Interim Results Announcement for H1 2013

18.09.2013

Highland Gold Mining Limited (“Highland Gold,” “Highland” or the “Company”) announces its unaudited financial results and production figures for the half year ended 30 June 2013.

FINANCIAL SUMMARY

IFRS, US$000 (unless stated) H1 2013
unaudited
FY 2012
restated
H1 2012
restated
unaudited
Production (gold and gold eq.oz) 105,630 216,885 101,900
Gold sales (gold and gold eq.oz) 110,423 215,917 102,036
Group total cash costs (US$/oz) 717 670 747
Group all-in sustaining costs (US$/oz) 912 894 981
Revenue 157,033 351,828 161,453
Gross profit 48,993 150,562 61,679
EBITDA 63,278 179,001 71,503
Net profit 17,000 126,427 47,991
Earnings per share (US$) 0.052 0.388 0.148
Net cash inflow fr om operations 71,640 137,598 70,810
Capital expenditure 67,929 125,028 47,073
Kekura acquisition 207,000 - -
(Net debt position)/ Net cash and investments (177,604) 52,596 150,793

H1 2013 KEY EVENTS

Financial & Operations

  • Production guidance in respect of FY2013 maintained at 225,000 – 240,000 oz of gold and gold equivalents
  • Total cash costs were a highly competitive US$717 per ounce reflecting the cost reduction programme initiated in H2 2012
  • Combined production of gold and gold equivalents from Mnogovershinnoye (“MNV”) and Novoshirokinskoye (“Novo”) mines reached 105,630 oz – a 3.7% increase compared with H1 2012
  • Optimisation of Novo’s production operations resulted in a 6% increase in processed tonnes versus H1 2012
  • Interim dividend of £0.025 per share (H1 2012: Interim special dividend of £0.048 per share)
  • Company’s assets remained unimpaired despite significant declines in metal prices
  • Investment strategy refined in the light of adverse market conditions
  • Group JORC compliant resources registered a 25% increase to 16.5 Moz (compared with 13.2 Moz stated at 31 December 2012) as a result of the Kekura licence purchase and an independent resource audit update at Unkurtash

Development and Exploration

  • Construction of Belaya Gora processing facility and wet testing completed with ore feed tests and process adjustments underway
  • Commencement of preliminary construction work at Klen project following ongoing equipment deliveries
  • Construction of Kekura pilot plant making good progress with commissioning expected in Q4
  • MNV’s Western Flank exploration programme underway, targeting potential near surface resources adjacent to existing operations

POST HALF YEAR EVENTS

  • The official opening of Belaya Gora’s process plant by the Governor of the Khabarovsk Region and other dignitaries was held on 22 July 2013 accompanied by a viewing of all the facilities and operations
  • Upgrade of SAG mill at Novo completed in July 2013
  • Appointment of Colin Belshaw as an Independent Non-Executive Director with effect from 10 September 2013
  • New US$100.0 million financial agreement with Sberbank signed in September 2013

CONFERENCE CALL DETAILS

The Company will hold a conference call on Wednesday, 18 September 2013, hosted by Valery Oyf, CEO, to discuss the interim results. The conference call will take place at 9 a.m. 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

USA Free Call 1866 966 9439

Conference ID 64440355

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 0844 338 66 00

USA Free Call Dial In 1866 247 4222

For further information please contact:

Highland Gold Mining

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 Joint Broker)
Stuart Skinner / John Prior, Nominated Adviser
+44 (0) 207 260 1000
Peat & Co
(Joint Broker)
Charlie Peat
+44 (0) 207 104 2334