention Nord Gold's value at up to $3.2B pounds or US$5B. HRG made up approx. 57% of  Nord Gold's total production in 9 months to September 30, 2010 (233k oz vs. 408k oz). Shareholders await drill results and the Prognoz bankruptcy decision to bottom out HRG's resource numbers, but on a production only basis, HRG's pro-rata value would be $2.85B or $3.39/share.
 
Q4 and year end results will probably be out on March 31 and the expectation is that HRG is back up to its Q2 production level of  87k oz. The average gold price in Q2 was $1195/oz whereas in Q4 it was $1389/oz - an increase of $194/oz. In Q2 HRG had $48.8M in cash flow. Assuming costs have remained the same, the extra $16.8M in revenues would bring HRG's cash flow  to $65.6M. If so, then the current market cap of $1.02B has HRG trading at a low 3.9 times cash flow. At the end of Q3, HRG had $125.6M in cash and equivalents. HRG's third party stock holdings are currently worth $101M. Therefore, at the end of Q4, HRG should have $226M (cash, equivalents, third party stock) plus Q4 cash flow less exploration expenses. Perhaps we will see a net number over $250M or $.30/share.
 
As we wait for the Q4 results, we are hoping for announcements stating that our $101M of third party stock investments have been freed up for liquidation and that the Prognoz Silver bankruptcy has been resolved  in HRG's favour. Also, we are expecting updates on exploration and drilling at Bissa, Zun-Holba and Irokinda mines.
 
Articles 
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=apcpJ97umBw8
 
http://www.interfax.com/newsinf.asp?id=215069
 
http://www.themoscowtimes.com/business/article/severstal-gold-unit-eyes-ipo/428962.html
 
http://www.fm.co.za/Article.aspx?id=131402
 
Chris Charlwood
Investor
Rainerc7@gmail.com

www.stockhouse.com  - ongoing communication on HRG
 
 
 

Footnote:



It's official! This announcement came out a few hours after I sent my previous communication. Severstal/Nord Gold is referencing the Prognoz asset as if it will be retained in the portfolio - a positive sign.
 
 
http://www.investegate.co.uk/article.aspx?id=201101170700105447Z
 
Chris Charlwood
Investor
Rainerc7@gmail.com

www.stockhouse.com - ongoing HRG communication

We are still holding on to our position in High River Gold Mines Limited and have no intention of selling any of this stock in the foreseeable future.



.....................................................................................

Over in the options trading pit, we now have 59 winners out of 61 trades, or a 96.72% success rate. If you have any questions regarding these trades please address them through their site where they will be handled quickly and I hope efficiently.


sk chart 10 Dec 2010.JPG

The above progress chart is being updated constantly. However, to see exactly how it is going, please click this link.

So, the question is: Are you going to make the decision to join us today, before we decide to cap membership.

Stay on your toes and have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.


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Reader Comments (2)

Get ready for lift off, Hope you guys held onto your shares. Keep up the Great work!

January 17, 2011 | Unregistered CommenterVincent

Vincent,

We have not sold one share. Its been a long slog but things do appear to be improving so we will continue to hold.

January 17, 2011 | Unregistered CommenterGold Prices

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