Interim Results Announcement for H1 2020

01 September 2020

View the full results announcement (PDF)

Highland Gold Mining Limited ("Highland Gold" or the "Company", AIM: HGM) today reports its unaudited financial results and production figures for the six months ended 30 June 2020 ("H1 2020").


IFRS, US$000 (unless otherwise stated)

H1 2020

H1 2019

Production (gold and gold eq. oz)



Total Cash Costs (US$/oz)*



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









EBITDA margin (%)*



Operating profit



Net profit



Earnings per share (US$)



Net cash inflow from operations



Capital expenditure



Net debt*



Net debt/EBITDA ratio*



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

Highland Gold’s condensed unaudited interim consolidated financial statements for H1 2020 are set out later in this report.



  • H1 2020 Revenue rose by 11% year-on-year to US$194.5 million, despite lower sales volumes, due to higher realised prices for gold and gold equivalent.
  • EBITDA was also 11% higher at US$96.4 million as increased revenue more than offset higher costs and the EBITDA margin remained stable at 50%.
  • All-in sustaining costs (AISC) per ounce rose to US$966 per ounce due to lower production volumes, higher energy costs, and expenses for addressing the COVID-19 pandemic.
  • Net debt rose to $280 million as the Company drew down additional funds from open credit lines to build up reserves in light of the pandemic.
  • COVID-related care and maintenance costs in H1 2020 amounted to US$2.1 million, including wages, materials and supplies for additional health and safety procedures.
  • On 02 June 2020, the Company agreed to sell its wholly-owned subsidiary SVGGK LLC, holder of the Kayenmivaam (“Kayen”) license, to an unrelated party for US$15 million plus a 2% royalty on gold produced and sold from the deposit in excess of 500,000 ounces for a period of 30 years.


  • Highland Gold’s four operating mines produced a total of 124,294 oz of gold and gold equivalent in H1 2020, in-line with internal production targets (H1 2019: 142,254 oz).
  • The Company affirms its guidance for total production of 290,000-300,000 oz of gold and gold equivalent in 2020.
  • Production, sales and supply chain were not materially affected by the COVID-19 pandemic, as outlined in regular pandemic response statements issued by the Company during H1 2020.
  • Mnogovershinnoye (MNV) and Valunisty increased waste stripping by 101% and 35%, respectively, in H1 2020 in preparation to access higher-grade open pit reserves in the second half of the year.
  • Work on the capacity expansion at Novoshirokinskoye (Novo) and the processing plant upgrade at Belaya Gora advanced in H1 2020, with both projects on track for completion this year.
  • Kekura construction also continued as scheduled, with several second phase facilities in progress including the main processing plant and the camp expansion.
  • Construction has begun on the Baley ZIF-1 Tailings heap leach project, which is expected to produce first gold in 2022 with average annual output of 15,000 oz over 11 years.

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

“Highland Gold had a positive first half of 2020 despite the ongoing global pandemic, buoyed by strong gold prices and continued progress at our operating mines and on each of our key development goals for the year. The Company achieved a solid financial performance in spite of upward pressure on costs resulting, in part, from lower H1 production volumes and costs associated with addressing COVID-19.

From an operational standpoint, our mining plans for this year are weighted towards the second half and we maintain our production guidance for the year. The Novo and Belaya Gora expansion projects are progressing and remain on track for completion this year. Construction at Kekura continues apace, and work has also begun on the smaller Baley ZIF-1 heap leach project, which together will help the Company achieve its target of exceeding 500k ounces of production in the year 2023.”


  • On 31 July 2020, Directors Eugene Shvidler and Valery Oyf and a group of affiliated shareholders (the “Selling Shareholders “) agreed to sell their shareholdings in the Company, representing 40.06% of the Company’s issued share capital, to Fortiana Holdings Limited ("Fortiana") at a price per share of £3.00, paid in cash.
  • On that same date, Highland Gold and Fortiana announced that they had reached agreement on the terms of a recommended pre-conditional mandatory cash offer to be made by Fortiana for the shares in the Company not already held or agreed to be acquired by Fortiana (the "Offer"). Under the terms of the Offer, accepting shareholders of the Company would receive £3.00 per share in cash (being the same price and form of consideration as paid to the Selling Shareholders). Details of the potential transaction and related documents are available on the Highland Gold website at
  • In light of the Offer, the Board of Directors has deferred making a decision on the payment of an H1 2020 interim dividend pending the outcome of the transaction. The Directors noted the potential effect of such a disbursement on the terms offered to shareholders as per the announcement of the Offer made under Rule 2.7 of the UK Takeover Code, released on 31 July 2020.
  • On 13 August 2020, the Company experienced a fatality at MNV when a driver perished after his truck went through a barrier and down an incline. The Board and management team send their sincerest condolences to the family of the deceased and commit to ensuring that the incident is thoroughly investigated and any lessons learned are applied throughout the Company.
  • On 17 August 2020, Highland Gold published its debut Sustainability Report, containing data on its performance across a range of environment, social and governance (ESG) indicators reported to the Global Reporting Initiative (GRI) standard. The report is available on the Highland Gold website at


The Company will hold a webcast via Microsoft Teams to discuss the results, hosted by CEO Denis Alexandrov, on 01 September 2020 at 10:00 UK time (12:00 Moscow). The link to join the event is: 



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)

Paul Gillam, James Black

+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