HGM.L Regulatory News (HGM)

CONSTRUCTION PERMIT RECEIVED AT BELAYA GORA

29 November 2011 - Highland Gold Mining Limited ("Highland Gold" or the "Company") is pleased to announce that it has received approval from the Russian State authorities for the construction of a stand-alone processing plant at Belaya Gora.

This approval opens the way for the second stage of development of the Belaya Gora Project. First phase mining at Belaya Gora was started in November 2010 with delivery of select oxide ore to the processing plant at the Company's Mnogovershinnoye (MNV) operation. Progressing to the critical second stage of construction underpins the Company's plan to launch the stand-alone gold processing plant at Belaya Gora during Q4 2012.

The design documentation for the second stage of the Belaya Gora Project was submitted in July of this year for review to the Federal GlavGosExpertise Agency. The anticipated design process assumes on site ore crushing, milling, coarse gold gravity concentration and cyanidation. The capacity averages 1.5 million tonnes of ore per annum with an expected life-of-mine gold production ranging from 75,000 to 110,000 oz per annum. Project capex estimates are currently being finalised and will allow for construction to begin in the winter period.

The Belaya Gora Project is located 66 kilometres south of MNV and is accessed by an all weather road and adjacent to the local electric grid power supply. In July 2009, the State Committee on Reserves of the Russian Federation (GKZ) registered 820,000 oz of C1+C2 reserves at Belaya Gora. Processing of select ore from Belaya Gora at MNV is expected to continue through to commissioning of the stand-alone process facility.

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