Final Results for the Year Ended 31 December 2008

30.04.2009

Highland Gold Mining Limited ("Highland Gold" or the "Company") announces its final results for the full year ended 31 December 2008.

FINANCIAL HIGHLIGHTS

IFRS, US$'000 (unless stated) 2008 2007 (restated)
Production (oz) 158,885 156,474
Total cash costs (US$) 560 469
Turnover 150,449 112,100
Gross profit 45,518 34,772
(Loss)/profit for the year (226,254) 17,450
(Loss)/Earnings per share (US$) (0.701) 0.088
Net cash inflow/(outflow) from operations 23,395 (24,854)
Capital expenditure 146,122 73,947
Net cash (outfow)/inflow (38,213) 179,699

2008 KEY EVENTS

  • Gross profit of US$45.5 million achieved in 2008, a 30.9% increase from 2007
  • Second Subscription with Millhouse LLC completed with total proceeds forming an essential component of the Company's funding
  • Cash and short term deposits of US$173.1 million at 31 December 2008
  • Mnogovershinnoye (MNV) produced 158,885 ounces of gold in 2008, an 1.5% increase from 2007
  • Board and management composition significantly changed
  • New team continues to conduct a detailed review of all operations and development assets to establish priorities under difficult market conditions
  • With agreement of Kazzinc commissioning of Novoshirokinskoye postponed to later date
  • Work on other development projects slowed down until possibilities for funding increase
  • Company confirms acquisition of additional producing assets in Russia and the CIS countries as a strategic goal

Post Year End

  • Mayskoye development project sold for a consideration of US$105 million

2009 Goals

  • Forecasted production at MNV in the range of 155,000 -165,000 oz of gold at cash costs of US$535 per oz
  • Extension of mine life of the MNV project upon completion of exploration works
  • Ensure best use of cash and pursue joint venture and acquisition opportunities

Commenting on today's announcement, Duncan Baxter, Non-Executive Chairman said: "Against a backdrop of prolonged uncertainty we will continue to take prudent steps to preserve the balance sheet and create value for our shareholders. We continue to review opportunities to acquire producing gold assets in Russia and the CIS. The Board and management with its mix of mining expertise and Russian knowledge and influence is strongly placed to pursue this growth strategy."

The Company will hold a conference call on Thursday, 30 April 2009 hosted by Olga Pokrovskaya, Non-Executive Director, Valeryi Oif, CEO, to discuss the final results. The conference call will take place at 10.30 UK time (13.30 Moscow) and a slide presentation to accompany the presentation of results will be available for downloading on the Company's website. To participate in the conference call please dial one of the following numbers:

UK Local Call : 0844 493 3800
UK Standard International : +44 (0) 1452 555 566
Conference ID : 97853058

A replay of the presentation will be accessible shortly afterwards by dialing one of the following numbers:

International Dial in: : +44 (0) 1452 55 00 00
UK Free Call Dial In : 0800 953 1533
UK Local Dial In : 0845 245 5205
USA Free Call Dial In : 1866 247 4222
Encore Replay Access Number : 97853058#

For further information please contact:

Highland Gold Duncan Baxter, Chairman - + 44 (0) 1534 814202
  Dmitry Yakushkin, Head of Communications - +7 495 4249521
Fin Public Relations Alex Glover - +44 (0) 207 608 2280
Smith's - Investor Relations Dominic Palmer-Tomkinson - +44 (0) 207 239 0140
J.P. Morgan Cazenove (Nominated Adviser) Michael Wentworth-Stanley, Managing Director
  Sam Critchlow - +44 (0) 207 588 2828

www.highlandgold.com

The Annual General meeting will be held on 18 June 2009.