Interim Results Announcement for H1 2016

26.09.2016

View the full results announcement (PDF - 985 Kb)

Highland Gold Mining Limited (“Highland Gold”, the “Company” or “Group”) today reports its unaudited financial results and production figures for the half year ended 30 June 2016 ("H1").

FINANCIAL SUMMARY

IFRS, US$000 (unless stated) H1 2016 H1 2015
Gold sold (gold and gold eq. oz) 127,697 119,277
Total Group cash costs (US$/oz) 444 538
Group all-in sustaining costs (US$/oz) 609 710
Revenue 147,097 130,740
Operating profit 50,420 18,778
Net profit 37,052 14,466
EBITDA* 79,720 54,885
EBITDA margin (%)* 54% 42%
Earnings per share (US$) 0.113 0.044
Net cash inflow from operations 18,814 18,153
Capital expenditure 239,242 177,604
Net debt position* 197,900 232,427

The interim condensed consolidated financial statements of Highland Gold for the six months ended 30 June 2016 are set out below.

H1 2016 HIGHLIGHTS

Financial

  • Total first half revenue rose 13% year-on-year to US$147.1 million, reflecting improved metals prices and increased sales volumes during the period.
  • H1 2016 EBITDA was US$ 79.7 million, an increase of 45% over H1 2015, while EBITDA margin rose to 54%.
  • All-in sustaining costs (AISC) per ounce fell by 14% to US$609/oz, assisted by ongoing weakness in the rouble and strict cost controls.
  • Free cash flow (defined as net cash flows from operating activities less cash flows used in investing activities) was US$60.7 million.
  • INet debt to EBITDA ratio reduced to 1.3 as of 30 June 2016 versus 1.7 as of 31 December 2016 as the Company directed free cash flow to debt repayment.

Operations

  • Total H1 2016 production of 128,671 oz of gold and gold equivalent at Mnogovershinnoye (MNV), Novoshirokinskoye (Novo), Belaya Gora, and Sredny Golgotay (Kaftan site), an increase of 6% from 121,242 oz in H1 2015.
  • MNV and Novo exceeded internal production targets for the quarter, while at Belaya Gora efforts to optimise operations were ongoing.
  • Exploration work continued on the Northern ore body at MNV, with reserves expected to receive approval from regulators by year-end.
  • Work commenced on the planned expansion of processing capacity at the Novo mill.
  • Pre-feasibility study completed for Kekura, and a subsequent fatal flaw review supported open pit and underground mine design plans.
  • Scoping studies initiated for the Baley Cluster Projects (Taseevskoye, Sredny Golgotay and ZIF-1 tailings) and Unkurtash, and a revised pre-feasibility study initiated for Klen. 

POST HALF YEAR EVENTS

  • Interim Dividend of £0.05 per share approved by the Board of Directors
  • The Company affirms its forecast for total production of gold and gold equivalent of 255,000-265,000 oz for the full year.

CONFERENCE CALL DETAILS

The Company will hold a simultaneous webcast and conference call to discuss the results, hosted by CEO Denis Alexandrov, on Monday, 26 September 2016 at 10:00 UK time (12:00 Moscow).

This event is being streamed. It is recommended that you listen via your computer speakers. The link for online registration is: http://engage.vevent.com/rt/webcasting/index.jsp?seid=746

To register to participate by telephone and to receive local dial-in numbers, please follow this link: http://emea.directeventreg.com/registration/87650126

For further information please contact:

Highland Gold

Communications Department
+ 7 495 424 95 21
Duncan Baxter, Non-Executive Director
+ 44 (0) 1534 814 202
Numis Securities Limited
(Nominated Adviser and Joint Broker)
John Prior, James Black
Paul Gillam
+44 (0) 207 260 1000
Peat & Co
(Joint Broker)
Charlie Peat
+44 (0) 207 104 2334