Full Year 2015 Audited Results

Highland Gold Mining Limited ('the 'Company'), the AIM-quoted gold producer, presents its final audited results for the year ended 31 December 2015.

FINANCIAL HIGHLIGHTS

* free of impairment and exchange rate losses and with a normalised tax rate (please see Financial review)

KEY EVENTS

• Total production at Mnogovershinnoye (MNV), Novoshirokinskoye (Novo) and Belaya Gora for the full year 2015 of 262,485 oz of gold and gold equivalents, an increase of 1.4% compared with 258,937 oz in 2014.

• Average realised price for gold and gold equivalents in 2015 was US$1,062 per oz (2014: US$1,175 per oz)

• Total Cash Costs reduced by 25.6% to US$480 per oz and All-In Sustaining Cash Costs lowered by 20.9% to US$640 per oz.

• Despite lower prices, strong cost performance facilitated a 7.8% increase in EBITDA to US$133.3 million (2014: US$123.6 million), while EBITDA margin reached 48.3% versus 40.6% in 2014.

• Net loss of US$10.0 million compared to net loss of US$24.8 million in 2014, primarily due to impairment of Kekura due to delayed project development and non-cash deferred tax charges related to currency fluctuations.

• Adjusted net profit, free of impairment and exchange rate fluctuations and with a normalised tax rate, amounted to US$49.6 million (2014: US$51.3 million).

• Project development activity focused on advancement of the Kekura project, including the completion of geotechnical studies, pre-design surveys, and data calculation for selection of a processing flowsheet, together with the commencement of design work for the processing plant. A scoping study for the Baley Ore Cluster projects (Taseevskoye, Sredny Golgotay and ZIF-1) was also initiated.

• Exploration efforts focused on promising near-mine targets at MNV designed to extend life of mine.

• New US$50 million three-year pre-export loan agreement concluded between Novo and UniCredit Bank: to be used to refinance existing debt.

• Net debt to EBITDA ratio reduced to 1.7 as of 31 December 2015 from 2.0 a year earlier.

• Interim dividend of £0.020 per share paid for H1 2015 (2014: Interim dividend of £0.025 per share)

• Lost Time Incident Rate (LTI) rate edged up slightly from 2014's all-time low of 0.27 to 0.30.

POST YEAR EVENTS

• Denis Alexandrov appointed Chief Executive Officer of Highland Gold's Moscow-based management company, Russdragmet LLC, effective January 18. Outgoing CEO Valery Oyf remains with the Company as Non-Executive Director.

• Updated registration of Russian category reserves for 12 ore bodies within the MNV licence with regulatory authorities is underway and is expected to result in an extension of the life of the mine.

• Final dividend of £0.025 per share recommended, making a total distribution of £0.045 per share for the year to 31 December 2015 (2014: £0.045 per share)

TARGETS FOR 2016

• Maintain stable total production of gold and gold equivalents in the range of 255,000-265,000 oz, as the natural decline at MNV, as it approaches the end of mine life, is offset by improvements at Belaya Gora in the 2nd half.

CONFERENCE CALL DIAL-IN DETAILS

The Company will hold a conference call on Wednesday, 20 April 2016 hosted by Denis Alexandrov, CEO, to discuss the final results. The conference call will take place at 10.00 UK time (12.00 Moscow). The link for the online registration is:

http://emea.directeventreg.com/registration/91179765

The Annual General meeting will be held on 25 May 2016.

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