Highland Gold Mining : Scoping Study Confirms Economic Potential of Unkurtash Project

20 March 2017

Highland Gold Mining Limited ('Highland Gold' or the 'Company') announces details of a Scoping Study, compiled together with consultants SRK, which indicates positive economics for the Unkurtash project. An executive summary of the Scoping Study will be available shortly on the Company's website (www.highlandgold.com) (www.highlandgold.com).

Located in the Republic of Kyrgyzstan in Central Asia, the Unkurtash license area covers three well-explored deposits - Unkurtash, Karatube and Sarytube - with previously-published JORC-compliant mineral resources (measured, indicated and inferred) of 3.5 Moz of gold at 1.82 g/t (IMC Montan, 2013). The project is situated in an area that already features operating mines and has access to paved roads, power and water supply.

Scoping Study highlights:

• 18-year life of mine with annual production of ~133k ounces.
• NPV of US$ 200 M at a 10% discount rate, and an IRR of ~19% assuming a long-term gold price of US$ 1,200/oz.
• Estimated average operating costs of $616/oz.
• Mining plan envisioning two open pits of similar size.
• Processing plant utilizing gravity concentration and gravity tailings CIL with an annual throughput of 4 million tonnes and recoveries of over 80%.
• Capital expenditures for project development pegged at US$ 322 million.

Highland Gold acquired 100% of Unkurtash from Barrick Gold in 2006 and has since spent US$ 38 million on extensive exploration of the site. Local-standard (GKZ) reserve estimates and a local-format pre-feasibility study have already been submitted to and approved by Kyrgyz regulators.

The Company is considering various alternatives for proceeding with the project, including partnering with another strategic investor to co-develop Unkurtash.

Information contained in this release has been taken from the report 'A Scoping Study for the Unkurtash Project, Kyrgyzstan' and prepared in compliance to the JORC Code 2012 by a panel of qualified industry experts of SRK Consulting (Kazakhstan) Limited for Highland Exploration LLC. The Scoping Study has been signed off by Mr. Mike Beare of SRK, who has verified the information pertaining to the Scoping Study in this release. Mr Beare has sufficient experience relevant to the style of mineralisation and type of deposit under consideration to qualify as Competent Persons as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'.