High River Gold Mines Ltd HRIVF

RE: RE: RE: silver is getting hot

[ngobe]

High River and Buryatzoloto will attempt to preserve the license and get maximum value out of bankruptcy procedures.

It seems absurd to think HRG would act against its interests.  The target and culprit is "Polar Silver Resources" and their filing of bankruptcy is the result of their unwillingness/inability to pay their dues.  Furthermore, HRG as the victim already acknowledged by the courts seems to be in driver's seat.  As such, it would seem more logical that the courts would possibly dissolve Prognoz and then reissue HRG's 50% share of the license in a separate entity, or even more likely increase HRG's share proportional to their $20 million owed (upto 100%).  They sure have enough cash to do this for such a great project.

HRG is really Severstal (as majority owners) and these guys are well established and well connected.  I also don't think Severstal would do anything to undermine HRG as that would mean undermining themselves.  Furthermore, Russia is not as unruly as some may want to pretend specially towards big established domestic companies like Severstal.  Russian companies garner fair valuations in reputable international exchanges (such as ADR's in US e.g., Polyus Gold, Vimpel) and are in fact sought after as part of the BRIC growth story. 

I can see Severstal proceeding with their IPO as Severstal Gold including their share of HRG and CRU.  I do not think their IPO will garner much attention if they have poor performing assets.  So it would be in their interest to have these companies do well.  I also think they would increase their share of these companies via crosses when the big investors (i.e., institutional etc.) want to liquidate their position and also some smaller buying in the open market when they feel the company is undervalued but I do not think they will sabbatoge their majority interest.  If they wanted to sabbatoge this company to buy it on the cheap they had better occasions in the last 2 years and with the gold price lower.  As for not doing promotion I do not think it is their style.  In fact I do not know any Russian company that is "promotional".