Highland Gold Acquires Licence for the Belaya Gora Flanks

19.07.2010

Highland Gold Mining Limited ("Highland Gold", or the "Company") is pleased to announce that the Company has acquired a licence for exploration and mining rights for an area of 33 km sq surrounding the Company's Belaya Gora deposit in the Khabarovsk Region. The acquisition was made in an open auction on July 15 in Khabarovsk for a bid price of 5.520 million roubles (US$ 180,752).

The Belaya Gora Flanks (BGF) license covers an area which encapsulates the Belaya Gora deposit and represents excellent near-mine exploration potential for planned operations there. This acquisition underlines the Company's commitment to the development of the Belaya Gora mine and has the potential to increase the resource base at Belaya Gora. The mine is currently undergoing a JORC compliant resource audit of the GKZ-registered C1+C2 reserve of 820,000 oz contained in 7.3 million tonnes of ore with an average grade of 3.5 g/t of gold.

The Belaya Gora development project remains on track to deliver ore to the MNV processing plant during H2 2010 with 100,000 tonnes of high grade ore being trucked to MNV contributing approximately 15 000 oz of gold to the Company's planned annual production in 2010.

The BGF licence area was partially explored in the past and historical data notes a reported prognostic resource estimate of 200,000 oz of gold. The area hosts several known prospects with linear zones of vein-type and stockwork gold mineralisation with reported grades ranging between 1g/t and 3g/t and noted highlights up to 20 g/t. In addition the BGF licence covers a number of underexplored hydrothermally altered intrusives potentially hosting similar gold mineralisation as at Belaya Gora representing primary exploration targets.

Licence terms for the BGF property include exploration and development for a total licence period of 20 years. A multi-disciplinary exploration programme is being designed which will include trenching and drilling programmes for verifying and expanding the known mineralised prospects as well as testing of unexplored areas.

The Belaya Gora Flanks together with the resource potential from the neighbouring Blagodatnoye and Iska properties will further contribute to the development of the Company's strategic hub in the Khabarovsk region.

For further information please contact:

Highland Gold Dmitry Yakushkin, Head of Communications - +7 495 424 95 21
Duncan Baxter, Chairman - +44 (0) 1534 814202
Fin Public Relations Alex Glover - +44 (0) 207 608 22 80
J.P.Morgan Cazenove Michael Wentworth-Stanley, Managing Director
(Nominated Advisor) +44 (0) 207 588 28 28
Matrix Corporate Capital Robin Henshall, Partner - +44 (0) 203 206 71 72
(Joint Broker) Alastair Stratton, Partner - +44 (0) 203 206 72 04