Full Year 2019 Audited Results

15 April 2020

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 2019.



US$000 (unless stated)



Production (gold and gold eq. oz)



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



Total cash costs (US$/oz)1






Operating profit






Net profit



Earnings per share (US$)



Net cash flow from operations



Capital expenditure



Net debt1




  • Total gold and gold equivalent production in 2019 was 300,704 oz, an increase of 12% from 269,500 oz produced in 2018 and slightly above the guidance range of 290,000-300,000 oz
  • EBITDA improved by 34% to US$205.1 million, with an EBITDA margin of 52% (2018: 49%)
  • Total cash costs (TCC) were 10% higher at US$556 per oz, mainly due to the acquisition of Valunisty and its higher-cost production (ТСС US$786 per oz), but were still well below the industry average
  • All-in sustaining costs (AISC) rose by 16% to US$791 per oz due to the impairment of poor ore at Belaya Gora and Valunisty, increased supporting capex at MNV, Belaya Gora and Novo, and higher TCC
  • Cash generation remained strong with net cash flow from operations rising 2% to US$138.4 million
  • Two interim dividends of £0.05 per share each paid in respect of 2019 for a total payout to date of US$ 46 million



  • MNV – Outperformed management expectations, with production up 10% on the back of improved grades and higher processing volume
  • Novo – Exceeded production targets for 2019, although output was 5% lower year-on-year due to expected lower grades and changes in the balance of prices for metals in its concentrates
  • Belaya Gora – Despite a strong Q4, production decreased by 9% due to lower grades and downtime at the processing plant earlier in the year
  • Valunisty – Acquired at year-end 2018, Valunisty added 11% (30k oz) to Highland Gold’s production in 2019
  • Kekura - Construction gathered pace, with several key infrastructure facilities at or near completion, while initial stripping and mining commenced in Q4



  • Maintain production in the range of 290-300k oz of gold and gold equivalent
  • Complete improvement projects at Novo (1.3 Mtpa expansion) and Belaya Gora (processing plant upgrade)
  • Continue construction work at Kekura in preparation for commercial production in 2023
  • Support and expand ongoing efforts to improve workplace safety and employee wellbeing



  • The Board of Directors approved a third interim dividend in respect of 2019 in the amount of £0.035 per share, expressing confidence in the Company’s strong balance sheet and liquidity position based on existing open credit lines
  • The Annual General Meeting will be held on 30 July 2020



The Company will hold a simultaneous webcast and conference call to discuss the results, hosted by CEO Denis Alexandrov, on 15 April 2020 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 that you access it via computer. The link for online registration is:


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



Commenting on the 2019 results, Executive Chairman Eugene Shvidler said:

I am pleased to report that the ongoing pursuit of our stated strategy of balancing a steady rate of gold production with the advancement of our major development projects was reflected in a highly satisfactory year’s trading during 2019. The Company achieved record production, meeting its production guidance once again, and remains among the lowest-cost gold producers. These factors, together with favourable gold prices, helped to deliver a strong financial performance and to fund continued returns to our shareholders in the form of dividends.

The Company faces a busy year ahead in 2020 as we move to complete major improvement projects at Novo and Belaya Gora, and to maintain the pace of construction at our premier development project, Kekura. While capital expenditure will rise substantially, we are confident of our ability to sustain both growth and dividends based on our strong cash generation, stable balance sheet with long-term and low-cost debt, and solid liquidity position with roughly $340 million of untapped open credit lines.

As we move forward in 2020, the COVID-19 pandemic is clearly an unpredictable factor that all businesses must take into account. At Highland Gold, we are taking the utmost precautions to protect the health of our employees and the small, remote communities in which we operate. Fortunately, we have not experienced any significant disruptions to our production or sales to date, and our mines continue to operate albeit with measures designed to protect our teams from the risks associated with this pandemic. We have already published one COVID-19 operations update in March 2020, and will continue to do so should any material issues arise.



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)

Tom Rider, Pascal Lussier Duquette, Neil Elliot

+44 (0) 207 236 1010

Peat & Co

(Joint Broker)

Charlie Peat

+44 (0) 207 104 2334


[1] The financial performance reported by the Company contains certain Alternative Performance Measures (APMs) disclosed to compliment measures that are defined or specified under International Financial Reporting Standards (IFRS). For more information on the definition and calculation of non-IFRS APMs used in this report, including Earnings before interest, tax, depreciation and amortisation (EBITDA), Total cash costs, All-in sustaining costs and Net debt, please see the “Financial Review” section.