Interim Results Announcement for H1 2010

21.09.2010

Highland Gold Mining Limited ("Highland Gold", or the "Company") announces its production and financial results for the half year ended 30 June 2010.

View the full results announcement (PDF - 794 Kb)

FINANCIAL SUMMARY

Financial (US$ millions) H1 2010 H1 2009
Revenue 100.5 78.8
Cash inflow from operating activities 37.3 18.4
Group Gross Profit 43.2 28.7
Group Operating profit 36.7 19.4
Net profit from Continuing operations 23.3 39.6
Profit for the period 23.3 38.1
EBITDA 46.7 27.3
Diluted earnings per share from continuing operations (US$/share) 0.071 0.121
Capital expenditure 13.7 15.9
Production    
MNV - Gold produced (oz) 75,771 78,421
MNV - Gold sold (oz) 75,359 83,860
MNV - Cash operating cost (US$/oz ) 415 421*
MNV - Total cash cost (US$/oz) 489 478*
Novo - Gold produced (oz) 10,018** -
Novo - Gold sold (oz) 10,734** -

* US$36/oz of management company services have been excluded from H1 2009 cash costs
** HGML share of 48.3% in Novo

HIGHLIGHTS

Financial:

  • Group gross profit of US$43.2 million, a 50.6% increase compared to H1 2009 (US$28.7 million)
  • In spite of a stronger rouble total cash costs at MNV were contained and amounted to US$489/oz (H1 2009: US$478/oz)
  • Group EBITDA increased by 71.3% to US$46.7 million (H1 2009: US$27.3 million)
  • Cash, short term deposits and bonds at 30 June 2010 were US$216.5 million

Producing Mines:

  • Mnogovershinnoye ("MNV") and Novoshirokinskoye ("Novo") (48.3% HGML share) combined produced 85,789 oz of gold and gold equivalents - a 9.4% increase on H1 2009 production
  • After first shipments of concentrate in February 2010, Novo continues to ramp up mining and processing levels
  • Company remains on track to produce 200,000 - 210,000 oz of gold and gold equivalents in 2010

Development Sites:

  • Preparation of open pit production at Belaya Gora remains on track to mine and deliver near surface oxide ore
  • Taseevskoye metallurgical pilot test works are ongoing

Exploration:

  • Exploration drill works at Unkurtash continue to return positive drill intercepts and increase confidence for a substantial size deposit
  • Exploration drill works at Lyubov extended to accelerate project towards reserve registration
  • Purchase of the Blagodatnoye exploration property increases the mining potential in the Khabarovsk region
  • Purchase of Belaya Gora Flanks exploration property adds near-mine exploration potential for the operation

CONFERENCE CALL DETAILS

Highland Gold will hold a conference call hosted by Valeryi Oif, CEO. The conference call will take place at 10.00 am London time on 21 September 2010. To participate in the conference call, please dial one of the following toll-free numbers:

UK Free Call 0800 694 0257

UK Standard International +44 (0) 1452 555 566

USA Free Call 1 866 966 9439

Russian Free Call 8108 002 097 2044

Conference ID 12562713

A recording of the presentation will be accessible on the company website www.highlandgold.com shortly after, as well as by dialling one of the following numbers:

International Dial in: + 44 (0) 1452 55 00 00

UK Free Call Dial In: 0800 953 1533

UK Local Dial In: 0845 245 5205

USA Free Call Dial In: 1866 247 4222

Encore Replay Access Number: 12562713#

Encore Replay will be available until 20 October 2010

For further information please contact:

Highland Gold Dmitry Yakushkin, Head of Communications - + 7 495 424 95 21
  Duncan Baxter, Chairman - + 44 (0) 1534 814202
Fin Public Relations Alex Glover - + 44 (0) 207 608 2280
J.P. Morgan Cazenove Michael Wentworth-Stanley, Managing Director
(Nominated Advisor) + 44 (0) 207 588 2828
Matrix Corporate Capital Robin Henshall, Partner - +44 (0) 203 206 7172
(Joint Broker) Alastair Stratton, Partner - + 44 (0) 203 206 7204

The Interim Report to 30 June 2010 will be available on our website from 27 September 2010.