Interim Results Announcement for H1 2017

HIGHLAND GOLD MINING LIMITED

Interim Results Announcement for H1 2017

04 September 2017

Highland Gold Mining Limited ("Highland Gold", the "Company" or "Group") today reports its unaudited financial results and production figures for the half year ended 30 June 2017 ("H1 2017").

FINANCIAL SUMMARY

* Definitions for non-IFRS terms are provided in the glossary to the Chief Financial Officer's Report below.

The interim condensed consolidated financial statements of Highland Gold for the six months ended 30 June 2017 are set out below.

H1 2017 HIGHLIGHTS

Financial

· Total first half revenue was broadly flat year-on-year at US$147.2 million.

· H1 2017 EBITDA was US$73.2 million, a decrease of 8.1% from H1 2016, chiefly due to a stronger rouble (average exchange rate was 57.76 RUB/USD in H1 2017 vs 70.23 RUB/USD in H1 2016), higher production costs and utilisation of low-grade ore at BG. EBITDA margin for the period was 50% versus 54% for H1 2016.

· All-in sustaining costs (AISC) per ounce rose to US$674 from US$609 in H1 2016 due to the stronger rouble and lower average grades at Belaya Gora.

· The net debt to EBITDA ratio rose marginally to 1.30 as of 30 June 2017 versus 1.26 as of 31 December 2016, when net debt was US$ 205.5 million.

Operations

· Total production at Mnogovershinnoye (MNV), Novoshirokinskoye (Novo) and Belaya Gora for H1 2017 was 131,784 oz of gold and gold equivalent, up 2.4% from 128,671 in H1 2016.

· MNV and Novo improved on H1 2016 gold and gold equivalent production by 13% and 5.2%, respectively.

· At Belaya Gora, continued focus on processing low-grade ore stockpiles pending the completion of an ongoing project review.

· New JORC-compliant reserve estimate at MNV doubled ore reserves and supported the extension of life of mine by four years to 2022.

· New exploration licences received for two areas adjacent to MNV, and an extensive near-mine exploration programme continued on existing MNV licence areas.

· Scoping study for Unkurtash completed and published, and consultants retained to identify potential partners for developing the project.

POST HALF YEAR EVENTS

· Interim Dividend of £0.0498 per share approved by the Board of Directors

· The Company affirms its forecast for total production of gold and gold equivalent of 255,000-265,000 oz for the full year.

CONFERENCE CALL DETAILS

The Company will hold a simultaneous webcast and conference call to discuss the results, hosted by CEO Denis Alexandrov, on Monday, 04 September 2017 at 10:00 UK time (12:00 Moscow).

This event will be streamed live online. To listen and view the slide presentation in real time, it is recommended to access it via computer. The link for online registration is:

https://digital.vevent.com/rt/highlandgoldmining/index.jsp?seid=17

To register to participate by telephone and to receive local dial-in numbers, please follow this link:http://emea.directeventreg.com/registration/78381745

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

FOR FURTHER INFORMATION PLEASE CONTACT:

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