Significant Results Achieved at Two Exploration Properties

03.11.2009

Highland Gold Mining Limited ("Highland Gold", or the "Company") is pleased to announce positive exploration results from its Mnogovershinnoye (MNV) and Lyubov properties.

At Mnogovershinnoye, excellent drilling results have been received from the Company's ongoing near-mine exploration programme which is directed at discovering and delineating additional reserves to be available for underground and open-pit production in the short term.

For the re-evaluation of previous drilling results 53 new shallow drill holes have been completed totalling 3,500 metres at the Valunistoye (Pebble) prospect. The prospect is a 2.5 kilometre long steeply dipping mineralised zone approximately 20 metres wide which extends towards the Northwest of the license area - just North of the current open pit.

Fire assay results received to date concur with our reserve model for this prospect but also include newly discovered high-grade intersects in between previously defined mining blocks:

 

Mnogovershinnoye - Valunistoye - Exploration Drilling Highlights 2009
Drill Hole Id Drill Hole Length
[m]
From
[m]
To
[m]
Au [g/t] Intersect Length
[m]
2855-2 70.3 17.0 42.5 9.2 25.5
2575-2 50.0 13.3 23.6 14.0 10.3
2875-1 54.5 13.3 39.4 5.2 26.1
2555-2 52.2 2.8 10.7 14.9 7.9
2595-2 40.4 12.9 35.0 5.0 22.1
2855-1 46.1 1.3 22.7 4.2 21.4
2795-1 70.4 4.2 14.2 8.5 10.0
2535-1 58.5 15.1 21.4 11.7 6.3
2640-3 82.0 35.4 38.7 13.7 3.3

 

Drill hole inclination from surface: 60 degrees

These new results corroborate the reserve potential of Valunistoye now estimated at 190,000 ounces of shallow, open-pit mineable ore grading between 3.0-5.0 g/t, more than double the originally defined gold reserves at Valunistoye and are expected to contribute considerably to MNV's open-pit operations in the near future.

By year end a total of 5,000 metres of exploration drilling will be completed. In 2010 resource definition will continue for which 6,000 metres of drilling have been allocated including testing of 1.5 kilometres of undrilled sections along the entire length of the Valunistoye zone.

At Lyubov, positive intermediate results have been received from metallurgical test work performed at SGS laboratories in the regional capital Chita on a 320 kg composite sample of primary ore. The sample was collected from drill core from between 50 and 200 metres depths at the Evgraf target and bottle-roll testing with a 96 hour leach period returned high gold recoveries.

 

Lyubov - Bottle roll test

 

Cyanidation Leach Time - 96 hrs
Ore Fraction [mm] Gold Recovery [%]
10.0 68.7
5.0 71.9
0.075 89.1
Sample grade: 1.5 g/t  

These results corroborate the positive metallurgical properties for the Evgraf ore which also yielded gold recoveries in excess of 80% utilising gravitational enrichment during previous test work. Future processing scenarios at Evgraf may include gravitational concentration with cyanidation of concentrate or conventional milling followed by cyanidation or a low-cost heap leach operation. Amenability for heap leaching is currently being investigated at SGS utilising column leach tests for particle sizes of 5, 10 and 20 mm and results are expected by the end of December 2009.

An in-house resource estimate for the Evgraf target combining previous external and our own drilling results currently defines a resource potential of 1.6 million ounces of gold at an average grade of 1.7 g/t and a cut-off grade of 0.75 g/t. Of this 0.6 million ounces have been calculated as C1+C2 category reserves extending to a depth between 200 to 250 metres from surface.

Additional drilling of 6,000 metres is planned for 2010 at the target and is aimed at increasing the C1+C2 reserves potential by at least 0.6 million ounces of gold through conversion of adjacent prognostic P1 resources.

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 11 years experience in mineral exploration and is a fellow of the Geological Association of Canada. A rigorous quality assurance programme complying to international standards is in effect at all exploration projects and includes duplicate sampling, insertion of standards and check assaying at external laboratories.

Commenting on today's announcement Valery Oif, CEO of Highland Gold, said: "We are very pleased with the good drilling results at MNV. This underlines that this deposit still holds significant exploration potential which we are determined to fully exploit and turn into value. The metallurgical test work at the Lyubov deposit continues to yield positive results and opens up a number of options for a low cost operation."

For further information please contact:

Highland Gold Dmitry Yakushkin, Head of Communications - +7 495 424 95 21
  Duncan Baxter, Chairman - +44 (0) 1534 814202
Fin Public Relations Alex Glover - +44 (0) 207 608 2280
Smith's Dominic Palmer-Tomkinson - +44 (0) 207 239 0140
J.P. Morgan Cazenove (Nominated Adviser) Michael Wentworth-Stanley, Managing Director
+ 44 (0) 207 588 2828