Increase in JORC Compliant Resources

HIGHLAND GOLD INCREASES JORC COMPLIANT RESOURCES AT THE UNKURTASH PROJECT IN KYRGYZSTAN

22 May 2012 - Highland Gold Mining Limited ("Highland Gold", or the "Company") is pleased to announce results from a JORC compliant resource audit carried out by the independent consultancy IMC Montan at the Sarytube prospect which is part of the Company's Unkurtash project in Kyrgyzstan. The audit results increases previously reported JORC compliant gold resources for the Unkurtash project by 1.1 Moz to a total of 3.0 Moz and improves the Company's total mineral resource base as recorded as at 31 December 2011 by another 10% to 12.2 Moz of gold. 

The Unkurtash project hosts four distinct prospects, three of which, Unkurtash, Sarytube and Karatube have been the focus of extensive exploration activities and are allocated within the Company's two licenses Unkurtash-Andagul (12 km²) and Kassan (51 km²).

The combined mineralised zone measures approximately 4,000 metres on strike, ranges from 250-500 metres in width and has a potential vertical extent of at least 350 metres. Intrusion-hosted stockwork type gold mineralisation characterises Unkurtash and Sarytube, while gold at Karatube is associated with skarn-type mineralisation. Previous test work has indicated favourable metallurgy and gold recovery levels via conventional gravity and cyanidation processing methods.

(Resource calculation based on minimum grade of 0.8 g/t per cell in block model)

At the Sarytube prospect more than 29,000 metres of drilling were completed in 2011 with delineated ore mineralisation extending to a vertical depth between 150 - 170 metres from surface. Sarytube has the same mineralogy and ore composition as the Unkurtash prospect.

For the Unkurtash prospect the current resource figure extends to a depth of approximately 250 metres from surface and does not include exploration results obtained in 2011 from deep drilling down to a depth of 450 metres from surface as well as results from ongoing systematic underground exploration at the 1640 metre horizon (above sea level). Results from the deeper horizon have the potential to substantially improve the currently defined resource base at this prospect.

In 2011 the Company completed a substantial exploration programme at the Unkurtash and Sarytube prospects including 53,000 metres of drilling and 1,800 metres of exploration underground development. While the Company has initiated engineering studies examining the development of a large open-pit operation, additional exploration drilling and underground development is budgeted to continue in 2012.

IMC Montan (International Economic and Energy Consulting) consultants Mr. Neil Scott (Member of the Institution of Materials, Minerals and Mining; Bachelor of Science; Certified Engineer) and Mr. John Bacharach (Fellow of the Institution of Materials, Minerals and Mining; Associate of the Royal School of Mines; Bachelor of Science; Certified Engineer) have provided and verified information contained in this release with respect to drilling and resource / reserves. They are qualified as Competent Persons as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.

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