Highland Gold Mining : Interim Results Announcement for the 1H 2016

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26 September 2016 Highland Gold Mining Limited ('Highland Gold', the 'Company' or 'Group') today reports its unaudited financial results and production figures for the half year ended 30 June 2016 ('H1').

FINANCIAL SUMMARY

The interim condensed consolidated financial statements of Highland Gold for the six months ended 30 June 2016 are set out below.

H1 2016 HIGHLIGHTS

Financial

• Total first half revenue rose 13% year-on-year to US$147.1 million, reflecting improved metals prices and increased sales volumes during the period.
• H1 2016 EBITDA was US$ 79.7 million, an increase of 45% over H1 2015, while EBITDA margin rose to 54%.
• All-in sustaining costs (AISC) per ounce fell by 14% to US$609/oz, assisted by ongoing weakness in the rouble and strict cost controls.
• Free cash flow (defined as net cash flows from operating activities less cash flows used in investing activities) was US$60.7 million.
• INet debt to EBITDA ratio reduced to 1.3 as of 30 June 2016 versus 1.7 as of 31 December 2016 as the Company directed free cash flow to debt repayment.

Operations

• Total H1 2016 production of 128,671 oz of gold and gold equivalent at Mnogovershinnoye (MNV), Novoshirokinskoye (Novo), Belaya Gora, and Sredny Golgotay (Kaftan site), an increase of 6% from 121,242 oz in H1 2015.
• MNV and Novo exceeded internal production targets for the quarter, while at Belaya Gora efforts to optimise operations were ongoing.
• Exploration work continued on the Northern ore body at MNV, with reserves expected to receive approval from regulators by year-end.
• Work commenced on the planned expansion of processing capacity at the Novo mill.
  
• Pre-feasibility study completed for Kekura, and a subsequent fatal flaw review supported open pit and underground mine design plans.
  
• Scoping studies initiated for the Baley Cluster Projects (Taseevskoye, Sredny Golgotay and ZIF-1 tailings) and Unkurtash, and a revised pre-feasibility study initiated for Klen.
  

POST HALF YEAR EVENTS

• Interim Dividend of £0.05 per share approved by the Board of Directors
• The Company affirms its forecast for total production of gold and gold equivalent of 255,000-265,000 oz for the full year.

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