Interim Results Announcement for the Six Months to 30 June 2003

24.09.2003

Financial Highlights

  • Turnover was up 14.6% at US$31.4m (H2 2002: US$27.4m)
  • Net profit was up 57.4% to US$8.5 m (H2 2002: US$5.4m*)
  • Earnings per share grew by 48.1% to 7.7 US cents (H2 2002: 5.2 US cents)
  • Net operating cash flow decreased by 18.6% to US$5.7m (H2 2002: US$7.0m)
  • Capital expenditure increased 56% to US$13.1m (H2 2002: US$8.4m)
  • Interim dividend up to 1.5 US cents per share (H2 2002: 1.0 US cents)

(*) Net profit for H2 2002 has been restated, a reduction of US$1.7 million, due to a change in accounting policy in respect of stripping costs.


Business Highlights

  • Total gold production up 3.4% to 90,133 oz (H2 2002: 87,281oz)
  • Cash operating costs down by 4.4% to US$152 per oz (H2 2002: US$159 per oz)
  • Darasun construction on track for initial production H1 2004
  • Purchase of outstanding assets at MNV for US$26.7m, previously leased from the Khabarovsk Administration
  • Resource based doubled by Mayskoye deposit - 9 million oz - acquired for US$34.9m

Commenting on the results, Ivan Koulakov, Managing Director, Highland Gold, said,

“In the first half Highland Gold comfortably met its production targets while successfully executing the planned transition to new ore bodies at the MNV mine. At the same time, management made further progress on our two development projects, Darasun and Novoshirokinskoye, and these remain on course for initial production in the first half of 2004 and 2005 respectively.”

Peter Daresbury, Executive Chairman, Highland Gold, said,

“This has been an impressive first half for Highland Gold, with the Group developing momentum following its flotation in December 2002.

“Since the period end we have announced a major acquisition, the high grade Mayskoye deposit, which will double the resource base of the Group to 17 million oz. We have also successfully purchased the operating assets at MNV that were previously leased.

“Highland Gold is well positioned to deliver its production and development programme for the rest of 2003, and to develop further its position as a low cost gold producer with sound growth prospects. The Board’s confidence is reflected in the decision to raise the interim dividend to 1.5 US cents per share.”

Enquiries: 020 7404 5959
Highland Gold Peter Daresbury, Executive Chairman
Ivan Koulakov, Managing Director
Brunswick Patrick Handley
Alison Howard