Interim Results Announcement for H1 2006

21.09.2006

London. Highland Gold Mining Limited “Highland Gold” or the “Company” announces its interim results for the first half of the financial year to 30 June 2006.

Financial Summary

    H1 2006   H1 2005
Restated
  2005
Restated
Financial (US$ millions; UK GAAP)            
Turnover   $53.8   $28.3   $76.0
Cash flow from trading (before w/c)   $10.9   $0.9   $4.8
Group Operating Profit/(Loss)   $4.2   $(1.7)   $(4.3)
Net loss   $(0.2)   $(7.2)   $(8.4)
Loss per share (cents)   (0.1)   (4.8)   (5.5)
Capital expenditure   $15.4   $24.8   $56.1
Operating            
Gold sold (ounces)   85,567   63,333   162,179
MNV - Cash operating cost ($/ounce)   $306   $318   $275
MNV - Total cash cost ($/ounce)   $344   $349   $306


Highlights

  • Turnaround in operating profit to $4.2m from a loss of $1.7m in H1 2005
  • Gold revenues increased by 90.1% over H1 2005 to $53.8 million on sales of 85,567 ounces
  • Total production of 91,205 ounces of gold – up 43% on H1 2005 (63,749 ounces)
  • MNV produced 79,444 ounces – 53% up on H1 2005 (51,979 ounces)
  • Unit costs at MNV were contained despite upward pressure on operating costs
  • Darasun back in production since the tragic fire – impact on H2 unknown at present time
  • Strengthening of operating management team continues by employing Russian and expatriate specialists
  • Development and Exploration Projects all progressed well - scoping study for Taseevskoye due by year-end and bankable feasibility study for Mayskoye in 2007.

The Directors, commenting on today's announcement, said that “the recent tragedy at our Darasun Mine has marred an otherwise positive period for our Company. Further to the Company’s statement of last week the Directors again express their condolences to all the families, friends and colleagues of the victims of the disaster.

“The Board is also grateful to management, employees, the rescue services and government agencies for their huge effort during the rescue operation.

“The Board is satisfied that many of the key strategic decisions made by the new management team have now been instigated and are beginning to have a positive effect on the overall business of the group”.

Highland Gold will hold a conference call at 09.00 UK time on Thursday 21st September.

     Participant Dial In Numbers:   International: +44 (0) 1452 587 356
UK National: 0871 871 0047
     Conference ID Number:   6988365

The Interim Report to 30 June 2006 will be available on our website from 30 September.