Final Results for the Year Ended 31 December 2006

23.04.2007

Highland Gold Mining Limited “Highland Gold” or the “Company” announces its final results for the full year ended 31 December 2006. FINANCIAL HIGHLIGHTS

UK GAAP, US$000 (unless stated)    
  2006 * 2005
restated
Production (oz) 167,544 160,216
Turnover 102,365 75,955
Group operating loss (98,340) (7,753)
Loss on ordinary activities before taxation (83,202) (14,063)
Loss for the financial period (96,445) (11,830)
Earnings per share (cents) (59.7) (7.7)
Total assets 388,906 368,547
Net cash flow from operations 7,041 7,751
Capital expenditure (38,911) (56,143)
Dividends per share Nil Nil

* Darasun’s after tax operating loss was $101.454 million. Of this number, $79.274 million relates to a non-cash impairment of Darasun and $2.373 million is attributable to certain costs directly associated with the Darasun fire. Full Year Highlights

    • Darasun placed on care and maintenance
    • Gold production for 2006 was 167,544 ounces including 151,146oz from MNV; an 8% increase on gold production compared to 2005
    • Transaction with Barrick Gold consolidates assets and strengthens Board and Management team
    • A joint venture with Kazzinc at Novoshirokinskoye was established
    • Evaluation studies at Darasun underway
    • Taseevskoye: phase one exploration drilling programme and in-house scoping study completed
    • Mayskoye: progress on feasibility study; favourable results for metallurgical test work on bio-oxidation.
    • Drilling completed at Belaya Gora and Lyubov; preparatory work for reverse circulation drilling completed at Unkurtash.



Post year end:

  • Debt restructured - US$90 million in new financing facilities raised through two major Russian banks

Commenting on today’s announcement, James Cross, Chairman, said: “The 2006 results were significantly impacted by the Darasun impairment adjustment. Notwithstanding, 2006 marks a turning point for Highland Gold and will be a year remembered as one where we put in place many of the key building blocks to secure the Company’s long term future. By far the most significant of these was the increased commitment from Barrick Gold. Barrick brings to Highland great strengths as a world-leader in building and operating mines. Combining their technical expertise with our own assets and experience in Russian gold-mining business, means that we are now in a stronger position to focus on maximising the value of our current operations, and accelerating our development projects.” The Company will hold a conference call on Monday, 23 April 2007 hosted by James Cross, 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:

UK National Dial in: 0871 871 0047
International Dial in: +44 (0) 1452 587 356
   
Conference ID / Access code: 6114623

A recording of the presentation will be available by dialing +44 (0) 1452 55 00 00 (using the same access code) from Monday afternoon for 1 week, and will be accessible on the company website: www.highlandgold.com shortly after.

For further information please contact:  
  Henry Horne, Managing Director
  Dmitry Yakushkin, Director of Communications
  Moscow: + 7 (495) 777 31 55
  Dominic Palmer-Tomkinson,
  Head of Investor Relations
  London: +44 (0) 207 851 64 00
  Or, WMC Communications,
  Alex Glover on +44 20 7930 9030

The Annual General Meeting will be held on 7 June 2007.