High River Gold (HRG.TO) said on Friday it is trying to secure additional funds to meet its financial obligations as cash flow at the Canadian junior miner has been weakened by operational problems.

The cash crunch comes after Severstal Resources (CHMF.MM), Russia's largest steelmaker, spent $45 million to take a 50.1 percent controlling stake in the miner in late November.

As worries about the troubled company's future intensified, High River shares plunged as much as 24 percent. In early afternoon, the stock was down 14 percent at 12.5 Canadian cents on the Toronto Stock Exchange.

High River, which operates mines in Russia and the West African country of Burkina Faso, said it had about $142 million in debt and about C$11 million in cash as of December 31. It hopes to finalize arrangements for additional debt or equity financing by January 31.

Toronto-based High River also said it is in talks to obtain a waiver from debt covenants it is breaching on its $35 million loan with Royal Gold Inc (RGLD.O).

Payments are up to date with Nomos Bank on current and long-term debt, it said, and a $27 million loan from Standard Bank recently got a corporate guarantee from Severstal.

High River said it recently told trade creditors for its Somita subsidiary in Burkina Faso it would slow payments for accounts receivable for a brief period. It plans to pay suppliers for current purchases of goods and services.

The chief operating officer and two vice-presidents have left the company, with COO duties now shared by the chief executive and mine managers until a replacement is found.

High River said it plans a seven- to 10-day shutdown at its Taparko mill in Burkina Faso in mid-January, to attempt repair of a drive train vibration problem that has hurt production.

Production at its Berezitovy mill in Russia was also hurt recently due to overly coarse grind and fragments of old timbers entering the processing plant. Staff are planning fixes.

The Zun-Holba and Irokinda underground gold mines in Russia are operating to plan, poised to meet a 2008 production target of 145,000 ounces, it said.

High River has been hurt by slumping commodity prices and tight credit markets, which have made it difficult for juniors to secure funding. Some analysts predict that 50 to 75 percent of the world's 2,000-plus junior miners will be culled in the market downturn.

In late October, High River warned that its future could be in jeopardy due to debt problems, one month after forming a committee to study alternatives, such as selling the company.

($1=$1.21 Canadian)

(Reporting by Susan Taylor; editing by Rob Wilson)

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