Highland Gold Mining : Mineral Resources and Ore Reserves Update as at 31 December 2017

Highland Gold Mining Limited ('Highland Gold' or the 'Company', AIM: HGM) is pleased to report its Ore Reserves and Mineral Resources in accordance with the JORC Code as at 31 December 2017.

HIGHLIGHTS

• Highland Gold's Ore Reserves (proven and probable) increased by 56% to 5.1Moz of gold and gold equivalent from 3.3 Moz on 31 December 2016* following updated estimates for each of the Company's producing assets and its main development project, Kekura.
• Mineral Resources (measured, indicated and inferred) increased by 6.6% to 17.2 Moz of gold and gold equivalent as compared to 16.1 Moz on 31 December 2016*.
• The average grade in Ore Reserves was lowered to 3.3 g/t as compared to 8.0 g/t on 31 December 2016, reflecting lower cut-off grades and increased ore tonnage at Novo and Belaya Gora, plus the addition of Blagodatnoye.
• Updated resource estimates published last year for MNV, reflecting extensive near-mine exploration, and Novo, reflecting a reduced cut-off grade, added more than 800k oz of gold and gold equivalent to overall Ore Reserves.
• A resource update included in the pre-feasibility study for a combined Belaya Gora and Blagodatnoye operation more than tripled gold reserves to 932k oz versus previously reported figures for Belaya Gora alone, reflecting both the addition of Blagodatnoye and a 60% increase in Belaya Gora ore.
• A resource update for Kekura, published together with a definitive feasibility study for the project, featured an 18% increase in gold reserves to 2.0 Moz.

Highland Gold Mineral Resources**
in accordance with the JORC Code as at 31 December 2017

Highland Gold Ore Reserves
in accordance with the JORC Code as at 31 December 2017

* Mineral Resources and Ore Reserves as at 31 December 2016 as reported in the Company's annual report.
** Mineral Resources are reported inclusive of ore reserves.

The full Mineral Resources and Ore Reserves statement including data for each mine is available on the Highland Gold website (www.highlandgold.com).

Mr. Andrey Sevryugin, Senior Specialist in the Geology and Subsoil Use Department at Highland Gold, has reviewed and verified the information contained in this release with respect to mineral resources. Mr Sevryugin is an Expert of the Russian Society of Subsoil Use Experts (OERN) and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration to qualify as Competent Persons as defined in the JORC Code 2012 Edition.

FOR FURTHER INFORMATION PLEASE CONTACT:

Glossary

JORC - Widely accepted standard for reporting mineral resources and ore reserves established by the Australasian Joint Ore Reserves Committee.

Mineral Resource - concentration or occurrence of solid material of economic interest in or on the Earth's crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade or quality, continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling.

Inferred Mineral Resource - that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.

Indicated Mineral Resource - that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.

Measured Mineral Resource - that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.

Ore Reserve - the economically mineable part of a Measured or Indicated Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A Mineral Reserve includes diluting materials and allowances for losses that may occur when the material is mined.

Probable Ore Reserve - the economically mineable part of an Indicated and, in some circumstances, a Measured Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified.

Proven Ore Reserve - is the economically mineable part of a Measured Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction is justified.