Barrick Subscription in Highland Gold
Highland Gold Mining Limited (“Highland Gold”) announces that it has today signed a subscription agreement with Barrick Gold Corporation (“Barrick”) of Canada whereby Barrick will subscribe in cash for 11,377,937 new ordinary shares in Highland Gold at a price of 230 pence per new ordinary share. The subscription is conditional only on admission of the shares to trading on AIM. Following completion of the share subscription Barrick’s shareholding, which is currently 13.7%, will increase to 20%.
The proceeds of approximately US$50 million will be used to reduce short term debt and to help fund Highland Gold’s capital expenditure and development programme. As part of these arrangements Barrick has also agreed to provide Highland Gold with operational and financial management assistance at Highland Gold’s existing operations, in addition to its commitment to joint exploration and its participation in Taseevskoye with Highland Gold.
On 18 April 2005, Alex Davidson joined the Board of Highland Gold as Barrick’s nominated director under the terms of the parties’ existing arrangements. The Board of Highland Gold welcomes this, together with their increased investment in and closer working relationship with Highland Gold, as a demonstration of Barrick’s commitment to Highland Gold and is consistent with Barrick’s long term strategic commitment to Russia.
Following completion of the feasibility study at Mayskoye, which is due to be delivered shortly, Highland Gold and Barrick will discuss possible participation arrangements in connection with the development of the deposit.
Application has been made to the London Stock Exchange for the new shares to be admitted to trading on the AIM market and admission is expected to be effective on 11 May 2005. As Barrick’s shareholding is in excess of 10% Barrick is treated as a related party under the AIM rules. The Directors of Highland Gold consider, having consulted with JPMorgan Cazenove, the Nominated Adviser, that the terms of the subscription by Barrick are fair and reasonable in so far as shareholders in Highland Gold are concerned.
|Enquiries:||+44 (0) 20 7404 5959|
James Cross, Chairman
Dmitry Korobov, Managing Director
|Denis Alexandrov, Finance Director|
|Dmitry Yakushkin, Director of Communications|
|Grant Sinitsin, Director of Investor Relations|
|Brunswick||Andrew Garfield, Mark Antelme|
1. There are no details that require to be disclosed under Schedule 2 para f (iii) to (viii) of the AIM Rules. Highland Gold Mining Limited trades under the ticker, HGM.L