Interim Results for the Six Months ended 30 June 2004



  H1 2004 H1 2003 % Change
Turnover $38.2m $31.4m +22%
Operating Profit $10.8m $12.2 -11%
Profit after tax $6.5m $8.5m -24%
Capital Expenditure $30.4m $13.1m +132%
EPS 5.5 cents 7.7 cents -29%
Dividend per share 1.0 cent 1.5 cents -33%
  • Announcement of the acquisition of 80% stake in Investment Mining & Geology Company, (IMGC), the Russian licence-holder for exploration of gold and silver in the Eastern-Tetyaevskoye zone, on Urup Island in the Kurile region, Sakhalin
  • Production of gold at Highland’s primary asset, Mnogovershinnoe (MNV) up by 8% to 96,986 ozs; full-year production remains on target at 195,000 oz for 2004
  • Darasun now operational and, after initial production delays, on track to produce 120,000 oz in 2005
  • Documentation has now been submitted to the State Committee for Reserves for approval to increase the resources at Novoshirokinskoye (Novo) from 1.8m to 2.7m oz of gold equivalent, with consequent upscaling of production levels by more than 50% from 75,000 ozs to 115, 000 ozs of gold equivalent
  • Upscaled mining plan for Mayskoye adopted, increasing ore throughput from 550,000 tonnes p.a. to 1m tonnes p.a.
  • Group production profile extended to take account of upscaling at Novo and Mayskoye, growing from 320,000 ozs in 2005 to 695,000 ozs in 2009
  • Long term licences secured for Talatui and Novo with formal registration from Federal authorities to follow soon
  • Term sheet for exploration JV with Barrick signed

Commenting on today’s results, Ivan Koulakov, Managing Director, said:

“In the first half of 2004 Highland Gold took further significant steps towards realising its longer term potential; the transition to the new ore body at MNV progressed well, Darasun came on stream, estimated resources at Novo increased and a new large scale mining plan was developed at Mayskoye.

“Group production for 2004 is now expected to be 210,000 ozs, down from 235,000 ozs, reflecting an initial start up delay at Darasun. However, the good progress we have made at Novo and Mayskoye has enabled us to increase our long term projections, from 575,000 ozs in 2007 to 695,000 ozs of gold and equivalents in 2009. We continue aggressively to pursue further acquisitions, while strengthening the Group’s ability to deliver its growth programme.”

A briefing to analysts will take place at 10.00 am on Tuesday 21st September at The Lincoln Centre, 18 Lincoln’s Inn Fields, London WC2A 3ED. A live audio feed will be available to analysts and shareholders who are unable to attend this meeting in person. Please dial telephone number: +44 (0) 1452 561 263 and quote “Highland Gold” to access this facility. A replay facility can be accessed on +44 (0) 1452 550 000, PIN code 1941354#. A copy of the presentation will be available on at 10.00am.

Enquiries: +44 (0) 20 7404 5959
Highland Gold Peter Daresbury, Executive Chairman
  Ivan Koulakov, Managing Director
  Denis Alexandrov, Finance Director
  Dimitry Yakushkin, Director of Communications
Brunswick Andrew Garfield
  Mark Antelme
  Pavla Kazbundová