Interim Results Announcement for H1 2019

03 September 2019

View the full results announcement (PDF)

Highland Gold Mining Limited ("Highland Gold" or the "Company" or "Group", AIM: HGM) today reports its unaudited financial results and production figures for the half year ended 30 June 2019 ("H1 2019").



IFRS, US$000 (unless otherwise stated)

H1 2019

H1 2018

Gold sold (gold and gold eq. oz)



Total Cash Costs (US$/oz)*



All-in Sustaining Costs (US$/oz)*






Operating profit



Net profit






EBITDA margin (%)*



Earnings per share (US$)



Net cash inflow from operations



Capital expenditure



Net debt position*



 * Definitions for non-IFRS terms are provided in the footnotes below.




  • First half revenue rose 18.9% year-on-year to US$174.7 million, reflecting the contribution from the newly-acquired Valunisty mine and increased sales volume at MNV.
  • H1 2019 EBITDA was US$86.5 million, an increase of 21.2% from H1 2018, while EBITDA margin was stable at 50% versus 49% last year.
  • All-in sustaining costs (AISC) per ounce rose to US$778, from US$697 in the first half of last year, due to the inclusion of Valunisty and higher maintenance capital expenditure for purchases of new equipment.
  • The net debt to EBITDA ratio decreased to 1.29x as of 30 June 2019 versus 1.38x as of 31 December 2018, when net debt was US$211.4 million. 


  • Highland Gold produced a total of 142,254 oz of gold and gold equivalent in H1 2019, an increase of 10.3% from 128,921 oz in H1 2018.
  • Production at Mnogovershinnoye (MNV) in H1 2019 rose by 23.3% over the same period last year, and a new JORC-compliant reserve report extended the life of mine by seven years to 2029.
  • Belaya Gora and Novoshirokinskoye (Novo) saw year-on-year declines in output due to operational issues and lower grades, respectively, although grades at Novo improved in the second quarter.
  • Construction work at Kekura and an exploration drilling programme at Klen continued throughout H1 2019, as both projects were officially granted residency in the Chukotka special economic zone.
  • The Company affirms its forecast for total 2019 production of 290,000-300,000 oz of gold and gold equivalent.

Speaking on the Company's first half performance, Highland Gold CEO Denis Alexandrov said:

"Highland Gold achieved solid half-year financial performance, buoyed by stable gold prices and a weaker rouble, despite higher maintenance capex for replacing older equipment due to the extension of life of mine at our key production assets, and higher costs at our newest mine, Valunisty, which we are now focusing on bringing in line with our other operating assets.

From an operational standpoint, the Company met its internal targets and increased production over the first half of last year with the aid of Valunisty and a particularly strong performance from MNV. Novo made progress in rectifying some of the issues with metals grades that constrained its output over the past twelve months. Belaya Gora had a difficult half-year, but still managed to minimize the impact of its operational challenges on total production.

We expect higher production levels and stronger operating cash flow in the second half, as well as continued progress on construction at our key development project, Kekura, and on our ongoing projects to improve operations at each of our existing mines."


  • Interim Dividend of £0.05 per share approved by the Board of Directors
  • In August, to take advantage of falling interest rates, the Company restructured its existing debt portfolio with US$103 million in longer-term credit agreements with Rosbank, Sberbank and Alfa Bank, thereby increasing the average loan tenor from 18.1 to 36.6 months and lowering the average effective interest rate from 4.19% to 4.09%.
  • On 16 August 2019, Highland Gold’s Senior Independent Director Terry Robinson passed away after a brief illness. Executive Chairman Eugene Shvidler said: "On behalf of the Board and everyone at Highland Gold, I would like to offer our deepest, sincerest condolences to Terry's wife and family. Terry was a true gentleman in every sense of the word, and his experience, judgment, incomparable attention to detail and, most of all, his friendship will be sorely missed." The Company will consider the appointment of a new independent director in due course.


The Company will hold a simultaneous webcast and conference call to discuss the results, hosted by CEO Denis Alexandrov, on 03 September 2019 at 10:00 UK time (12:00 Moscow).

This event will be streamed online. To listen and view the slide presentation in real time, it is recommended to access it via computer. The link for online registration is:

To register to participate by telephone and to receive local dial-in numbers, please follow this link:


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

*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.

*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.

*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.

*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.