Preliminary Results for the Twelve Months to 31 December 2003

20.04.2004

Financial Highlights

  • Turnover of US$71.6m (6 month 2002: US$ 27.4m)
  • Net profit after tax of US$18.0m (6 month 2002: US$5.4m)
  • Earnings per share of 16.3 cents (6 month 2002: 5.2cents)
  • Operating cash flow of US$32.7m (6 month 2002: US$ 7.8m)
  • Final dividend of 1.5 cents per share, total dividend for the year of 3 cents

Note: These are the first full year results for Highland Gold since the company was incorporated on 23 May 2002. Consequently, financial performance can only be compared to the second half of 2002. However, as the company’s operating mine, MNV, was already producing, production numbers can be compared to the full year 2002. All 2002 results have been restated as a result of the changed treatment of stripping costs, in line with industry practice.

Operating Highlights

  • Total gold production for the year up to 194,000 ounces
  • Cash operating costs averaged 159 $/oz for the year
  • Resource base doubled with acquisition of Mayskoye deposit for US$34.9m
  • Darasun on schedule to commence production in May 2004
  • Pre-feasibility study completed at Novoshirokinskoye, production on track for commencing in 2005
  • Purchase of leased assets at MNV for US$26.7m, previously leased from the Khabarovsk Administration
  • Share issue and strategic partnership with Barrick Gold Corporation

Commenting on the results Peter Daresbury, Executive Chairman, said: "I am delighted with the progress we have made on all fronts in our first full year as a quoted company. We are now larger and stronger than we were this time last year. Gold production at 194,000oz is a record and we are on track to produce 235, 000 oz in 2004. Reserves have doubled from 4m oz to 8m oz and resources have increased from 8m oz to 17m oz. We have secured key assets that were previously leased at MNV, successfully developed Darasun in readiness for initial production in May, made good progress with the feasibility study at Novo and, most significantly, completed the major acquisition of Mayskoye. We have strengthened the executive team on the Board and, with the support of our new shareholder, Barrick, I am more confident than ever that we have the ability and resource to realise our ambitions.”

Managing Director, Ivan Koulakov, said: "With the continuing transition to the new ore body at MNV, Darasun coming on stream, construction work at Novo, the Mayskoye feasibility study and infrastructure construction and the exploration programme, 2004 will be an exciting year for Highland Gold.."

Interviews with Peter Daresbury and Ivan Koulakov, in video/audio and text, will be available from 07:00 (UK) on 20 April 2004 on: www.highlandgold.com and www.cantos.com.

Enquiries: 020 7404 5959
   
Highland Gold Peter Daresbury, Executive Chairman
  Ivan Koulakov, Managing Director
  Denis Alexandrov, Finance Director
   
Brunswick Andrew Garfield
  Mark Antelme