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By John Helmer, Moscow

They said it could never be done, but Alexei Mordashov has done it!

Having failed to buy out the 27% Canadian minority shareholders in High River Gold (HRG), who refuse to sell at his price, Mordashov, owner of 73% of the shares, has hidden the annual general meeting where noone but he could find it – and where no shareholder could ask awkward questions. This first-ever hidden AGM has been arranged without audio or video or even telephone connection to the outside world, so that not even the investment institutions of London, who in February rejected Mordashov’s attempted initial public offering of Nord Gold shares, could listen in.

Did you say Morashov’s gone to the North Pole in a Russian submarine, surfaced, clambered over the side, and mushed through the snow to the Pole, as in the picture? Well almost.

On June 30, HRG – the cornerstone of Mordashov’s Nord Gold holding, the biggest source of its gold output, and the most valuable of its assets – held its AGM at Whitehorse, Yukon territory. Apart from Mordashov employees, noone attended. The meeting lasted from 11 o’clock in the morning to 11:15 a.m.– 15 minutes. If HRG has compiled an official record of the proceedings, that appears to have been put on board a dogsled which is awaiting the snow season for delivery to the Toronto Stock Exchange (TSX).

Asked to say why the shareholder meeting was held so far from HRG’s Canadian shareholders, Mordashov’s spokesman in Moscow, Sergei Loktionov, asked for 24 hours to consult his boss, and then refused to reply.

Whitehorse, in the Yukon Territory, is in the Canadian Arctic. The distance to Toronto, where HRG is listed, is about 5,500 kilometres. But there are no direct flights, and if a shareholder wanted to get to Whitehorse from Toronto, he would probably fly to Vancouver, then take another plane north, making a second connection, before landing at Whitehorse. Airfare – about C$2,800, or the equivalent of almost 2,400 shares in HRG. Add hotel charges, taxi, and warm-up, and you could buy 3,500 HRG shares

It’s one thing to explain why HRG moved its corporate registration to the Yukon; quite another to say why the AGM was held there last week. A number of Canadian mining companies have re-registered in the Yukon, because its regulatory supervision is even looser than the Ontario rules for the TSX. HRG announced that it was intending to re-register in the Yukon on January 24, but said nothing about the move since then. When the first-quarter financial results were issued on June 14, HRG listed a telephone number in Moscow for contact. Two corporate office addresses in Canada are on the company website, both of them in Toronto.

HRG hasn’t opened an office in Whitehorse. The AGM was called at 204 Lambert St Whitehorse, but that’s the address of a law firm.

Yukon-registered companies are under no obligation, regulatory or other, to convene shareholder meetings in Whitehorse. Last week, one employee of Mordashov’s, a lawyer representing the renter of the wall to which the HRG nameplate has been nailed, and a notetaker were present. .

Local sources confirm that the meeting-room was equipped for telephone, audio and video-conferencing, so that HRG’s shareholders could participate, along with the Nord Gold bosses. Mordashov vetoed the request when Canadian shareholders requested it. A source who has attended HRG meetings in Toronto in the past says this year’s hidden AGM is unprecedented. “I can tell you that in the past number of years a minimum of 75 persons would be at the AGM, and in years past the AGM was conference call enabled.”

Even the notice of the Whitehorse location was delayed until June 8, and then sent to shareholders by the regular mail, which has been hit by delays in Canada due to a postal workers’ strike. Before June 8, Konstantin Sobolevskiy, HRG’s chief executive, had been telling shareholders the AGM would be held as usual in Toronto. After the order to move the meeting to Whitehorse had been issued, Sobolevskiy told a Canadian shareholder: “We believe a conference call is not appropriate since it doesn’t permit full participation because it is only audio, and unfortunately, given timing, technical and logistical constraints, it is not possible to arrange for a webcast.”

What could be better than less than full participation? No participation at all.

HRG has not been shy about revealing the good news from the company’s mining operations and gold sales this year to date. The first-quarter report was issued on June 14, revealing a 23% jump in b ottom-line net income compared to the first quarter of 2010. The share price then was between 60 and 80 Canadian cents.

Still, the steady improvement has been nowhere near as potent in sustaining market demand for HRG shares as the news this past January that Mordashov was taking the holding company, Nord Gold, to the London Stock Exchange. However, investor sentiment then was so negative towards Mordashov, the IPO failed, and the listing attempt withdrawn.

This six-month chart of the HRG share price shows that HRG’s steady increase in worth to Nord Gold isn’t turning into a recovery of the share price to its January, pre-IPO level.

Six-month share price trajectory for HRG

Since the snow started to melt, there has been speculation in the Canadian market that Mordashov would try again to buy out the HRG minorities before taking another shot at the Nord Hold IPO. Hiding the AGM appears to be the first move he has thought of in that direction.

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