Highland Gold Confirms Sale of 50% of Its Novoshirokinskoye Stake to Kazzinc

24.10.2006 

Following the announcement on 5 October 2006, Highland Gold Mining Limited is pleased to announce that it signed an agreement with Kazzinc involving the sale of a 48.3% interest in its development project at Novoshirokinskoye (“Novo”) for a consideration of US$36 million in cash, subject to receipt of the normal regulatory approvals, which we anticipate will be by the end of November. Both parties will now proceed with work on establishing a project to optimise the revenue from production and sale of product from the Novo gold-polymetallic deposit.

Henry Horne, Managing Director of Highland Gold said, “We have undertaken a thorough investigation of the potential of the Novo property and came to the conclusion that alongside a highly specialised and experienced joint venture partner we would be able to maximise the resources in the area. We are delighted to have reached this agreement with such an experienced partner as Kazzinc. We are optimistic that the full potential of the deposit will now be achieved.”

For further information please contact:

   
Enquiries: 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
  E-mail: info@highlandgold.com
   
  Or, WMC Communications, Alex Glover on +44 20 7930 9030