HGM.L Regulatory News (HGM)

HIGHLAND GOLD ACQUIRES THE WESTERN FLANK EXPLORATION PROPERTY ADJACENT TO MNOGOVERSHINNOYE MINE

10 December 2012 - Highland Gold Mining Limited ("Highland Gold" or the "Company") announces the acquisition of a license for exploration and mining rights for the Western Flank, a 3.9 km² property immediately adjacent to the Company's existing Mnogovershinnoye (MNV) mine operations. The acquisition resulted from an open auction held on 6 December in the regional capital of Khabarovsk for a bid price of 8.690 million roubles (ca. US$ 280,322). This new license area includes the highly prospective Chaynoye zone which has good potential to deliver new resources at MNV.

The Chaynoye prospect is approximately 1,000 metres in length and varies from 40 to 150 metres in width. It is situated in a favourable structural setting near the intersection of two major faults immediately northwest and adjacent to the current MNV license area. Chaynoye was partially explored in the past and has a historical reported prognostic resource of 3.5 tonnes (112,500 oz) of gold. Gold mineralisation is hosted within zones of quartz and quartz-carbonate veins and veinlets as well as within areas of quartz-sericite altered and silicified volcanic rock. Explored vein widths range between 0.3 to 3.0 metres for up to 115 metres along strike and reported historic gold grades as high as 207 g/t.

An aggressive trenching and drilling programme is being designed for 2013 in order to upgrade the resource potential of Chaynoye for future exploitation via the Company's operations at MNV.

This acquisition underpins the Company's continued focus on its near-mine exploration efforts at MNV with a goal of verifying and further increasing the known near mine mineralised prospects thereby adding value to the ongoing operations.

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 / reserve matters. Mr. Klemens holds a Ph.D. in Geology from the University of Toronto, has over 15 years of 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, Non-Executive Director

+ 44 (0) 1534 814 202

Numis Securities Limited

(Nominated Adviser and Joint Broker)

Alastair Stratton / Stuart Skinner, Nominated Adviser

+44 (0) 207 260 1000

James Black, Corporate Broking

+44 (0) 207 260 1000

Peat & Co Charlie Peat

(Joint Broker)   +44 (0) 207 104 2334