High River Gold Mines Ltd HRIVF

Update on HRG from a "friend"

[discern]

Royal Gold our very good friend (because they are making a killing off of HRG) released their annual report.  Here is the information that is pertinent to HRG


Taparko -- At the current gold price, the Company expects that the $35 million cap on the 15% (TB-GSR1) royalty could be met during our first fiscal quarter of 2011. As of June 30, 2010, Royal Gold has recognized approximately $30.6 million in royalty revenue associated with the TB-GSR1 royalty and a total of $50.0 million in aggregate from the Taparko royalties. When the cap is reached, both the TB-GSR1 royalty and the sliding-scale (TB-GSR2) royalty (currently paying at a rate of 10%) will cease and a 2.0% (TB-GSR3) perpetual royalty, applicable to gold production from defined portions of the Taparko-Bouroum project area, will take effect. 
In other words, in 2011, the profit of the Taparko-Bouroum (Somita) mine will increase by 25% or roughly at 120M oz/year * 1200/oz * 0.25 = an additional $36 million in 2011 than in 2010. (
.06/sh)
Secondly by combing through the number we can determine approximately the production of Taparko-Bouroum in the 2Q.
Royal Gold said production was 117.5Moz from July 1, 2009 to june 30, 2010.
In 2009 HRG reported production of 99536 (total for 2009)
Production for 1Q (2009) was  22408 and 2Q (2009) was 20139
Therefore, production for 2H (2009) was 99536 - 22408 - 20139 = 56989oz
Production for 1Q 2010 was reported as 30426
Therefore, 2Q production at Taparko-Bouroum was 117.5Moz - 56989 - 30426 = ~30100oz
These numbers may change slightly because I used total oz produced as opposed to attributable oz.  Production would increase if the attributable oz figure was used by up to 5000oz.

[production05]

The original amount borrowed from Royal Gold was US$35 million.  One would think that all of our pledged security would be released automatically over the next quarter or two (once the remaining few million gets paid), regardless of status of completion tests and everything related this neverending tast.  It`s already unreal that Royal Gold still holds us hostage like

[cjsell]

A really great post, spot on!!!CJ

[prouditalian]

looks like one of the worst deals in history is almost done. Shows you how incompetent Mosher and Whalen were!Anyhow, if I were Royal Gold, I would do the exact same thing. They obviously follow HRG closely and have followed our battle, and how Severstal tried to screw us many times. They know they cannot be trusted so they are taking a sound business decision.Looking fwd to the earnings which we

[bart_dc]

I can't figure out what the rationale of Severstahl is behind the no-promotion idea.If you own 70% of the outstanding shares and are not interested in buying out the minorities +if they wan't to float 20-25% of that participation via their Severstahl Gold unit IPOthen WHY ON EARTH would they not be interested in promoting HRG?They can't sell HRG via their IPO at a valuation of 1.50-2

[prouditalian]

its Severstal Bart, not Severstahl!Your thinking is logical, if you believe that they dont still want to buy out minorities cheap and are not doing so everyday in the market. I think they have it pinned down and are buying shares at these levels. Once they promote, its over for buying cheap shares. Not 1 Canadian broker covers HRG, and that is due to management not wanting coverage imho. We shall

[bart_dc]

I live next to Germany so I am allowed to use Stahl (steel in German)you read both versions on the net.I agree with your post and wouldn't mind either scenario.Although I think they are not smart because of the window of opportunity which is closing.Once they IPO they loose 20-25% of their holdings at these low levels.One way or another, share price needs to appreciate BEFORE IPO!If it's

[hrgagogo]

We will soon find out whether HRG management will start to promote the company based upon the tone of the financials.  I believe how Q2 is presented will be the key indicator as to whether they want to see the share price appreciate or keep a lid on it.If they want to keep a lid on it, what is their motive?  It is not as if they are accummulating a vast amount of shares at this cheap pps

[katchum]

Nice calculation, only 10% off. Taparko bouroum did 27000 ounces.Yesterday I especially bought 8000 dollars more of HRG. Looks like the organic growth is continuing very well.