2016 Final Results

HIGHLAND GOLD MINING LIMITED

10 April 2017

Full Year 2016 Audited Results

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

1EBITDA 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

2Net debt is defined as cash and cash equivalent, financial assets, decreased by interest-bearing loans and borrowings and by liability under finance lease

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.

• 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).

This event is being streamed. It is recommended that you listen via your computer speakers. The link for online registration is: http://engage.vevent.com/rt/webcasting/index.jsp?seid=809

To register to participate by telephone and to receive local dial-in numbers, please follow this link:

http://emea.directeventreg.com/registration/1943163

The Annual General meeting will be held on 17 May 2017.

FOR FURTHER INFORMATION PLEASE CONTACT:

Please find the full version of the press release in the attached PDF.

http://www.rns-pdf.londonstockexchange.com/rns/9931B_-2017-4-9.pdf