Loan Agreement between ZAO Mnogovershinnoye and Commerzbank

19.08.2004

Highland Gold Mining Ltd, the AIM quoted gold producer, announces today that it has entered into a loan agreement between its subsidiary ZAO Mnogovershinnoye and Commerzbank (Eurasia) for a one-year $15-million loan at LIBOR + 3.5% per annum. The proceeds will be used to refinance existing debt and fund the activities of the Company.

Ivan Kulakov, the Managing Director of Highland Gold Mining Ltd commented:“This is a significant deal for us. These are attractive terms. It is also the first time we have borrowed directly from a major Western bank. It demonstrates the growing confidence of Western investors in the Russian gold industry and in the ability of our company to deliver on our ambitious development programme.”

For further information:

Andrew Garfield Brunswick 020 7404 5959