Highland Gold Commissions Novoshirokinskoye Mine

01.10.2009

Highland Gold Mining Limited (“Highland Gold” or the “Company”) announces today that the Novoshirokinskoye mine located in the Zabaikalsky Region of Eastern Siberia has begun production and, until the end of the year, work will focus on testing various processing technologies. Initially 30,000 tonnes of low grade stock piled ore will be processed, after which ore processing will be increased beginning in January 2010 with 280,000 tonnes of ore to be processed in the same year. Plant throughput is expected to achieve the processing capacity of 450,000 tonnes of ore per annum by 2011.

The mine will primarily produce lead and zinc concentrate with an annual output in the range of 20-28 thousand tonnes of lead concentrate, 8-9 thousand tonnes of zinc concentrate, 35-40 thousand ounces of gold and 700-800 thousand ounces of silver.

Micromine Consulting has completed a reserve/ resources reconciliation for the Novoshirokinskoye mine in 2008.

According to JORC standards, mineral reserves of the mine are as follows:

Category

Ore

Pb

Zn

Au

Ag

 

‘000 Tonnes

%

%

g/t

g/t

Proven

745

2.85

1.29

3.51

67.32

Probable

7 140

2.66

1.17

3.27

72.95

Total

7 885

2.68

1.18

3.29

72.42

According to JORC standards, mineral resources are as follows:


Category

Ore

Average grade

Resources

Pb

Zn

Au

Ag

Pb

Zn

Au

Ag

‘000 Tonnes

%

%

g/t

g/t

Tonnes

Tonnes

kg

kg

Measured

768

3.35

1.52

4.13

79.20

25 691

11 688

3 168

60 795

Indicated

7 361

3.13

1.38

3.85

85.82

230 179

101 871

28 373

631 683

Inferred

288

2.31

1.54

2.88

50.53

6649

4 436

828

14 557

Total

8 417

3.12

1.40

3.85

84.00

262 519

117 995

32 369

707 035

Production over the life of the mine is expected to be 1.5 million ounces in gold and gold equivalents.

Highland Gold Mining acquired the license for the project in 2004. An exploration programme was completed during 2004-2006 and reserves and resources were subsequently recalculated in accordance with international standards. Ore comminution tests as well as process research aimed at defining the most efficient technology were completed. During this period the processing plant construction design was prepared, construction of the shift camp was completed and works on the tailings storage facility were initiated.

In 2006 a joint-venture with Kazzinc (a large integrated lead and zinc producer operating in Kazakhstan) was formed in order to develop the project. The project was postponed in Q4 2008 due to the dramatic fall in base metal prices and a decision to commission was announced in August 2009 following the improved long term fundamentals of metal prices.

The mine will employ a workforce of 1,000 people and will play an important role in the region’s economy.

Mr. Werner Klemens, Head of Exploration at Highland Gold has reviewed and verified the information contained in this release in respect of drilling and resource matters. Mr. Klemens holds a Ph.D. in Geology from the University of Toronto. He has 11 years of experience in mineral exploration and is a fellow of the Geological Association of Canada.

Commenting on today’s announcement Valery Oif, CEO of Highland Gold, said: "Novoshirokinskoye is set to become the Company’s second producing mine, and we see today’s launch as an exciting step in Highland Gold’s development. This event underlines our strategy of steadily improving the Company’s efficiency and our ability to deliver new projects on schedule, once we have studied and verified their potential to generate revenue."

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 2280

Smith's

Dominic Palmer-Tomkinson - +44 (0) 207 239 0140

J.P. Morgan Cazenove (Nominated Adviser)

Michael Wentworth-Stanley, Managing Director

+ 44 (0) 207 588 2828