Nord Gold's Offer

ccnm




TORONTO, ONTARIO--(Marketwire - Oct. 31, 2012) - High River Gold Mines Ltd. (TSX:HRG) ("High River" or the "Company") announced today that is has mailed to its shareholders a Directors' Circular as required by applicable securities laws in response to the offer by Nord Gold N.V. ("Nordgold") to acquire the outstanding common shares ("Shares") of the Company not already owned by Nordgold (the "Offer"). Under the terms of the Offer, eligible High River shareholders who tender their Shares to the Offer can elect to receive either: (i) 0.285 Nordgold global depositary receipts for each Share tendered (the "GDR Offer"); or (ii) C$1.40 in cash for each Share tendered (the "Cash Alternative"). A copy of the Directors' Circular is available online at Sedar


The board of directors of High River (the "Board of Directors") (with those directors who are nominees of Nordgold abstaining), upon the unanimous recommendation of its Special Committee, unanimously recommends that High River shareholders accept the Offer and tender their Shares to the Offer. The Offer is open for acceptance until 12:01a.m., (Toronto time) on November 27, 2012, unless the Offer is extended or withdrawn. The Board of Directors recommends that shareholders accept the Offer for a number of reasons, including:


Fairness Opinion. Paradigm Capital Inc. ("Paradigm Capital") provided a fairness opinion to the Special Committee on October 26, 2012, which concludes that, subject to the analyses, assumptions, qualifications and limitations described therein and as of the date thereof, the consideration offered under the Offer is fair, from a financial point of view, to minority shareholders.



Valuation. Paradigm Capital provided a valuation to the Special Committee which concludes that, subject to the analyses, assumptions, qualifications and limitations discussed therein, as of October 16, 2012, the fair market value of High River is in the range of $1.33 to $1.80 per share. The Offer is within the fair market value range set out in the valuation.



The form of consideration under the Offer provides immediate value and liquidity. The form of consideration under the Offer provides immediate value and liquidity. Minority shareholders who elect to receive the Cash Alternative for their Shares will immediately realize a fair value for their investment and the payment in cash provides certainty of value for their Shares. Minority shareholders who elect to receive the GDR Offer will obtain an interest in Nordgold, a gold producer listed on the London Stock Exchange.



Continued participation in the assets of Nordgold. Minority shareholders who elect to receive the GDR Offer will continue to participate in any increase in value of Nordgold's projects (including the Company's projects) and the increase in value of the current assets of Nordgold. Nordgold holds a diverse portfolio of assets as it currently operates eight producing mines, two development projects and five advanced exploration projects across four countries. The Board of Directors believes that Nordgold's assets have a longer expected life than the asset portfolio High River shareholders currently have exposure to, providing an opportunity for minority shareholders to benefit from improved medium-to-long term prospects.



Premium for minority shareholders. The GDR Offer represents a 17.2% premium based on Nordgold's and High River's respective closing share prices on July 17, 2012, the last trading day before the announcement of Nordgold's intention to make an offer, a 20.2% premium based on Nordgold's and High River's respective one month average share prices for the period ended July 17, 2012, and a 30.6% premium based on Nordgold's and High River's respective three month average share prices for the period ended July 17, 2012.



Several minority shareholders will be accepting the Offer. Nordgold has executed lock-up agreements with a number of substantial minority shareholders, including three of the largest shareholders, as well as with former members of High River's executive management, under which they have all agreed to tender their Shares and accept the GDR Offer. The aggregate number of Shares subject to the lock-ups is 59,900,206, which represents approximately 29% of the Shares not already owned by Nordgold and its affiliates.



For the foregoing reasons, and the reasons set out in full in the Directors' Circular, the Board of Directors (with those directors who are nominees of Nordgold abstaining) unanimously recommends that High River shareholders accept the Offer and tender their Shares to the Offer. High River advises shareholders not to take any action until they have read the Directors' Circular in its entirety and to defer making any determination with respect to the Offer until reading the Directors' Circular.



About High River



High River is an unhedged gold company with interests in producing mines, development and advanced exploration projects in Russia and Burkina Faso. Two underground mines, Zun-Holba and Irokinda, are situated in the Lake Baikal region of Russia. Two open pit gold mines, Berezitovy in Russia and Taparko-Bouroum in Burkina Faso, are also in production. Finally, High River has a 90% interest in a development project, the Bissa gold project in Burkina Faso, and a 50% interest in an advanced exploration project with NI 43-101 compliant resource estimates, the Prognoz silver project in Russia.



FORWARD-LOOKING INFORMATION



This release contains forward-looking statements. Wherever possible, words such as "intends", "expects", "scheduled", "estimates", "anticipates", "believes", and similar expressions or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, have been used to identify these forward-looking statements. Although the forward-looking statements contained in this release reflect management's current beliefs based upon information currently available to management and based upon what management believes to be reasonable assumptions, High River cannot be certain that actual results will be consistent with these forward-looking statements. A number of factors could cause events and achievements to differ materially from the results expressed or implied in the forward-looking statements. These factors should be considered carefully and prospective investors should not place undue reliance on the forward-looking statements. Forward-looking statements necessarily involve significant known and unknown risks, assumptions and uncertainties that may cause High River's actual results, events, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements. Although High River has attempted to identify important risks and factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors and risks that cause actions, events or results not to be anticipated, estimated or intended, including those risk factors discussed in the Company's 2011 Annual Information Form. There can be no assurance that the forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, prospective investors should not place undue reliance on forward-looking statements. Any forward-looking statements are made as of the date of this release, and High River assumes no obligation to update or revise them to reflect new events or circumstances, unless otherwise required by law.




FOR FURTHER INFORMATION PLEASE CONTACT:







Contact Information:
High River Gold Mines Ltd.
Yury Lopukhin
CEO
011 7 495 981 0910 ext. 6821
info@hrg.ca
http://www.hrg.ca/">www.hrg.ca