Company Information for Highland Gold Mining Ltd

AIM-HGM

http://www.highlandgold.com

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AIM; HGM

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Company Statement

Highland Gold Mining Limited was incorporated in Jersey on 23 May 2002 for the purpose of acquiring, consolidating and developing a portfolio of quality gold mining projects in the Russian Federation with good growth potential.

Highland’s vision is to become the most profitable gold mining company in Russia and Central Asia with a firm commitment towards safety, health and the environment, and social responsibility towards employees and communities.

Highland Gold Mining is a well established gold producer with a world class Russian asset base of producing, development and exploration projects. It has strong management and operational teams with local and international expertise and an exciting portfolio of resources estimated at 15.7 million oz. We have an unrivalled pipeline of growth projects and focus on extensive exploration.

Highland Gold owns the fully operational Mnogovershinnoe mine (MNV) in the Khabarovsk Region; three development projects - Novoshirokinskoye and Taseevskoye (Chita Region), and Mayskoye (Chukotka); six exploration areas - Belaya Gora, Iska and Maya Inikan in the Khabarovsk Region, Lubavinskoye-Malo-Fedorovskoye in the Chita Region, Sovinoye in Chukotka and Unkurtash in Kyrgyzstan (Central Asia).

Highland Gold has 325,197,098 common shares in issue which, since December 2002, have traded on AIM in London under the symbol "HGM". Main shareholders are Millhouse LLC, Barrick Gold Corporation and Company’s management.

Current Operations

Novoshirokinskoye
The deposit at Novoshirokinskoye (Novo) in Chita Region of Eastern Siberia was discovered in 1951 and extensively explored between 1956 and 1962. A development plan for a base metal mine was formulated in 1969 and construction of the project began in 1970. The construction work progressed slowly and was suspended in the 1970s. A modified development plan which proposed a production rate of 450,000 tonnes per annum of ore was approved in 1988, but construction was again suspended in 1994, after the majority of the construction work was complete, due to the prevailing economic conditions and the termination of centralised state funding.

Prior to acquisition in 2002 the Novo mine had been researched and extensively developed to produce primarily zinc and lead, with gold and silver as by-products. At the beginning of 2003, the Group commissioned a feasibility study to review both the ore body and the existing plant to prioritise gold production.

In the end of 2005 HGM submitted a report on recalculated Novo resources to the State Committee for Reserves for expertise. The expertise pointed out a number of defects and the report was returned for improvements.

Mnogovershinnoe Mine
Mnogovershinnoe is located in the Nikolaevsk area of the Khabarovsk Territory in the far-east of the Russian Federation. The mine is located some 650 km north of the city of Khabarovsk and is accessed from Nikolaevsk-na-Amure, the principal regional centre, via a 132 km long gravel road.
The Mnogovershinnoe deposit was discovered in 1959 and detailed exploration commenced in 1963. Preliminary construction started in 1979, the mineral processing facilities were constructed between 1990 and 1993 and preliminary production started in 1991. Between 1991 and the present day the mine has produced some 700,000 oz of gold.

The Group owns 100% of the MNV joint-stock company, which has a licence for the extraction of gold ore valid until December 2018. Operations at MNV consist of both underground and open-pit mining of several high grade gold deposits. In addition, MNV has its own gold processing plant. MNV was initially brought into production by its previous owners in 1991 and operated until 1997, when the mine was closed due to poor technical and financial performance and a lack of funds for reconstruction and development. Following a change of ownership and the introduction of the current management team, gold mining and gold extraction recommenced in 1999 under the direction of the new management team. Subsequent capital investment in mining and metallurgical equipment, has meant that the technical performance of the mine has significantly improved over the last five years.

Taseevskoye
The Taseevskoye deposit is located two kilometres south of the town of Baley (Population: 13,800) in the Chita region, Eastern Siberia. It lies 56 kilometres south by paved road from the Trans Siberian Railway station at Priiskovaya. Chita, the regional capital, is located 320 kilometres to the west of Baley. The deposit was discovered in 1941 and during the period 1948 to 1994 produced 6.4 million ounces of gold from 16.3 million tonnes of ore at an average gold grade of 12.2 g/t. This was produced from a swarm of epithermal gold bearing quartz fissure veins located within a circular area 1000m in diameter. The predominantly underground mining operation concentrated on three principal vein systems, leaving un-mined a large lower grade mineralized envelope contained within an argillic alteration halo surrounding the fissure veins. Highland Gold’s acquisition of Taseevskoye is rooted in the potential for open pit mining of this large lower grade resource, which was also the subject of a 1997 bankable feasibility study commissioned by the former licence holders.

Geographical Spread

Russia

Board of Directors and Key Management

Board of Directors
Duncan Baxter	Non-Executive Chairman
Alex Davidson	Non-Executive Director
Ivan Koulakov	Non-Executive Director
Nicholas Nikolakakis	Non-Executive Director
Olga Pokrovskaya	Non-Executive Director
Terry Robinson	Non-Executive Director	Chairman of the Audit Committee
Eugene Shvidler	Non-Executive Director

Senior Management
Valery Oif	CEO
Sergey Lysakov	Managing Director, Mnogovershinnoye
Sergey Yakimov	Managing Director,Novoshirokinsky Rudnik
Alexander Kiselev	Managing Director, Mayskoye

Company Address

26 New Street
St. Helier, Jersey, Channel Islands, United Kingdom JE2 3RA


Telephone:	+44(0) 1534 814202
Facsimile:	+44 (0) 1534 814 815
Email:	info[at]highlandgold.com
Website:	http://www.highlandgold.com

Additional Address/Key Contact

Russdragmet (management company)
7, Balchug Street
Moscow 115035 Russia
Tel: +(7 495) 424-95-21
Fax: +(7 495) 424-95-22
info@russdragmet.ru
Dmitry Yakushkin
Communications Director

Capital

Number or % of shares
Issued shares; 325,197,098
Shares not in public hands; 66.9% (May 2008)

Year End

December 31

Nominated Brokers

JP Morgan Cazenove

Nominated Advisors

JP Morgan Cazenove

Broker/Analyst Reports

04/12/07 - Fox Davies Capital Flash Note

Major Shareholders

Millhouse LLC

Barrick Gold

Board & Management

Most Recent Statement

06/05/09 - Second Price Monitoring Extn
06/05/09 - Price Monitoring Extension
30/04/09 - Annual Financial Report
05/02/09 - Trading Update February, 2009
03/02/09 - Blocklisting Interim Review
10/12/08 - Highland Gold Corporate Development Update

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