Nordgold/High River -- summary under Direct Target Acquisition

Offer

Offer by Nordgold, which already holds approximately 75.1% of the common shares of High River, for the remaining common shares of High River on the basis of 0.285 of a global depositary receipt of Nordgold (a "GDR"), or $1.40 of cash, for each High River common share. This represents a 17.2% premium based on the respective closing prices, and values High River at $1.2 billion (or approximately 58% of the fully consolidated Nordgold after acquiring the balance of High River). The GDRs trade on the LSE, and the ordinary shares of Nordgold are not listed on any stock exchange. High River shareholders who elect for the GDRs will be deemed to have elected to receive Nordgold's Regulation S GDRs rather than its Rule 144A GDRs, except where it is considered reasonably necessary by Nordgold or the GDR depositary (including in response to a High River shareholder request) to issue Rule 144A GDRs in order to comply with applicable laws. There is a lock-up agreement for approximately 29% of the High River shares not already owned by Nordgold.

Nordgold intends all High River shares acquired under the offer to be voted in favour of any proposed subsequent acquisition transaction and, where permitted by MI 61-101, counted as part of any required minority approval.

High River

High River is governed by Yukon law, is listed on the TSX and derives substantially all its value from mining and exploration properties in Russia and Burkina Faso. It holds its foreign subsidiaries through a Caymans holding company.

Nordgold

It is a Netherlands company. Its GDRs listed on the LSE represent approximately 10.6% of its share capital.

Canadian tax treatment

High River share dispositions. Dispositions under the offer will occur on a taxable basis. If under a subsequent acquisition transaction, High River shares were exchanged under of plan of arrangement for cash or Nordgold GDRs, the tax consequences generally would be the same.

GDRs

Dividends on the GDRs, which would be subject to Dutch withholding tax, will be taxed as foreign dividends. Counsel is of the view that the value of the Novagold GDRs should not be regarded as being derived primarily from portfolio investments in properties described in the offshore investment fund rules - and, in any event, for s. 94.1 to apply, it also would be necessary for the "main reason" test to be satisfied.

Non-residents

No view is expressed as to whether the High River shares are taxable Canadian property (although they presumably are not).