OREANDA-NEWS. September 21, 2012. Highland Gold Mining Limited (“Highland Gold” or the “Company”) announces its production figures and financial results for the half year ended 30 June 2012.

FINANCIAL SUMMARY

IFRS, USD 000 (unless stated)

H1 2012

FY 2011

H1 2011

Production (gold and gold eq.oz)

101,900

184,102

93,057

Gold sales (gold and gold eq.oz)

102,036

190,655

104,911

Group total cash costs (USD /oz)

804

594

531

Revenue

161,453

300,181

158,085

Gross profit

58,002

154,495

85,355

EBITDA

65,696

157,118

88,068

Earnings per share (USD )

0.139

0.319

0.216

Net cash inflow from operations

63,264

116,930

77,778

Capital expenditure

47,073

65,611

31,388

Cash and short term investments

150,793

126,746

272,233

HIGHLIGHTS

Financial:

Group revenue rose 2.1% to USD 161.5 million in H1 2012 (H1 2011: USD 158.1 million). As the result of a “no hedge” policy the Group fully participated in stronger spot gold prices and also benefited from the higher attributable metal production from Novo in line with its increased equity interest. The average price received for gold and gold equivalents, including Novo, during H1 2012 recorded a near 5% advance to USD 1,537 per oz compared with USD 1,464 per oz in H1 2011

The Group’s cost of sales totalled USD 103.5 million (H1 2011: USD 72.7 million) reflecting respective increases in open pit waste stripping and ore tonnes processed at MNV and ore tonnes mined and processed at Novo

EBITDA declined 25.4% to USD 65.7 million (H1 2011: USD 88.1 million) due to the higher cost of sales

Total cash costs amounted to USD 804 per oz compared with USD 531 per oz in H1 2011. This increase largely reflected the higher waste stripping volumes at MNV and a decrease in the average gold grade delivered for processing at MNV and Novo

Cash, short term deposits and bonds totalled USD 150.8 million as at 30 June 2012 compared with USD 272.2 million as at 30 June 2011. This reflected the acquisition of the additional interest in Novo and higher capital expenditure of USD 47.1 million in H1 2012 compared with USD 31.4 million in H1 2011

Interim special dividend of Ј0.048 per share

Producing Mines:

Combined production of gold and gold equivalents from Mnogovershinnoye (“MNV”), Novoshirokinskoye (“Novo”) (97.5% interest) and Belaya Gora totalled 101,900 oz – a 9.5% increase compared with H1 2011

On track to produce 200,000 – 215,000 oz of gold and gold equivalents in 2012

Production ramp up at Novo resulted in a 6% increase in processed tonnes compared with H1 2011

A 16% increase in total JORC compliant resources to 12.9 Moz, through exploration and acquisition, compared with stated figures as at 31 December 2011

Development and Exploration Sites:

Construction of the Belaya Gora stand-alone processing facility remains on track for commissioning in Q4 2012

Exploration drilling and underground development results at Unkurtash support potential continuity of mineralisation along strike and at depth

Exploration programme at MNV continued to target potential resources adjacent to existing operations (Watershed, Pebble/Quiet zones)

Continuation of exploratory drill works and underground development at Unkurtash designed to expand the resource base. Approval of mining licence by the Kyrgyzstan Government authorities paves the way for project development

Submission of Lyubov documentation to GKZ regulatory authorities and the commencement of an independent JORC resource audit