Interim Results Announcement for H1 2012


Highland Gold Mining Limited (“Highland Gold” or the “Company”) announces its production figures and financial results for the half year ended 30 June 2012.


IFRS, US$000 (unless stated) H1 2012 FY 2011 H1 2011
Production (gold and gold eq.oz) 101,900 184,102 93,057
Gold sales (gold and gold eq.oz) 102,036 190,655 104,911
Group total cash costs (US$/oz) 804 594 531
Revenue 161,453 300,181 158,085
Gross profit 58,002 154,495 85,355
EBITDA 65,696 157,118 88,068
Earnings per share (US$) 0.139 0.319 0.216
Net cash inflow fr om operations 63,264 116,930 77,778
Capital expenditure 47,073 65,611 31,388
Cash and short term investments 150,793 126,746 272,233



  • Group revenue rose 2.1% to US$161.5 million in H1 2012 (H1 2011: US$158.1 million). As the result of a “no hedge” policy the Group fully participated in stronger spot gold prices and also benefited from the higher attributable metal production from Novo in line with its increased equity interest. The average price received for gold and gold equivalents, including Novo, during H1 2012 recorded a near 5% advance to US$1,537 per oz compared with US$1,464 per oz in H1 2011
  • The Group’s cost of sales totalled US$103.5 million (H1 2011: US$72.7 million) reflecting respective increases in open pit waste stripping and ore tonnes processed at MNV and ore tonnes mined and processed at Novo
  • EBITDA declined 25.4% to US$65.7 million (H1 2011: US$88.1 million) due to the higher cost of sales
  • Total cash costs amounted to US$804 per oz compared with US$531 per oz in H1 2011. This increase largely reflected the higher waste stripping volumes at MNV and a decrease in the average gold grade delivered for processing at MNV and Novo
  • Cash, short term deposits and bonds totalled US$150.8 million as at 30 June 2012 compared with US$272.2 million as at 30 June 2011. This reflected the acquisition of the additional interest in Novo and higher capital expenditure of US$47.1 million in H1 2012 compared with US$31.4 million in H1 2011
  • Interim special dividend of £0.048 per share

Producing Mines:

  • Combined production of gold and gold equivalents from Mnogovershinnoye (“MNV”), Novoshirokinskoye (“Novo”) (97.5% interest) and Belaya Gora totalled 101,900 oz – a 9.5% increase compared with H1 2011
  • On track to produce 200,000 – 215,000 oz of gold and gold equivalents in 2012
  • Production ramp up at Novo resulted in a 6% increase in processed tonnes compared with H1 2011
  • A 16% increase in total JORC compliant resources to 12.9 Moz, through exploration and acquisition, compared with stated figures as at 31 December 2011

Development and Exploration Sites:

  • Construction of the Belaya Gora stand-alone processing facility remains on track for commissioning in Q4 2012
  • Exploration drilling and underground development results at Unkurtash support potential continuity of mineralisation along strike and at depth
  • Exploration programme at MNV continued to target potential resources adjacent to existing operations (Watershed, Pebble/Quiet zones)
  • Continuation of exploratory drill works and underground development at Unkurtash designed to expand the resource base. Approval of mining licence by the Kyrgyzstan Government authorities paves the way for project development
  • Submission of Lyubov documentation to GKZ regulatory authorities and the commencement of an independent JORC resource audit
  • Exploratory drilling and trenching at Blagodatnoye continued to deliver positive results with an increased mineralised zone developing along strike and at depth


  • Medium term production profile expanded through purchase of the Klen and Verkhne-Krichalskaya licence areas with initial gold production scheduled for 2015


The Company will hold a conference call on Wednesday, 19 September 2012 hosted by Valery Oyf, CEO to discuss the interim results. The conference call will take place at 9 am UK time (12.00 Moscow). To participate in the conference call, please dial one of the following toll-free numbers:

UK Free Call 0800 694 0257

UK Local Call 0844 493 3800

UK Standard International +44 (0) 1452 55 55 66

Russia Free Call 8108 002 097 2044

USA Free Call 1866 966 9439

Conference ID 3261 83 95

A replay of the presentation will be accessible shortly afterwards by dialing one of the following numbers:

International Dial In +44 (0) 1452 55 00 00

UK Local Dial In 0845 245 52 05

USA Free Call Dial In 1866 247 4222

For further information please contact:

Highland Gold
Dmitry Yakushkin, Head of Communications - + 7 495 424 95 21
Duncan Baxter, Non-Executive Director - + 44 (0) 1534 814 202

Numis Securities Lim ited
(Nominated Adviser and broker)
Alastair Stratton / Stuart Skinner, Nominated Adviser - +44 (0) 207 260 1000
James Black, Corporate Broking - +44 (0) 207 260 1000