Positive Results from the Blagodatnoye Exploration Project

05.11.2012

Highland Gold Mining Limited (“Highland Gold”, or the “Company”) announces the latest diamond core drilling and trenching results from its Blagodatnoye property, a highly prospective exploration project located just 30 km southwest of the Company’s existing Belaya Gora Project.

These latest results corroborate the positive results that emerged during the 2011 exploration season and are indicative of the project’s potential to contribute significantly to the Company’s resource base within its strategic mining hub in the Khabarovsk region.

Hosted within a volcanogenic formation, gold mineralisation at Blagodatnoye is associated with a linear stockwork system characterised by sets of sub-parallel east-west trending and steeply dipping zones of narrow veins and quartz-carbonate veinlets. Assay results from both diamond core drilling and trenching works completed to date outline two distinct gold mineralised zones with a total footprint ranging from 250 – 500 metres in length by 150 - 300 metres in width and were delineated to a vertical depth of 230 metres from surface. Intersects of gold mineralisation display a high degree of continuity and underline the potential for Blagodatnoye to host a substantial near surface resource grading from 1.5 and 2.0 g/t.

Blagodatnoye - Trenching & Drilling Highlights 2012
Trench Id Trench Length
[m]
From
[m]
To
[m]
Intersect Length
[m]
Au [g/t]
TR-148005 307.0 156.0 165.0 9.0 1.62
482.0 484.0 2.0 6.98
TR-152807 820.0 517.0 544.0 27.0 1.47
Drill Hole Id Drill Hole Length
[m]
From
[m]
To
[m]
Intersect Length
[m]
Au [g/t]
49203 350.0 197.0 205.0 8.0 6.84
214.0 253.3 39.3 1.45
48401 251.0 216.0 227.6 11.6 1.88
48402 255.0 50.1 56.7 6.6 1.51
173.1 196.0 22.9 1.20
50006 350.0 170.0 174.1 4.1 2.83
50801 250.3 8.0 17.0 9.0 7.09
49205 251.7 58.7 80.0 21.3 5.02
48403 253.0 13.0 50.5 37.5 1.06
56.0 72.7 16.7 1.98
126.0 133.2 7.2 1.58
152.0 166.0 14.0 1.47
48801 253.2 98.0 111.7 13.7 2.00
130.1 148.0 17.9 1.74
199.2 203.0 3.8 3.27
48803 250.2 2.1 13.0 10.9 0.99
48001 250.3 101.0 103.0 2.0 6.14
1.0 11.0 10.0 1.13
48002 249.8 3.2 12.2 9.0 1.30
29.1 41.0 11.9 0.98
48405 227.9 77.6 88.5 10.9 3.59
151.8 154.9 3.1 15.14
48406 146.9 52.0 70.0 18.0 1.32
51602 132.0 19.5 29.4 9.9 2.36
50803 199.8 25.5 42.5 17.0 0.85
57.7 78.7 21.0 0.96
112.7 123.7 11.0 1.52
51214 303.4 164.9 172.7 7.8 1.29
51601 259.4 92.0 107.0 15.0 1.12
50805 253.4 2.5 17.0 14.5 1.67
38.0 62.0 24.0 1.35
110.0 116.7 6.7 2.47
50407 225.4 62.6 85.0 22.4 1.89
111.0 127.0 16.0 1.53
136.7 150.0 13.3 3.33
50408 145.0 26.3 35.0 8.7 2.09
101.0 129.0 28.0 1.18
51603 151.8 13.3 24.9 11.6 2.38
43.0 57.0 14.0 1.94
50009 150.1 92.8 112.8 20.0 1.25
Preliminary spectral analysis assays. - Drill hole inclination from surface: 60 degrees; Intersects defined by cut-off grade of 0.5 g/t, 5 metre maximum waste interval, 5 metre or 2.5 gram*metre minimum ore interval, no capping.

Highland’s 2012 exploration programme at Blagodatnoye allocated 9,800 metres of diamond core drilling which is currently nearing completion. A soil geochemical survey was also completed this year across an 18 km² area which revealed a significant gold anomaly warranting additional follow-up.

The Blagodatnoye property is located 30 km to the southwest of Highland’s existing Belaya Gora Project and can be accessed by an existing road network and electrical power grid. It has a reported prognostic resource estimate of 161,000 oz of gold and preliminary test work initiated in 2011 indicated favourable metallurgy and gold recovery levels via conventional milling and cyanidation processing methods. For the near future the Company is planning additional exploration on the property in order to verify and further increase the known mineralised prospects in conjunction with completing all technical requirements for reserve registration with the Russian state authorities thereafter initiating an independent JORC compliant resource audit.

Highland Gold is committed to maintaining its policy of successfully advancing quality exploration projects to reserve status and continues with its exploration efforts at its projects in the Khabarovsk area as part of the Company’s strategy of organic growth in the region.

Mr. Werner Klemens, Head of Exploration at Highland Gold has reviewed and verified the information contained in this release with respect to drilling and resource / reserves matters. Mr. Klemens holds a Ph.D. in Geology from the University of Toronto. He has over 15 years of experience in mineral exploration and is a fellow of the Geological Association of Canada. A rigorous quality assurance programme complying with international standards is in effect at all exploration projects and includes duplicate sampling, insertion of standards and check assaying at external laboratories.

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 Limited:
(Nominated Adviser and broker)
Alastair Stratton / Stuart Skinner, Nominated Adviser
James Black, Corporate Broking
 
+44 (0) 207 260 1000
+44 (0) 207 260 1000