Final Results for the Year Ended 31 December 2005

26.04.2006

Highlights

  FY 2005 FY 2004
  US$000s
(unless stated)
US$000s
(unless stated)
Production (ounces) 160,216 199,896
Turnover 75,955 82,062
EBITDA* 4,787 25,610
Operating profit (loss) (3,097) 18,784
Profit (loss) before tax (9,407) 14,229
Net profit (loss) (7,174) 5,011
Earnings (loss) per share (cents) (4) 4
Total assets 374,219 337,017
Net cash flow from operations 7,751 10,455
Capital expenditure 56,143 69,168
Dividend per share (cents) Nil 2

*EBITDA equals to cash generated from operating activity.

  • Gold production for 2005 was 160,216 ounces (MNV 140,038; Darasun 20,178)
  • Significant turnaround during the second half at MNV
  • Commissioned the Darasun mill in September 2005
  • Expanded partnership with Barrick Gold - the Taseevskoye JV was established subject to certain Russian regulatory approval.
  • Taseevskoye production capacity extended by licences for Sredne-Golgotayskoye and ZIF-1 tailings
  • Obtained exploration licences for Belaya Gora, Sovinoye and Malo-Fedorovskoye
  • JORC resource calculations for Mayskoye and Taseevskoye completed
  • US$50 million equity subscription by Barrick Gold
  • Rouble bond issued equivalent to US$26.8 million to fund further development
  • Strengthened board and management team

Commenting on today’s results, James Cross, Chairman said: “While 2005 was clearly a difficult year for Highland Gold, we have made a number of key management appointments and introduced new processes and controls which are already having a beneficial impact on the business. In 2006, we expect to complete our restructuring programme and further the development and exploration projects we have in partnership with Barrick Gold.”

The Company will hold a conference call on Wednesday, 26 April 2006, hosted by Ivan Koulakov, Deputy Chairman and Henry Horne, Managing Director to discuss the final results. The conference call will take place at 10:00 am UK time (1:00 pm Moscow).

To participate in the conference call, please dial one of the following numbers:

0800 953 1444 U.K. toll-free number
1866 220 1452 USA toll-free number
+44 (0) 1452 542 300 International dial in number

A replay of the conference will be available after the call’s completion for a period of one week by calling one of the numbers below and quoting Conference ID 8509755#:

0800 953 1533 U.K. toll-free number
1866 247 4222 USA toll-free number
+44 (0) 1452 550 000 International dial in number

A copy of the presentation will be available on www.highlandgold.com.Financial Calendar

Post 2005 Annual Report 12 May 2006
Annual General Meeting 07 June 2006
2006 Interim Announcement September 2006
2006 Interim Report and Accounts October 2006
Enquiries: London: +44 (0) 207 851 6400
  Moscow: +7 (495) 777 5529
  +7 (495) 723 5836
  E-mail: info@highlandgold.com
  Henry Horne, Managing Director
  Dimitry Yakushkin, Director of Communications