Full Year 2018 Audited Results


View the full results announcement (PDF)


Highland Gold Mining Limited ("Highland Gold" or the "Company", AIM: HGM) is pleased to present its final audited results for the year ended 31 December 2018.


US$000 (unless stated)



Production (gold and gold eq. oz)



All-in sustaining costs (US$/oz)[1]



Total cash costs (US$/oz)[2]






Operating profit






Net profit



Earnings per share (US$)



Net cash flow from operations



Capital expenditure



Net debt[4]



  • Total 2018 production of 269,500 oz of gold and gold equivalent, a slight decrease of 1% from 272,274 oz in 2017 and within the guidance range of 265-275k oz
  • Total Cash Costs held steady at US$ 506 per oz (2017: US$ 507), while All-In Sustaining Costs rose slightly to US$ 682 (2017: US$ 664) due to higher G&A and supporting capital expenditure
  • 2018 EBITDA edged down by 1% to US$ 153.1 million (2017: US$ 155.3 million), in line with the change in production, while EBITDA margin for the year was stable at 49%, the same as in 2017
  • Cash generation remained strong with net cash flow from operations rising 4% to US$ 136.2 million (2017: US$ 131.0 million)
  • Two interim dividends of £0.06 and £0.05 per share, respectively, paid with respect to 2018 for a total payout to date of US$ 46 million (2017: US$ 46 million).


  • A strong operational year at MNV was coupled with the completion of a new JORC-compliant reserve audit that extended the project's life of mine to 2029
  • Belaya Gora output rose driven by better recoveries, and a pre-feasibility study was published regarding upgrades to the processing plant and the processing of ore from the nearby Blagodatnoye deposit
  • Work on the Novo 1.3 mtpa expansion continued, but output at the mine declined due to lower grades and recoveries
  • The acquisition of the Valunisty mine and related properties closed in December 2018
  • Construction of the Kekura project commenced following the completion of a definitive feasibility study


  • Continue to advance projects designed to improve operations at existing mines – near-mine exploration at MNV, mine and mill expansion at Novo, and processing plant upgrades at Belaya Gora
  • Ramp-up construction at Kekura and begin initial stripping and mining at the site
  • Integrate the recently-acquired Valunisty mine and related operations and begin studies on potential upgrades to its operations
  • Roll-out new programmes for health & safety, operational efficiency and continuous improvement across each of the Company's operating units
  • Total production of gold and gold equivalent in 2019 is expected to be in the range of 290,000-300,000 oz


  • Third interim dividend of £0.024 per share approved by the Board of Directors
  • Kekura and Klen were included on the list of companies which can be granted ‘residency’ status within the Chukotka Advanced Special Economic Zone (ASEZ), a programme offering beneficial tax incentives
  • The Annual General meeting will be held on 23 May 2019


The Company will hold a simultaneous webcast and conference call to discuss the results, hosted by CEO Denis Alexandrov, on 12 April 2018 at 10:00 UK time (12:00 Moscow).

This event will be streamed online and it is recommended that you listen via your computer. The link for online registration is: https://digital.vevent.com/index.jsp?eid=7846&seid=30

To register to participate by telephone and to receive local dial-in numbers, please follow this link: http://emea.directeventreg.com/registration/9483166

Commenting on the 2018 results, Executive Chairman Eugene Shvidler said:

Highland Gold is committed to growth, both organic and acquisitive, and I am pleased to report that 2018 and the early months of the current financial year have witnessed significant developments on that front. The Company’s recent corporate highlights, namely the purchase of the Valunisty gold mine and the seven-year ‘Life of Mine’ extension of MNV, as well as the ramp-up of construction at Kekura, reflect key aspects of our overall strategy to capitalise on Highland’s valuable and substantial asset base.

Looking to the future, we are confident that the ongoing implementation of our strategy, together with the maintenance of rigorous cost disciplines and the roll-out of a new programme for operational efficiency and continuous improvement, will continue to serve shareholders well in the ensuing years.



Highland Gold Mining Ltd.

John Mann, Head of Communications

+ 7 495 424 95 21

Duncan Baxter, Non-Executive Director

+ 44 (0) 1534 814 202

Numis Securities Limited

(Nominated Adviser and Joint Broker)

John Prior, James Black, Paul Gillam

+44 (0) 207 260 1000

BMO Capital Markets Limited

(Joint Broker)

Jeffrey Couch, Tom Rider, Pascal Lussier Duquette

+44 (0) 207 236 1010

Peat & Co

(Joint Broker)

Charlie Peat

+44 (0) 207 104 2334


[1] In line with guidance issued by the World Gold Council, the formula used to define the all-in sustaining cash costs measurement commences with total cash costs per ounce sold and then adds sustaining capital expenditures, corporate general and administrative costs, mine site exploration and evaluation costs and environmental rehabilitation costs. This data seeks to represent the total costs of producing gold from current operations and therefore it does not include capital expenditures attributable to projects or mine expansions, exploration and evaluation costs attributable to growth projects, income tax payments, interest costs or dividend payments.

[2]  Total cash costs include mine site operating costs such as mining, processing, administration, royalties and production taxes but are exclusive of depreciation, depletion and amortisation, capital and exploration costs. Total cash costs are then divided by ounces sold to arrive at the total cash costs of sales.

[3] EBITDA is defined as operating profit/(loss) excluding depreciation and amortisation, impairment losses, movement in ore stockpiles obsolescence provision, movement in raw materials and consumables obsolescence provision, result of disposal of a non-core entity and gain on settlement of contingent consideration.

[4] Net debt is defined as cash and cash equivalent less interest-bearing loans and borrowings and liabilities under finance lease. The figure does not include debt, lease and cash assumed as part of the Valunisty acquisition. Please refer to the Financial Review for further details.

The data described in notes 1, 2 and 4 provide additional information and are non-GAAP measures.