Annual General Meeting
Highland Gold Mining Limited ("Highland Gold", or the "Company") confirmed today at the Annual General Meeting of the Company that all the ordinary resolutions were passed. The Company also provided an update on the development of some of its projects.
Commenting on today’s announcement, Henry Horne, Managing Director said: “We have made significant progress since December in a number of key areas. Following a wide ranging operational and technical audit MNV is now operating well and, at current levels, we anticipate strengthened production results for the second half of the year leading to the achievement of our target for 2007 of 160-170,000 ozs. The longer term result of the audit should produce a 10% increase in production year on year continuing into 2008 and 2009. Good progress is being made at Novo which is on schedule for start-up in 2H 2008. Some encouraging results are available from our drilling programme at Belaya Gora. The Mayskoye feasibility study will be available during the latter part of this year. Metallurgical test work at Taseevskoye is ongoing and we expect to be able to announce our plans for Darasun in the near future.”
On the completion earlier this year of a full operational and technical audit at MNV, well over 100 business critical initiatives aimed at increasing production and decreasing costs have been identified. On a prioritised basis the implementation of these initiatives has already started with positive results. This process will be on-going throughout 2007 with the top 62 initiatives (80% of the identified value) being implemented by year end.
Improvements include the completion of the transfer of equipment from the Darasun mining complex to MNV as well as the deployment of new equipment for the underground operation.
As an interim result, mining recoveries and productivity have improved and stripping and ore mining in key development zones has been accelerated. In addition the transfer of equipment from Darasun has resulted in the cancellation of planned capital equipment orders in 2007 and allows the retirement of obsolete and inefficient equipment.
These initiatives will lead to significant operating flexibility, higher production and reduction in future operating costs.
Since the joint venture agreement with Kazzinc was signed at the end of 2006, considerable progress has been made in the preparation for the start up of the Novoshirokinskoye Mine scheduled for 2H 2008, with development mining scheduled for 4Q this year. These include:
- approval obtained from the Federal Russian authorities to proceed with underground mine development
- two separate general contractors have been engaged to complete the infrastructure construction
- major components for the plant are already in place.
Significant progress has been made with the ongoing drilling programme at the two targets “Pologaya” and “Stockwork” which are being explored for a bulk-mineable low-grade gold resource hosted in altered volcanic rocks. Exploration work includes:
- a programme of 12,000m of drilling and selected trenching is on schedule and aimed at further delineating resources and defining average grades for the two target areas
- at Pologaya, 42 shallow drill holes totalling 2,680m have been completed. All holes intersected strongly oxidised tuffs over an area of 400x300m. The majority of holes returned significant gold intersects indicating a tabular near-surface open pittable mineral resource with ore intervals average grade ranging from 2.0 to 9.3g/t
- at Stockwork, 16 holes totalling 4,605m have been completed to date for which partial fire assays for 9 holes have been received. All drill holes intersected intermittent stockwork-type sulphide mineralisation which is oxidised to a depth of 50m from surface - most of these holes yielded significant gold intersects in the 1- 2g/t range over several tens of metres.
- ENDS -
|For further information please contact:|
|Henry Horne, Managing Director
Dmitry Yakushkin, Director of Communications
Moscow: + 7 (495) 777 3155
Head of Investor Relations
London: +44 (0) 207 851 6400O
or, WMC Communications,
Alex Glover on +44 20 7930 9030O
or, JPMorgan Cazenove (Nominated Adviser)
Michael Wentworth-Stanley +44 20 7588 2828
Notes to Editors
Improvements to be introduced include the completion of the transfer of equipment from the Darasun mining complex to MNV, namely Belaz and Caterpillar trucks, blast hole drills, hydraulic shovels, loaders with all the associated support equipment and spares. This equipment is currently being used to accelerate stripping and ore mining in the Upper pit and achieving early access to the Pebble and Quiet zones. The transfer of this equipment has resulted in the cancellation of some planned capital equipment orders for MNV in 2007 and positions us to retire the old electric Russian drilling and loading fleet by year-end. At the same time new equipment is being brought in for the underground operation which has improved mining recoveries and productivities.
