Highland Gold Mining Limited (“the “Company”), the AIM-quoted gold producer, presents its final audited results for the year ended 31 December 2016.

FINANCIAL HIGHLIGHTS

US$000 (unless stated)

2016

2015

Production (gold and gold eq. oz)

261,159

262,485

Group all-in sustaining costs (US$/oz)

652

640

Total Group cash costs (US$/oz)

454

480

Revenue

305,901

276,175

Operating profit

69,361

22,413

EBITDA[1]

162,491

133,317

Net profit /(loss)

47,909

(10,019)

Earnings /(loss) per share (US$)

0.145

(0.032)

Net profit before impairment losses

70,741

25,963

Net cash inflow from operations

136,164

105,603

Capital expenditure

59,349

42,195

Net debt[2]

(205,465)

(231,442)

KEY EVENTS

Total 2016 production of 261,159 oz of gold and gold equivalent, in the upper half of the guidance range for the year of 255-265k oz. (2015 production: 262,485 oz).
Average realised price for gold and gold equivalent in 2016 was US$1,136 per oz (2015: US$1,062 per oz).
Total Cash Costs lowered by 5.5% to US$454 per oz and All-In Sustaining Cash Costs up by 1.8% to US$652 per oz.
Cash inflow from operating activities rose 28.9% to US$136.2 million (2015: US$105.6 million)
Net debt to EBITDA ratio reduced to 1.26 as of 31 December 2016 from 1.74 in the previous year.

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1 EBITDA is defined as operating profit/ (loss) excluding depreciation and amortisation, impairment losses, movement in ore stockpiles obsolescence provision, movement in raw materials and consumables obsolescence provision, result of disposal of a non-core entity and gain on settlement of contingent consideration.
2 Net debt is defined as cash and cash equivalent, financial assets, decreased by interest-bearing loans and borrowings and by liability under finance lease

Interim dividend of £0.050 per share paid for H1 2016 (2015: Interim dividend of £0.020 per share).
Mnogovershinnoye (MNV) – An adjusted internal Life-of-Mine model for MNV, based on ongoing near-mine exploration and reserve recalculations, now provides for production through at least 2022 (versus 2018 previously).
Novo – Project for expansion to 1.3 mtpa ore mining and processing capacity underway and on track for completion in late 2018.
Blagodatnoye – Extensive exploration drilling carried out to confirm resources.
Baley Hub – De-watering programme initiated for existing Taseevskoye open-pit with a view to de-risking the project and allowing for further reserve confirmation. Exploration work also carried out on Sredny Golgotay along with a pilot mining project at the Kaftan site on the Sredny Golgotay licence.

POST YEAR EVENTS

Final dividend of £0.054 per share recommended, making a total distribution of £0.104 per share for the year to 31 December 2016 (2015: £0.045 per share).

2017 TARGETS

Total production of gold and gold equivalent is expected to remain stable at 255,000-265,000 oz.
MNV – To continue extensive near-mine exploration programme throughout the year with a view towards further extending Life of Mine.
Novo – To proceed with design and construction work on mill expansion.
Belaya Gora – To complete a pre-feasibility study on processing plant upgrades and the inclusion of Blagodatnoye in Belaya Gora operations.
Kekura – To complete a definitive feasibility study and move forward with procurement, infrastructure and construction preparations.
Baley Hub – To continue de-risking Taseevskoye and to examine development options for the Baley Hub projects.
To complete updated JORC-compliant reserve estimations on key operating and development projects.

CONFERENCE CALL DIAL-IN DETAILS

The Company will hold a simultaneous webcast and conference call to discuss the results, hosted by CEO Denis Alexandrov, on 10 April 2017 at 10:00 UK time (12:00 Moscow).