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HRG Nord offer final communication

Always appreciated we now have an update from Chris Charlwood who has very kindly sent us this missive updating us on the current state of play over at High River Gold Mines Limited (HRG) which we hope that you find interesting and informative.

Well this looks like the end of the road for us despite Chris's valiant efforts the writing appears to be on the wall. Chris lays out the various actions now open to us and its up to each individual investor to decide for themselves what action to take.

We wish to thank Chris most sincerely for all he has done in getting the offer up to this level without him we would surely be looking at a much smaller return.

So, here it is, the last update:

November 29, 2012

High River Gold Shareholders,

Nord Gold has announced that it has received 108.2M shares ( 51.6% of HRG minority shares) that tendered to its offer of .285 Nord share for each HRG share or $1.40 per share in cash. Of those that tendered, 66.3M took Nord shares (including original 59.9M locked-up) and 42M took cash. On our side, those holding 101.4M shares or 48.4% of minority did not tender to the offer. It was a very close race with us short of majority by 3.4M shares. As Nord did not get 90% of minority to tender their shares to this offer, they will not be able to squeeze us out immediately. However, Nord says it will now carry out a subsequent transaction where a shareholder vote is required. Majority of minority carries this vote and an overall majority is required for corporate law purposes. Since Nord already received a majority of minority shares by way of tender, they will vote these shares in favour of the subsequent transaction. This guarantees the transaction will proceed and the rest of the HRG minority will be squeezed out. I expect such a squeeze out transaction would complete in Jan-Feb.

Nord has announced an extension of the current offer to Dec. 8, 2012 to encourage more minority shareholders to tender so that Nord avoids the time and costs involved in carrying out the subsequent offer and shareholder vote. This can be accomplished by them picking up 90% of the shares now. They currently own 87.9%. We remaining minority shareholders essentially have 3 choices at this stage:

1. Tender to Nord’s offer of $1.40/share and receive cash shortly (within 10 days of deposit).

2. Tender to Nord’s offer of .285 Nord share for each HRG share and receive shares (within 10 days of deposit).

3. Do not tender now and dissent to the subsequent transaction. Dissention means that you give up your shares to HRG (which are held in Trust for Nord) and you wait for a court to decide what is fair value for your shares. This could take well over a year to come to conclusion and in the meantime you do not receive any cash for your shares. Also, the judge may decide that the shares are worth the same, less or more. There are also significant costs involved for a dissenter.


In order to make your decision, you need to think about whether a judge will be persuaded by a dissenters evidence that the fair value is higher than $1.40 per share - and not just rely on the Paradigm report range of values. You need to think about whether Nord has the ability to leverage HRG’s assets (along with Nord’s other assets) into a significant increase in Nord’s stock price. If you are not confident in either of these scenarios, then you can tender your shares for cash now and move on to other investments. If you choose to do either 1 or 2, you need to follow the instructions in the materials already sent to you from Nord Gold on how to tender your shares. You can also call your broker for assistance. If you are going to dissent, do not tender your shares by Dec. 8th and wait for the materials from Nord regarding the subsequent offer or squeeze out notice. The instructions for dissention should be explained in detail in that material including what form of registration your shares need to be in. I have decided not to dissent because I believe the process is unfair to minority shareholders in that you potentially have a long wait period without your shares or cash and are at risk of the final outcome in court. Also, such judgements, even if in your favour, can be appealed by Nord causing further delay. Therefore, I have decided to tender my shares for $1.40/share and move on to other investments. We do have the right to sue for minority shareholder oppression even if we have sold our shares so I will continue to investigate the merits of taking legal action against Nord (after the fact). For those of you who decide to take Nord`s shares in exchange, you need to be aware that if legal action is taken against Nord, your investment may suffer because of such a suit.

This is a very disappointing result for us after years of fighting for the fair value of HRG. HRG is a company with strong assets and an impressive balance sheet. It is a shame to see it diluted by combining it with a far less impressive company. Having said this, I do believe that our collective resistance over the years has resulted in Nord paying almost 8 times the original intended price of $.18/share and their share exchange offer of 58% of Nord’s value for 100% of HRG exceeds our original goal of 50%.

Whichever choice you make with your HRG shares, I wish you all the best with your future investments. I have appreciated your support over the last 3.5 years and please feel free to keep in touch.

Chris Charlwood

HRG shareholder



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