Interim Results for the First Half of 2015

23.09.2015

Highland Gold Mining Limited (“Highland Gold”, the “Company” or “Group”) announces its unaudited financial results and production figures for the half year ended 30 June 2015.

View the full results announcement (PDF - 1.01 Mb)

 

FINANCIAL SUMMARY IFRS, US$000 (unless stated)

H1 2015

H1 2014

Gold sold (gold and gold eq. oz)

119,277

116,567

Total Group cash costs (US$/oz)

538

689

Group all-in sustaining costs (US$/oz)

710

900

Revenue

130,740

142,240

Operating profit

18,778

26,268

Net profit

14,466

20,307

Normalised net profit

14,466

14,685*

EBITDA

54,885

48,375

Earnings per share (US$)

0.044

0.062

Net cash inflow from operations

56,523

64,495

Capital expenditure

18,153

36,429

Net debt position

231,029

239,242

* Net profit as previously reported for H1 2014 has been re-presented to exclude a one-off gain on settlement of contingent consideration amounting to US$5.6 million.

The interim condensed consolidated financial statements of Highland Gold for the six months ended 30 June 2015 are set out below.

H1 2015 HIGHLIGHTS

Financial & Operations

• Total H1 2015 production of 121,242 oz of gold and gold equivalents at Mnogovershinnoye (“MNV”), Novoshirokinskoye (“Novo”), and Belaya Gora, a 0.9% increase from 120,121 oz in H1 2014.

• H1 2015 EBITDA was US$54.9 million, an increase of 13.5% compared to H1 2014, driven mainly by RUR devaluation and strong cost performance and negatively adjusted by lower gold prices. EBITDA margin of 42.0% (34.0% in H1 2014).

• Total first half revenue fell by 8.1%, reflecting lower metals spot market prices during the period (average realised price for gold and gold equivalents of US$1,088 per oz in H1 2015 compared to US$1,210 in H1 2014).

• All-in sustaining costs (AISC) per ounce were 21.1% lower, helped by weakness in the Russian Rouble and increased throughput at Belaya Gora and Novo. Total cash costs (TCC) down by 21.8%. Both indicators demonstrate that the Group is one of the lowest-cost gold producers.

• Net debt to EBITDA ratio reduced to 1.8 as of 30 June 2015 from 2.0 a year earlier.

• Effective tenor of debt portfolio extended from 11 months to 22 months.

• Free cash flow (defined as net cash flows from operating activities less cash flows used in investing activities) was US$37.7 million compared to US$21.9 million h-o-h as the Company remained focused on free cash flow generation.

• Continued optimisation of operations at the Belaya Gora processing plant in H1, with gold recovery rates reaching 75.9% on average (20.9% higher than in H1 2014) and 80.9% in June.

• Steady operations at Novo, with ore processing volumes set to rise to an annual rate of 630,000 - 650,000 tonnes by year-end.

Development & Exploration

• Work on Kekura progressed as planned, including state approval of Russian-compliant reserves, finalisation of processing studies; and initiation of work on technical design documentation.

POST HALF YEAR EVENTS

• Exploration program, designed in H1, underway at MNV Lower Horizons licence.

• JORC audit of Kekura reserves in progress with results expected in H2.

• Interim dividend of £0.020 per share (H1 2014: Interim dividend of £0.025 per share)

 

CONFERENCE CALL DETAILS

The Company will hold a conference call on Wednesday, 23 September 2015, hosted by Valery Oyf, CEO, to discuss the interim results. The conference call will take place at 11 a.m. UK time (13:00 Moscow). To participate in the conference call, please dial one of the following toll-free numbers:

UK Free Call 0800 694 0257

UK Local Call 0844 493 3800

UK Standard International +44 (0) 1452 5555 66

Russian Federation 8 499 677 1040 \\ 8 800 775 68 18

USA Free Call 1866 966 9439

Conference ID 47083314

A replay of the presentation will be accessible shortly afterwards on Company's website

FOR FURTHER INFORMATION PLEASE CONTACT:

Highland Gold

John Mann, Head of Communications + 7 495 424 95 21

Duncan Baxter, Non-Executive Director + 44 (0) 1534 814 202

Numis Securities Limited (Nominated Adviser and Broker)

John Prior, James Black

Paul Gillam

+44 (0) 207 260 1000

Peat & Co (Joint Broker)

Charlie Peat +44 (0) 207 104 2334