Highland Gold to Increase Share in the Novoshirokinskoye Mine

23.11.2011

Highland Gold Mining Limited ("Highland Gold" or the "Company") is pleased to announce that an Agreement of Intent has been signed between Stanmix Holding Limited (a wholly owned subsidiary of the Company) and its joint venture partner LLP Kazzinc, ("Kazzinc") for the acquisition of Kazzinc's 48.3% share in the Open Joint Stock Company Novo-Shirokinskiy Rudnik, the owner of the Novoshirokinskoye mine ("Novo").

The total consideration for this transaction is US$110 million of which US$47 million accounts for Kazzinc's 48.3% share in Novo and US$63 million to be paid as repayment of Kazzinc's share of intercompany debt. The transaction is expected to complete prior to the year end following the approval by Russian anti-monopoly authorities and completion of definitive legal documentation and will result in the Company's stake in Novo increasing to 96.6%. A further detailed announcement will be released at that time.

For further information please contact:

Highland Gold Dmitry Yakushkin, Head of Communications - + 7 495 424 95 21
  Duncan Baxter, Chairman - + 44 (0) 1534 814202
   
Numis Securities Limited Alastair Stratton / Stuart Skinner, Corporate Finance - +44 (0) 207 260 1000
  James Black, Corporate Broking - +44 (0) 207 260 1000