The re-sequencing of the open pit has started to include new and additional equipment. In order to concentrate on a limited number of ore bodies and to redeploy resources to more productive areas, part of the open pit - the Flank deposit - was shut down temporarily with the men and equipment transferred to other sites.
Work on the MNV mill upgrading has also started. This includes increasing leach residence time to improve recovery and reduce cyanide consumption, automating the grinding circuit to reduce electricity, reagent and water consumption, and other operating cost initiatives. These and other measures will result in the expansion of capacity of the mill from 85,000 tpm to 110,000tpm by year end.
An improved purchasing system was implemented at the mine and a new wages and bonus system to incentivise employees was introduced. Centralized maintenance shop and stores will be commissioned by the end of Q3 which will improve mechanical availabilities whilst reducing operating costs.
With the development of a mining production plan, approval has now been obtained from the Federal Russian authorities to go ahead with underground mine development. This is in order to prepare the ventilation system and open up levels in advance of approval being sought later this year for the commencement of mining operations. Currently infill drilling is in progress to pinpoint the precise location of ore mining development access.
Two separate general contractors have been engaged to complete the infrastructure and upgrade for various major projects such as new accommodation and administration buildings, assay laboratory, explosives storage and mine rescue station, as well as Tailing Dam and piping requirements, plant heating, clean water and sewage distribution systems.
The process plant structure which is completed, with major components such as SAG mills and ball mills already in place, requires the remaining equipment and connecting piping to be installed. With the finalisation of the Process Design, work is now in progress to develop the detailed engineering to allow the remaining process plant work to be contracted out.
A contracted company is also in the process of refurbishing the Skip Shaft in preparation for hoisting of ore to the plant.
Many more major components required for the upgrade of current facilities are already on order such as ventilation fans, a back-up emergency generator power plant, a power distribution system, a shaft emergency signaling system and underground drilling equipment.
Fire assay results obtained from the 2006 exploration programme including 4,200m of drilling and 1,168m of trenching generally confirmed the property potential and corroborated our geological model. The 2007 programme totalling 12,000m of drilling and selected trenching is on schedule and aimed at further delineating resources and defining average grades for the two target areas.
At Pologaya, 42 shallow drill holes totalling 2,680m have been completed to date. All holes intersected strongly oxidized tuffs over an area of 400x300m. The majority of holes returned significant gold intersects indicating a tabular near-surface open pittable mineral resource:
|Belaya Gora – Target Pologaya – Significant Drilling Results|
|Drill Hole ID||From [m]||To [m]||Intersect Length [m]||Avg. grade Au [g/t]|
Trench TR-75 returned a preliminary interval of 63 m@ 4.13 g/t Au which remains open to the west and highlights the potential for further expansion of the Pologaya prospect and which will be tested in the course of the current drilling programme.
At Stockwork, 16 holes totalling 4,605m have been completed to date for which partial fire assays for 9 holes being received. All drill holes intersected intermittent stockwork-type sulphide mineralisation which is oxidized to a depth of 50m from surface. Most holes yielded significant gold intersects in the 1- 2g/t range over several tens of metres. Hole DH-504 stands out with 2.1 g/t over a length of 131m, underlining the resource potential of the Stockwork area.
Drilling and assaying continues to outline a resource in this most prospective but structurally more complex centre of the Belaya Gora volcanic structure.
|Belaya Gora – Target Stockwork – Significant Drilling Results|
|Drill Hole ID||From [m]||To [m]||Intersect Length [m]||Avg. grade Au [g/t]|
|* Preliminary (spectroscopic assay) Composite intervals calculated using a 5 metre minimum waste interval and a 0.5g/t Au cut-off grade.|