Final Results for the Year Ended 31 December 2012


Highland Gold Mining Limited (“Highland Gold”, the “Company” or the “Group” AIM: HGM) announces its final audited results for the year ended 31 December 2012.


IFRS, US$000 (unless stated) 2012 2011
Production (gold and gold eq.oz) 216,885 184,102
Total Group cash costs (US$/oz) 749 594
Revenue 351,828 300,181
Gross profit 146,258 154,495
EBITDA 161,808 157,118
Earnings per share (US$) 0.378 0.319
Net cash inflow from operations 131,199 116,930
Capital expenditure 125,028 65,611
Net cash position 52,596 126,746

Eugene Shvidler, Chairman of Highland Gold Mining, commented: “Solid progress was achieved across the Group’s operations during 2012 as rigorous efficiencies led to a 17.8% increase in total production. Cost containment measures brought second half benefits, the construction of the Belaya Gora processing plant proceeded to the final stages and our exploration projects yielded a series of encouraging results. This was accompanied by further M&A activity which, earlier this month, culminated in the US$223.0 million acquisition of the Kekura licence, a transaction which significantly strengthens our prospective production profile. We remain confident that such developments leave the Company well positioned to advance its growth strategy.”


  • Group wide production rose 17.8% to a record 216,885 oz of gold and gold equivalents (2011: 184,102 oz) thereby exceeding guidance estimates. This represents the combined contribution from the Group’s three operating mines: Mnogovershinnoye, Novoshirokinskoye and Belaya Gora
  • 3.0% increase in EBITDA to US$161.8 million (2011: US$157.1 million) reflecting higher sales volumes
  • Total cash costs of US$749 per ounce remained competitive versus peer group (2011: US$594 per ounce)
  • Increase of 2.2 Moz in total JORC compliant resource base to more than 13.0 Moz (compared with stated level as of 31 December 2011) reflecting contributions from the Unkurtash, Klen and Lyubov projects
  • Acquisition of Klen and adjacent Verkhne-Krichalskaya (VK) licence adds near-production resources and significant exploration targets
  • Acquisition of Western Flank licence adds near-mine exploration property with strong potential for the delivery of additional resources at MNV, thereby extending the life of the mine beyond 2016
  • Exploration results from three targets within the MNV licence corroborate potential for the supply of further resources to the mine
  • Positive exploration results at Blagodatnoye confirm potential for additional contributions to the Company’s resource base
  • Interim special dividend of 4.8 pence per share paid in October 2012
  • Net cash and cash equivalents (including shares and bonds) totalled US$52.6 million as of 31 December 2012 (2011: US$126.7 million)


  • Final dividend of 3.0 pence per share recommended, making a total distribution of 7.8 pence for the year (2011: 5.0 pence)
  • US$223.0 million acquisition of the Kekura licence extends Company’s interest in the investment friendly region of Chukotka and adds approximately 2.89 million JORC compliant resource ounces to the mid-term pipeline
  • Construction of several key components of the Belaya Gora stand-alone processing facility completed in April 2013
  • ISO 14001 (2004) certification of the environmental management systems at the Mnogovershinnoye mine and Russdragmet (RDM) LLC, the Moscow-based management company, awarded


  • Total production in 2013 is forecast to be in the range of 225,000 – 240,000 oz of gold and gold equivalents (derived from MNV, Novo and Belaya Gora)
  • First gold at Belaya Gora to be poured in May 2013
  • Kekura project development to be fast tracked in parallel with a targeted 40,000 metre exploration drilling programme scheduled for 2013/14
  • Klen project development planned during 2013–2015 accompanied by the commencement of a major exploration programme within the VK licence
  • Unkurtash – continue exploration programme in order to unlock full potential
  • MNV – maintain steady production levels while containing costs. Exploration will focus on near-surface drilling at the recently purchased Western Flank licence
  • Novo – improve efficiencies and increase plant throughput following a scheduled mid-year mill upgrade
  • Continued focus on health, safety and environmental best practice standards, including preparations at Novo and Belaya Gora for ISO 14001 (2004) certification


The Company will hold a conference call on Tuesday, 23 April 2013 hosted by Valery Oyf, CEO to discuss the final results. The conference call will take place at 10.00 UK time (13.00 Moscow). The dial-in information for each conference call is set out below:

10.00 UK time (13.00 Moscow)
Telephone number: +44 (0) 1452 555 566
Conference ID: 50094499

For further information please contact:
Highland Gold
Dmitry Yakushkin, Head of Communications +7 495 4249521
Numis Securities Limited
Stuart Skinner, Corporate Finance +44 (0) 207 260 1000
James Black, Corporate Broking +44 (0) 207 260 1000
Peat & Co (Joint Broker)
Charlie Peat +44 (0) 207 104 2334

The Annual General meeting will be held on 11 June 2013