Highland Gold Announces Significant Drilling Results at Belaya Gora

21.07.2007

Highland Gold Mining Limited ("Highland Gold", or the "Company") is pleased to report significant results from the 2006/2007 diamond drilling programme at the Belaya Gora (“White Mountain”) exploration property in the Khabarovsk region ( 66 km to the south of MNV operation) where two targets, Pologaya and Stockwork are currently being drilled out.

Results of the Programme, which to date includes 9,300 metres of drilling and 1,513 metres of trenching, confirmed previous exploration results and corroborated the geological models for two types of mineralisation: flat lying metasomatic tabular deposit with oxidized ore at Pologaya and steeply dipping vein-veinlet systems at Stockwork. A

t Pologaya drill-holes have identified gold-bearing tuffs averaging a thickness of 30-40m over an area of 400 x 150m. Most drill-holes returned significant gold intersects with the upper boundary at 0-15m level from the surface. Drilling results returned gold grade ranges from 1.5 to 9.3g/t at thickness of 3.0-28.0m.

At Stockwork drill-holes identified an oxidation zone down to the depth of 50-100m. Drill-hole DH-504 yielded a continuous interval of ca. 131m with an average gold grade of 2.1g/t. Drilling, sampling and assay program me s are currently going on and include testing of two metallurgical samples.

Commenting on today’s announcement, Henry Horne, Managing Director said:“These are very exciting results. Due to the prospectivity of this exploration property, we have increased our investment exploration programme for 2007 to almost $4.5 million from just over $1 million in 2006. We expect to benefit considerably from the various operating synergies with our main producing asset MNV, located just 66 kilometres away, including purchasing, logistics, processing and G&A costs. Opportunities for heap leaching on site and trucking the higher grade ore to MNV from this open pit deposit promise to make Belaya Gora a relatively low cost operation. The ongoing 2007 drilling programme including 12,000 metres of drilling is on schedule and currently we are making good progress in delineating more resources in the target areas.”

 

- ENDS - For further information please contact: Henry Horne, Managing Director Dmitry Yakushkin, Director of Communications Moscow: + 7 (495) 777 31 55 Dominic Palmer-Tomkinson, Head of Investor Relations London: +44 (0) 207 851 64 00 Or, WMC Communications, Alex Glover on +44 20 7930 9030 Detailed Findings The Belaya Gora exploration property is well situated to local infrastructure and is only 66 k ilometres driving distance from our Mnogovershinnoye operation. Gold mineralisation at Belaya Gora is localised within subvolcanic extrusive structure composed with dacites and rhyo-dacites in the central part and with tuffs of the similar composition at flanks intruding and overlaying the older stratified layers of mainly andesit-basalt composition. Gold mineralisation has spatial relation with fields of intensive argillisation covering an area of about 0.6km2. Economic gold mineralisation is related to the zones of metasomatic silicification, of quartz veinlet and to the areas of strongly argillised brecciated rocks cemented with fine cryptocrystalline quarts. Belaya Gora is a typical Low Sulphidation Epithermal deposit. Results of the Work Programme providing for 9,300m of drilling and 1,513m of trenching already confirmed previous exploration results and corroborated two geological models for two morphological types of gold mineralisation:

  • steeply-dipping metasomatic tabular deposit with oxidized ore at Pologaya and
  • complex dendritic vein-veinlet systems at Stockwork zone.

At Pologaya, a total of 51 shallow drill-holes of mostly South-East inclination of 60-75o and amounting to 3,137m have been completed to date. All the drill-holes intersected intensively altered and oxidised tuffs of slight cementation over an area of 400 x 150m and underlying barren andesite-basalts. The average thickness of the gold-bearing zone is 30-40m. Most drill-holes revealed significant gold intersects indicating a near-surface tabular almost sub-horizontal ore deposit. Some highlights to the current drilling programme are summarised below.

Belaya Gora – Target Pologaya – Drilling – Fire Assays
Drill Hole ID From [m] To [m] Intersect Length [m] Avg. grade Au [g/t]
7505 4.6 27.6 23.0 6.2
7504 3.3 29.8 26.5 3.9
6503 2.8 13.3 10.5 9.3
7005 4.4 25.4 21.0 3.7
7003 15.8 30.7 14.9 4.7
9005 5.2 19.9 16.9 3.1
7506 4.0 32.3 28.3 2.5
8002 7.1 15.2 23.9 2.0
9006 3.0 18.4 15.4 2.9
7510 0.8 25.8 25.0 1.5
6507 1.3 7.5 6.2 4.2
9003 2.4 9.2 6.8 2.8

Drilling results at Pologaya also corroborate sampling results from several trenches which were excavated down to 3m along drilling profiles. Trench TR-75 assay results yielded a significant intersect of 32m with gold grade of 5.7g/t.

Belaya Gora – Target Pologaya – Trenching – Fire Assays
Trench ID From [m] To [m] Intersect Length [m] Avg. grade Au [g/t]
TR75 6.0 38.0 32.0 5.7
TR75 45.0 66.0 21.0 1.67

Recalculation of all the data in accordance with the assay results at Pologaya area shows that the expected resources may amount up to 3 million tonnes average thickness of 19m and average gold grade of about 2.6g/t. At Stockwork, a total of 23 drill-holes of mostly N-W inclination at 55-60 o amounting to 6,162m have been completed to date. Core sampling at Stockwork has revealed a complex distribution of gold mineralisation represented with cryptocrystalline quartz vein and veinlet systems within intensively whitened (argillised) sub-volcanic rhyo-dacites. Drill-hole DH-504 yielded a continuous interval of ca. 131m with average gold grade of 2.1g/t, total thickness of the mineralised zone amounting to more than 250m. Thus the potential of the Stockwork zone has been delineated down to the depth of 300m. Some highlights to the current drilling programme are summarised below.

Belaya Gora – Target Stockwork – Drilling – Fire Assays
Drill Hole ID From [m] To [m] Intersect Length [m] Avg. grade Au [g/t]
DH504 105.9 236.8 130.9 2.1
4501 79.0 147.9 68.9 1.5
6501 20.9 32.7 11.8 2.6
4002 204.1 222.1 18.0 4.0
4004 204.1 222.1 18.0 4.0
4003 38.1 78.3 40.2 1.4
Spectroscopic Assays (XRF)
6509 7.2 60.2 53 3.6
4005 33.3 44.5 11 3.5
4503 106.0 135.0 29 1.9

The 2007 Programme also includes two proposed metallurgical samples of 300kg each (one from Pologaya, one from Stockwork) in order to determine indicative recoveries. Note: all composite intervals in the above tables have been calculated using a minimum 5m waste interval and Au cut-off grade of 0.5g/t.