Interim Results Announcement for H1 2011

20.09.2011

View the full results announcement (PDF - 296 Kb)

20 September 2011 - Highland Gold Mining Limited ("Highland Gold", or the "Company") announces its production and financial results for the half year ended 30 June 2011.

FINANCIAL SUMMARY

IFRS, US$000 (unless stated) H1 2011 H1 2010
Production (gold and gold eq. oz) 93,057 85,789
Total Group cash costs (US$/oz) 531 518
Revenue 158,085 100,473
Gross profit 85,355 43,226
EBITDA 88,068 46,687
Net profit after tax 70,296 23,334
Earnings per share (US$) 0.216 0.072
Net cash inflow from operations 77,778 37,449
Capital expenditure 31,388 13,685
Cash, short term deposits and bonds 272,233 216,484

HIGHLIGHTS

Financial:

  • Net profit after tax tripled year-on-year to US$70.3 million (H1 2010: US$23.3 million) and resulted in earnings per share of US$0.216 (H1 2010: US$0.072), demonstrating the Company's leverage to higher gold prices
  • EBITDA was US$88.1 million (H1 2010: US$46.7 million), an 88.6% increase due to increased production, gold sales volumes and higher realised prices
  • Total group cash costs were contained at US$531/oz (H1 2010: US$518/oz), despite inflationary cost pressures
  • Cash margins expanded significantly to US$922/oz (H1 2010: US$645/oz) as the Company is unhedged and fully participated in the increase in gold prices
  • Cash, short term deposits and bonds at June 30, 2011 were US$272.2 million (H1 2010: US$216.5 million) due to the generation of strong net cash inflow from operations
  • An interim dividend payable of 5.0 pence per share (H1 2010: £nil per share), consisting of an ordinary dividend of 2.5 pence and a special dividend of 2.5 pence per share

Producing Mines:

  • Mnogovershinnoye ("MNV"), Novoshirokinskoye ("Novo") (48.3% shareholding) and Belaya Gora combined produced 93,057 oz of gold and gold equivalents - an 8.5% increase on H1 2010 production
  • New JORC compliant audit increased MNV reserves by 190%
  • Novo continued production ramp up resulting in a 33% increase in processed tonnes compared to H1 2010
  • The Company remains on track to produce 210,000 - 220,000 oz of gold and gold equivalents in 2011

Development and Exploration Sites:

Belaya Gora select oxide ore processing via MNV continued during the first half of 2011 and pre-construction preparations for a stand-alone processing facility remained on track with the submission of design documentation to Federal authorities

  • MNV exploration programme continued to target potential resources adjacent to existing operations
  • 1.38 million oz of C1+C2 reserves at Unkurtash approved by the State Committee on Reserves in Kyrgyzstan
  • Exploration drilling and underground development results at Unkurtash support potential continuity of mineralisation along strike and at depth
  • Exploration work at Lyubov being compiled for GKZ regulatory submission and commencement of JORC audit by year end 2011
  • Blagodatnoye and Belaya Gora Flanks exploration properties continue to provide positive drilling intercepts

CONFERENCE CALL DETAILS

The Company will hold a conference call on Tuesday, 20 September 2011 hosted by Valery Oyf, CEO to discuss the interim results. The conference call will take place at 8.30 UK time (11.30 Moscow). To participate in the conference call, please dial one of the following toll-free numbers:

UK Free Call 8000 440 189

UK Local Call 0844 493 38 00

UK Standard International + 44(0) 14 52 55 55 66

Russia Free Call 8108 002 097 2044

USA Free Call 1866 966 9439

Conference ID 1167 08 19

A replay of the presentation will be accessible shortly afterwards by dialing one of the following numbers:

International Dial In: +44 (0) 1452 55 00 00

UK Free Call Dial In: 0800 953 1533

UK Local Dial In: 0845 245 5205

USA Free Call Dial In: 1866 247 4222

Encore Replay Access Number: 11670819#

For further information please contact:

Highland Gold
Duncan Baxter, Chairman - + 44 (0) 1534 814202
Dmitry Yakushkin, Head of Communications - +7 495 4249521

Matrix (Nominated Adviser)
Nick Stone - + 44 (0) 203 206 7000
Stephen Mischler - + 44 (0) 203 206 7000

www.highlandgold.com

The Interim Report to 30 June 2011 will be available on our website from 21 September 2011.