Final Results for the Year Ended 31 December 2011


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Highland Gold Mining Limited ("Highland Gold", the "Company" or the "Group" AIM: HGM) announces its final audited results for the year ended 31 December 2011.


IFRS, US$000 (unless stated) 2011 2010
Production (gold and gold eq.oz) 184,102 200,028
Group total cash costs (US$/oz) 594 513
Revenue 300,181 243,629
Gross profit 154,495 119,365
EBITDA 157,118 121,271
Earnings per share (US$) 0.319 0.376
Net cash inflow from operations 116,930 97,080
Capital expenditure 65,611 39,404
Cash and short term investments 126,746 222,470

Duncan Baxter, Chairman of Highland Gold Mining, commented:

"I am delighted to report that Group revenues, benefiting from higher realisations on gold sales, rose by 23.2% to more than US$300 million in 2011 accompanied by a near 30% increase in EBITDA to US$157.1 million. The US$110 million acquisition of a further 48.3% interest in the Novo mine completed at the end of the period represents a significant expansion of our production capability, while the strength of our balance sheet, which showed cash and short term investments of US$126.7 million at the year-end, leaves us well positioned to pursue our production growth objectives. We continue to anticipate an increase in output to between 200,000 - 215,000 oz of gold and gold equivalents in 2012."


  • Total production of gold and gold equivalents amounted to 184,102 oz (2010: 200,028 oz) derived from MNV, Novo (48.3%) and Belaya Gora
  • 29.6% increase in EBITDA to US$157.1 million (2010: US$121.3 million) reflecting higher realisations on gold sales
  • Total Cash costs of US$594 per ounce remain highly competitive versus peer group (2010: US$513 per ounce)
  • Interest in Novo doubled to 96.6% following US$110 million acquisition of Kazzinc's 48.3% holding thereby substantially increasing production capacity
  • Onset of construction of the second phase of the stand-alone processing plant at Belaya Gora directly supervised by enhanced new projects development and construction team
  • 190% (JORC compliant) increase in MNV's proven and probable reserves versus 31 December 2010
  • More than 75,000 metres of drilling completed at exploration projects
  • Pre-feasibility study of Lyubov project submitted to Russian regulatory authorities
  • Drilling results at Blagodatnoye project indicate significant resource potential
  • Interim dividend of 5 pence per share (2.5 pence special; 2.5 pence ordinary) paid in October
  • Strong debt free balance sheet. Cash and cash equivalents totalled US$126.7 million as of 31 December 2011 (2010: US$222.5 million).


  • The Company's JORC compliant resource base increased by 41% to 11.11 Moz (2010: 7.88 Moz) due to the initial independent audit at the Unkurtash project early in 2012 and last year's Novo transaction and resource audit update at MNV
  • Completion of audit at Sarytube prospect expected to yield additional 1 Moz of resource in H1 2012


  • MNV - maintain stable production at flagship mine in parallel with ongoing surface drilling programme with the aim of extending open pit mining operations
  • Novo - leverage 96.6% ownership by raising annual throughput to an estimated 450,000 tonnes in 2012 with 550,000 tonnes targeted for 2013
  • Belaya Gora - progress construction of second phase of the stand-alone processing facility with commissioning scheduled for Q4 2012
  • Unkurtash - continue with exploration programme in order to drive development of potential world class deposit
  • Taseevskoye - conclude drilling, sampling and testwork necessary for a decision on advancing to a definitive feasibility study
  • Lyubov - obtain Russian GKZ registration for submitted reserve base, followed by an independent JORC compliant audit
  • Blagodatnoye - advance exploration programme to substantiate resource potential
  • Vigilant deployment of internationally comparable best practice health, safety and environmental standards Group wide


The Company will hold two conference calls on Tuesday, 24 April 2012 hosted by Valery Oyf, CEO to discuss the final results. The conference calls will take place at 08.00 UK time (11.00 Moscow) and 16.00 UK time (11.00 am EST) to allow participation from the Company's global shareholder base. The dial-in information for each conference call is set out below:

08.00 UK time (11.00 Moscow)  
Telephone number: +44 (0) 1452 580 111
Conference ID: 74563302
16.00 UK time (11.00 am EST)  
Telephone number: +44 (0) 1452 555 566
Conference ID: 74566136

For further information please contact:

Highland Gold:
Dmitry Yakushkin, Head of Communications +7 495 4249521
Numis Securities Limited:
Alastair Stratton / Stuart Skinner, Corporate Finance +44 (0) 207 260 1000

James Black, Corporate Broking +44 (0) 207 260 1000

The Annual General meeting will be held on 14 June 2012.