HGM.L Regulatory News (HGM)

27 Jul 2007 10:00

Highland Gold Mining Limited27 July 2007 HIGHLAND GOLD ANNOUNCES SIGNIFICANT DRILLING RESULTS AT THE BELAYA GORA PROSPECT 27 July 2007 - Highland Gold Mining Limited ("Highland Gold", or the "Company")is pleased to report significant results from the 2006/2007 diamond drillingprogramme at the Belaya Gora ("White Mountain") exploration property in theKhabarovsk region (66 km to the south of MNV operation) where two targets,"Pologaya" and "Stockwork" are currently being drilled out. Results of the Programme, which to date includes 9,300 metres of drilling and1,513 metres of trenching, confirmed previous exploration results andcorroborated the geological models for two types of mineralisation: flat lyingmetasomatic tabular deposit with oxidized ore at Pologaya and steeply dippingvein-veinlet systems at Stockwork. At Pologaya drill-holes have identified gold-bearing tuffs averaging a thicknessof 30-40m over an area of 400 x 150m. Most drill-holes returned significant goldintersects with the upper boundary at 0-15m level from the surface. Drillingresults returned gold grade ranges from 1.5 to 9.3g/t at thickness of 3.0-28.0m. At Stockwork drill-holes identified an oxidation zone down to the depth of50-100m. Drill-hole DH-504 yielded a continuous interval of ca. 131m with anaverage gold grade of 2.1g/t. Drilling, sampling and assay programmes are currently going on and includetesting of two metallurgical samples. Commenting on today's announcement, Henry Horne, Managing Director said: "Theseare very exciting results. Due to the prospectivity of this explorationproperty, we have increased our investment exploration programme for 2007 toalmost $4.5 million from just over $1 million in 2006. We expect to benefitconsiderably from the various operating synergies with our main producing assetMNV, located just 66 kilometres away, including purchasing, logistics,processing and G&A costs. Opportunities for heap leaching on site and truckingthe higher grade ore to MNV from this open pit deposit promise to make BelayaGora a relatively low cost operation. The ongoing 2007 drillingprogramme including 12,000 metres of drilling is on schedule and currently weare making good progress in delineating more resources in the target areas." For further informationplease contact: Henry Horne, Managing Director Dmitry Yakushkin, Director of Communications Moscow: + 7 (495) 777 31 55 Dominic Palmer-Tomkinson, Head of Investor Relations London: +44 (0) 207851 64 00 Or, WMC Communications, Alex Glover on +44 20 7930 9030 --------------------------------------------------------------------------- Detailed Findings The Belaya Gora exploration property is well situated to local infrastructureand is only 66 kilometres driving distance from our Mnogovershinnoye operation. Gold mineralisation at Belaya Gora is localised within subvolcanic extrusivestructure composed with dacites and rhyo-dacites in the central part and withtuffs of the similar composition at flanks intruding and overlaying the olderstratified layers of mainly andesit-basalt composition. Gold mineralisation hasspatial relation with fields of intensive argillisation covering an area ofabout 0.6km2 Economic gold mineralisation is related to the zones of metasomaticsilicification, of quartz veinlet and to the areas of strongly argillisedbrecciated rocks cemented with fine cryptocrystalline quarts. Belaya Gora is atypical Low Sulphidation Epithermal deposit. Results of the Work Programme providing for 9,300m of drilling and 1,513m oftrenching already confirmed previous exploration results and corroborated twogeological models for two morphological types of gold mineralisation: - steeply-dipping metasomatic tabular deposit with oxidized ore at Pologaya and - complex dendritic vein-veinlet systems at Stockwork zone. At Pologaya, a total of 51 shallow drill-holes of mostly South-East inclinationof 60-75o and amounting to 3,137m have been completed to date. All thedrill-holes intersected intensively altered and oxidised tuffs of slightcementation over an area of 400 x 150m and underlying barren andesite-basalts.The average thickness of the gold-bearing zone is 30-40m. Most drill-holesrevealed significant gold intersects indicating a near-surface tabular almostsub-horizontal ore deposit. Some highlights to the current drilling programmeare summarised below. Belaya Gora - Target Pologaya - Drilling - Fire AssaysDrill Hole ID From (m) To (m Intersect Length (m Avg. grade Au (g/t 7505 4.6 27.6 23.0 6.2 7504 3.3 29.8 26.5 3.9 6503 2.8 13.3 10.5 9.3 7005 4.4 25.4 21.0 3.7 7003 15.8 30.7 14.9 4.7 9005 5.2 19.9 16.9 3.1 7506 4.0 32.3 28.3 2.5 8002 7.1 15.2 23.9 2.0 9006 3.0 18.4 15.4 2.9 7510 0.8 25.8 25.0 1.5 6507 1.3 7.5 6.2 4.2 9003 2.4 9.2 6.8 2.8 Drilling results at Pologaya also corroborate sampling results from severaltrenches which were excavated down to 3m along drilling profiles. Trench TR-75assay results yielded a significant intersect of 32m with gold grade of 5.7g/t. Belaya Gora - Target Pologaya - Trenching - Fire AssaysTrench ID From (m To (m Intersect Length (m Avg. grade Au (g/tTR75 6.0 38.0 32.0 5.7TR75 45.0 66.0 21.0 1.67 Recalculation of all the data in accordance with the assay results at Pologayaarea shows that the expected resources may amount up to 3 million tonnes averagethickness of 19m and average gold grade of about 2.6g/t. At Stockwork, a total of 23 drill-holes of mostly N-W inclination at 55-60oamounting to 6,162m have been completed to date. Core sampling at Stockwork has revealed a complex distribution of goldmineralisation represented with cryptocrystalline quartz vein and veinletsystems within intensively whitened (argillised) sub-volcanic rhyo-dacites.Drill-hole DH-504 yielded a continuous interval of ca. 131m with average goldgrade of 2.1g/t, total thickness of the mineralised zone amounting to more than250m. Thus the potential of the Stockwork zone has been delineated down to thedepth of 300m. Some highlights to the current drilling programme are summarised below. Belaya Gora - Target Stockwork - Drilling - Fire AssaysDrill Hole ID From (m To (m Intersect Length (m Avg. grade Au (g/t DH504 105.9 236.8 130.9 2.1 4501 79.0 147.9 68.9 1.5 6501 20.9 32.7 11.8 2.6 4002 204.1 222.1 18.0 4.0 4004 7.4 28.5 21.1 2.8 4003 38.1 78.3 40.2 1.4 Spectroscopic Assays (XRF) 6509 7.2 60.2 53 3.6 4005 33.3 44.5 11 3.5 4503 106.0 135.0 29 1.9 The 2007 Programme also includes two proposed metallurgical samples of 300kgeach (one from Pologaya, one from Stockwork) in order to determine indicativerecoveries. Note: all composite intervals in the above tables have been calculated using aminimum 5m waste interval and Au cut-off grade of 0.5g/t. This information is provided by RNS The company news service from the London Stock Exchange