Kyrgyzstan Exploration Activities

Highland Gold Mining exploration activities in Kyrgyzstan

2 August 2010 - Highland Gold Mining Limited ("Highland Gold", or the "Company") is pleased to announce that exploration programmes at its two properties, Unkurtash and Kassan, in Kyrgyzstan are progressing well and according to plan. The drilling programme target of 17,000 metres includes reverse circulation (RC) and diamond core drilling (DD) which, along with significant underground exploration development, is expected to conclude by the year-end.

At Unkurtash the exploration project received regulatory approval and the license agreement has recently been renewed. From the start of 2010 a total of 4,000 metres of drilling have been completed and preliminary drilling results obtained to date underpin the previously established potential of the property for hosting a large open-pit mineable resource with an average grade in the range of 1.4 - 1.7 g/t. Metallurgical test work including a full process flow sheet is being performed on a 1,600 kg bulk sample, the results of which are expected by the end of Q3 2010. Previous metallurgical test results confirm that the gold mineralisation is amenable to conventional processing and direct cyanidation with expected gold recoveries exceeding 90%. Based on exploration results obtained to date a pre-feasibility study and resource estimation is now underway and has indicated positive economics.

The positive results received at the Unkurtash property have significantly raised the Company's confidence in the potential of its adjacent Kassan property and warrants a future drilling programme for resource delineation. In continuation of the Company's exploration efforts at the property during the previous years a new property license has been issued with exploration terms which will fully accommodate anticipated time requirements for in- depth exploration at Kassan.

Within the Kassan property, the Karatube prospect hosts oxidised gold skarn mineralisation which is potentially amenable for heap leaching. The Sarytube prospect (also within the Kassan license) compares favourably with the gold mineralisation and resource potential of Unkurtash. Pending approval of the new exploration project by the Kyrgyzstan Regulatory Authorities more than 3,000 metres of exploration drilling are budgeted at Kassan this year.

Advancing the Company's exploration projects in Kyrgyzstan to development project status will substantially increase the resource base of the Company and its asset value in the long term.

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 with international standards is in effect at all exploration projects and includes duplicate sampling, insertion of standards and check assaying at external laboratories.

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 22 80

J.P.Morgan Cazenove Michael Wentworth-Stanley, Managing Director

(Nominated Advisor) + 44 (0) 207 588 28 28

Matrix Corporate Capital Robin Henshall, Partner - +44 (0) 203 206 71 72

(Joint Broker) Alastair Stratton, Partner - + 44 (0) 203 206 72 04