Positive Results from Exploration Projects in Khabarovsk Region

22.06.2011

Highland Gold Mining Limited ("Highland Gold", or the "Company" AIM: HGM) is pleased to announce positive initial results from its Blagodatnoye and Belaya Gora Flanks properties, two highly prospective exploration projects located in close proximity to and which could feed into the Belaya Gora Project. These latest results corroborate the Company's plan to enlarge the historically reported resources at these two properties and support the Company's commitment of substantially increasing its asset base within its strategic mining hub in the Khabarovsk region.

At Blagodatnoye, using preliminary spectral analysis, assay data indicates a gold-mineralised zone of approximately 500 metres in length by 400 metres in width which was intersected to a depth of 200 metres. The prospectivity of the zone remains open in all directions. Intersects of gold mineralisation from trenching and core drilling display a high degree of continuity and underline the potential for Blagodatnoye to host substantial near surface ore with grades ranging between 1.5 and 2.0 g/t. Initial core drilling results also indicate that gold mineralisation is associated with a linear stockwork system characterised by sets of sub-parallel east-west trending and steeply dipping zones of narrow veins and quartz-carbonate veinlets.

Blagodatnoye - Drilling & Trenching Highlights 2011
Drill Hole Id Drill Hole
Length
[m]
From
[m]
To
[m]
Intersect
Length
[m]
Au [g/t]
c-5002 250.0 13.1 15.0 1.9 3.1
86.1 102.1 16.0 3.0
114.0 135.0 21.0 1.5
153.8 156.0 2.2 1.5
199.6 216.6 17.0 1.9
c-5004 256.1 3.9 5.4 1.5 2.4
11.1 13.1 2.0 1.4
17.6 25.0 7.4 1.3
28.0 32.0 4.0 1.3
58.3 68.9 10.6 1.2
84.6 86.6 5.0 3.8
96.5 100.5 4.0 2.5
106.5 109.5 3.0 3.5
117.0 118.0 1.0 4.4
Trench Id Trench Length
[m]
From
[m]
To
[m]
Intersect
Length
[m]
Au [g/t]
K-151201 483.0 94.6 98.0 3.4 1.1
112.0 115.0 3.0 0.8
120.3 136.0 15.7 3.3
138.0 145.4 7.4 1.8
151.0 165.0 14.0 1.5
181.0 183.4 2.4 2.1
187.0 190.0 3.0 3.1
196.0 199.0 3.0 2.1
202.0 210.0 8.0 1.2
260.0 262.0 2.0 2.5
281.0 283.0 2.0 1.1
293.0 294.0 1.0 3.3
327.0 328.0 1.0 4.0
346.0 347.0 1.0 2.6
377.0 378.0 1.0 4.6
383.0 385.0 2.0 1.4
395.0 412.6 17.6 2.1
424.0 428.0 4.0 1.5
438.0 439.0 1.0 6.0
445.3 449.0 3.7 1.9
464.0 474.0 10.0 2.2
479.0 483.0 4.0 1.9
K-149601 500.0 88.0 95.0 7.0 2.9
117.0 119.0 2.0 1.6
134.0 135.4 1.4 1.6
197.0 205.0 8.0 0.9
240.0 244.0 4.0 1.5
254.0 267.0 13.0 1.2
Preliminary spectral analysis assays.- Drill hole inclination from surface: 60 degrees; Intersects defined by cut-off grade of 0.7 g/t, 3 metre maximum waste interval, 3 metre or 2.1  g*m minimum ore interval.

The Blagodatnoye property was acquired in a public auction in H1 2010 and is located 30 km to the southwest of the Belaya Gora Project and has a reported prognostic resource estimate of 161,000 oz of gold. Following the Company's initial 2010 exploration programme which confirmed previous sampling results the 2011 programme now underway includes 10,000 metres of core drilling to delineate the extent and continuity of gold mineralisation. To date more than 3,000 metres of drilling and 1,000 metres of trenching have been completed.

At Belaya Gora Flanks (BGF),using preliminary spectral analysis, assay results from initial trenching and core drilling samples from two prospects have yielded significant intersects of gold mineralisation corroborating the resource potential of the Belaya Gora Flanks license:

Belaya Gora Flanks - Drilling & Trenching Highlights 2011
Drill Hole Id Drill Hole Length
[m]
From
[m]
To
[m]
Intersect
Length
[m]
Au [g/t]
21863 115.4 19.9 28.9 9.0 6.29
21744 172.0 50.0 53.8 3.8 1.00
21862 175.3 108.6 116.0 7.4 1.01
21742 100.0 6.0 11.0 5.0 1.86
22262 112.5 8.0 12.3 4.3 1.84
Trench Id Trench Length
[m]
From
[m]
To
[m]
Intersect
Length
[m]
Au [g/t]
2261 72.0 40.0 41.0 1.0 8.60
2261 58.3 72.0 13.7 2.92
2181 165 79.0 143.3 64.3 1.87
2101 138 36.3 37.5 1.2 1.59
2101 59.0 62.0 3.0 1.35
2101 86.0 94.0 8.0 1.12
1861 165 5.0 9.5 4.5 1.39
1741 465 72.0 81.0 9.0 0.88
1741 231.3 236.8 5.5 0.81
Preliminary spectral assays. - Drill hole inclination from surface: 60 degrees; Intersects defined by cut-off grade of 0.7 g/t, 3 metre maximum waste interval, 3 metre or 2.1 g*m minimum ore interval.

The 33 km² BGF license encapsulates the Belaya Gora deposit and is viewed to have excellent near-mine exploration potential to increase the open-pit resource base for the Belaya Gora Project. The BGF licence area was partially explored in the past and historical data notes a reported prognostic resource estimate of 200,000 oz of gold. The area hosts several known prospects with linear zones of vein-type and stockwork gold mineralisation with reported grades ranging between 1 g/t and 3 g/t and noted highlights up to 20 g/t.

The 2011 exploration programme now underway includes trenching and a 5,000 metre core drilling programme for verifying and expanding the known mineralised prospects as well as testing of unexplored areas.

Highland Gold is committed to maintaining its policy of successfully advancing quality exploration projects to reserve status and continues with its exploration efforts at both the Blagodatnoye and Belaya Gora Flanks properties, each being integral projects for the Company's strategy of organic growth in the region. A total of US$5.5 million of the Company's US$30 million planned 2011 exploration budget is earmarked for these two projects.

Mr. Werner Klemens, Head of Exploration at Highland Gold has reviewed and verified the information contained in this release with respect to drilling and resource / reserves matters. Mr. Klemens holds a Ph.D. in Geology from the University of Toronto. He has 13 years experience in mineral exploration and is a fellow of the Geological Association of Canada. A rigorous quality assurance programme complying with international standards is in effect at all exploration projects and includes duplicate sampling, insertion of standards and check assaying at external laboratories.

For further information please contact:

Highland Gold Dmitry Yakushkin, Head of Communications
+ 7 495 424 95 21
  Duncan Baxter, Chairman + 44 (0) 1534 814 202
   
Matrix Robin Henshall, +44 (0) 20 3206 7172
(Nominated Adviser and broker) Tim Graham, +44 (0)20 3206 7343
   
Fin Public Relations Alex Glover + 44 (0) 20 7608 2280