Highland Gold Reports JORC-compliant Resources at the Lyubov Project

01.10.2012

Highland Gold Mining Limited (“Highland Gold”, or the “Company”) announces results fr om a JORC compliant mineral resource audit carried out by the independent consultancy IMC Montan at the Company’s Lyubov project located in the Zabaikalsky region in Eastern Siberia. The audit results define a total mineral resource of 0.48 Moz (98% measured and indicated). This increases the Company's total JORC compliant mineral resource base as recorded at 31 December 2011 by 4% to 13.3 Moz of gold.

The Lyubov project is targeting a near surface bulk-mineable gold resource for a potential open-pit mining operation. The property license includes the Evgraf prospect which has been the focus of the Company’s previous exploration activities including more than 20,000 metres of core drilling.

The Evgraf prospect is characterised by stockwork-type mineralisation wh ere gold is associated with disseminated quartz-sulphide veinlets localised within a granitic stock and surrounding shales. Previous test work has indicated favourable metallurgy and gold recovery levels via conventional processing methods including heap leaching. The mineral resource estimate included results fr om block modelling up to approximately 250 metres from surface.

Lyubov Project - Evgraf Prospect - Mineral Resources Reported in Accordance with JORC
Resource Category Ore
['000 tonnes]
Average Grade
[g/t]
Contained Gold
[kg]
Contained Gold
[ounces]
Measured 1305 1.50 1952 62,758
Indicated 9803 1.31 12856 413,330
Measured+Indicated 11108 1.33 14808 476,088
Inferred 140 1.83 255 8,198
Total Resources 11247 1.34 15063 484,287

(Resource calculation based on minimum grade of 0.5 g/t per cell in block model)

In respect of the Evgraf prospect the Company has also submitted a pre-feasibility study including a reserve calculation to the regulatory authorities. A C1+C2 category reserve of approximately 0.5 Moz is to be considered for reserve registration by the State Committee on Reserves of the Russian Federation (GKZ). Approval is anticipated in Q4 2012.

The Lyubov project is entering the development stage and engineering studies in relation to conventional processing options, including heap leaching, have been initiated.

IMC Montan (International Economic and Energy Consulting) consultants Mr. Neil Scott (Member of the Institution of Materials, Minerals and Mining; Bachelor of Science; Certified Engineer) and Mr. John Bacharach (Fellow of the Institution of Materials, Minerals and Mining; Associate of the Royal School of Mines; Bachelor of Science; Certified Engineer) have provided and verified information contained in this release with respect to drilling and resource / reserves. They are qualified as Competent Persons as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.

For further information please contact:

Highland Gold
Dmitry Yakushkin, Head of Communications
Duncan Baxter, Non-executive Director

+ 7 495 424 95 21
+ 44 (0) 1534 814 202
   
Numis Securities Lim ited:
Alastair Stratton / Stuart Skinner, Corporate Finance
James Black, Corporate Broking
+44 (0) 207 260 1000