Released: 22 April 2015

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22 April 2015 - Highland Gold Mining Limited ("the "Company"), the AIM-quoted Russian gold producer, announces its final audited results for the year ended 31 December 2014.

FINANCIAL HIGHLIGHTS

The Company also announces that the Board has appointed non-executive Chairman Eugene Shvidler as Executive Chairman of Highland Gold with effect from today. The new position allows Mr Shvidler to take a more hands-on role in shaping the long-term strategy of the Company in this important stage of its development.

Commenting on the annual results, Mr Shvidler said: "In 2014, Highland Gold began commercial production at its third mine, Belaya Gora, while reaching record output at Novoshirokinskoye, continuing efforts to extend the life-of-mine at Mnogovershinnoye, and taking important steps in the process of bringing the Kekura project to fruition. The Company achieved record output while maintaining fiscal discipline, despite the ongoing challenges faced by the industry. While we recorded a net loss for the year due to one-off charges, the Company's underlying fundamentals remain sound even against the backdrop of lower gold prices. The Board and I are confident that 2015 will see further improvement in our operational performance."

KEY EVENTS

• Total production at Mnogovershinnoye (MNV), Novoshirokinskoye (Novo) and Belaya Gora rose 10.8% to a record 258,937 oz of gold and gold equivalents (2013: 233,696 oz)
• A 5.7% increase in total cash costs to US$645 per oz (2013: US$611 per oz) and a 3.8% decline in all-in sustaining costs to US$809 per oz (2013: US$842 per oz)
• Impairment of Klen goodwill and other long-term assets of US$11.4 million due to postponement of project development
• Net loss of US$24.8 million also influenced by US$9.6 million foreign exchange loss and US$49.4 million non-cash deferred tax charge. Adjusted net profit (free of impairment and abnormal foreign exchange, and applying a 33.3% effective income tax rate) was US$51.3 million (2013: US$54.7 million).
• Acquisition of licences for the North-Western Flank and Lower Horizon areas at MNV
• Mined and processed ore at Novo rose more than 15% to record levels in excess of 580,000 tonnes driven by improved efficiencies
• Completion at Belaya Gora of the second stage gravity circuit (to improve recovery rates)and on-site state-of-the-art assay laboratory
• Conclusion of advanced exploration programme at Kekura, and delivery of scoping study undertaken by consultants Hatch
• Design documentation for the Klen deposit development project received approval from the Main State Review Board
• Average realised price for gold and gold equivalents in 2014 of US$1,175 per oz (2013:US$1,291 per oz)
• Interim dividend of £0.025 per share paid in October 2014 (2013: Interim dividend of £0.025 per share)
• New US$50 million reserve credit facility arranged with UniCredit in September
• Net debt to EBITDA ratio maintained at 2.0 (2013: 1.9) in line with Board's policy
• Lost Time Incident (LTI) rate reduced to all time low of 0.27 in 2014 (2013: 0.28)

POST YEAR EVENTS

• Final dividend of £0.020 per share recommended, making a total distribution of £0.045 per share for the year to 31 December 2014 (2013: £0.050 per share)
• Documents for registration of Kekura reserves submitted to regulatory authorities
• ng agreements signed with Alfa-Bank for US$60.0 million and Gazprombank for US$80.0 million in April 2015

2015 TARGETS

• Expand production in 2015 to between 270,000 - 285,000 oz of gold and gold equivalents(sourced from MNV, Novo and Belaya Gora)
• MNV-Maintain stable levels of production while continuing to optimise cost controls
• Novo-Drive further increases in output through greater efficiencies
• Belaya Gora - Double output from 2014's 38,000 oz through further improvements in mining and processing operations
• Chukotka - Ongoing development of the Kekura project
• Exploration - Prioritise MNV's near mine exploration programme

CONFERENCE CALL DIAL-IN DETAILS

The Company will hold a conference call on Wednesday, 22 April 2014 hosted by Valery Oyf, CEO, to discuss the final results. The conference call will take place at 12.00 UK time (14.00 Moscow). The link for the online registration is : http://emea.directeventreg.com/registration/33006816

The Annual General meeting will be held on 26 May 2015.

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