HGM.L Regulatory News (HGM)

18 Dec 2007 07:01

Highland Gold Mining Limited18 December 2007 Highland Gold announces the posting of a circular to its shareholders in connection with the equity subscription by Millhouse LLC 18 December 2007: Highland Gold Mining Limited (the "Company" or "HighlandGold") (AIM: HGM) announces that it is today posting to its shareholders acircular in connection with the equity subscription by Millhouse LLC (the"Circular"). Included with the Circular is a notice of an EGM to be held at11.00am on 14 January 2008 at 26 New Street, St. Helier, Jersey JE2 3RA.Subject, inter alia, to the resolutions to be considered at this EGM beingpassed, it is expected that the completion of Millhouse LLC's SecondSubscription in Highland Gold will take place on or about 15 January 2008 and65,050,000 new ordinary shares will be admitted to AIM on or about 16 January2008. Thereafter Millhouse LLC will have subscribed for 130,100,000 new ordinaryshares in Highland Gold at a price of £1.51 per share, representing an interestof 40.0% in the issued share capital of the Company. The following is an update to current trading given in the Circular; Mnogovershinnoe (MNV) has increased open pit production with better thananticipated ore grades and improved milling performance with greater tonnagethroughput and higher recoveries. This has led to higher than forecast ounceproduction in November and December month-to-date. The Company is on track tomeet its production target of 150,000 ounces of gold for 2007. Development work due to lead to the commissioning of the Novoshirokinskoyeproject in Q4 2008 remains on schedule. Infrastructure construction is ongoing,with a workforce of more than 600 employees currently on site. All pre-winteractivities have now been completed and orders have been placed for alllong-lead-time 6 major processing and mining equipment. Underground minedevelopment is underway on four working levels and a study commissioned on theore reserve base to JORC code standards will be completed in Q1 2008. At the Taseevskoye project the Company expects the reconciliation of the reserve/resource base to be finalised in Q1 2008. Options for various ore processingmethods are currently under review and an ore-grade cut-off study is beingprepared for submission to the Russian Government Commission For NaturalResources Reserves (GKZ) in Q1 2008. Taseevskoye is scheduled to beginoperations in 2010. The feasibility study for the Mayskoye project is scheduled for completion byyear end, at which time it will undergo an internal review process. Work on theJORC ore resource update is also in progress. Orders have been placed for thefirst phase of underground mining equipment, with the start-up of developmentworks planned for the summer of 2008. The Company expects operations at Mayskoyeto begin towards the end of 2010. In addition, the Company has several exploration projects in its portfolio, oneof which, Belaya Gora (Khabarovsk region), is in an advanced stage ofexploration works. In accordance with its rights under the Millhouse LLC Relationship Agreement,Millhouse LLC has nominated the following individuals for appointment to theBoard: Eugene Shvidler, Eugene Tenenbaum and Olga Pokrovskaya. Subject to Jersey law and the articles of the Company, it is expected that theseappointments to the Board will become effective in due course. Upon theseappointments, it is expected that the Board will be reconfigured to comprisenine Directors in total. Further details on the new composition of the Board andthe executive will be announced on or before the date on which the Millhouse LLCnominees are appointed to the Board. Highland Gold has been advised by JPMorgan Cazenove and Rothschild. JPMorganCazenove acts as the Nominated Adviser for Highland Gold. A copy of the Circular will be available on the website of Highland Gold MiningLimited at www.highlandgold.com from today. Enquiries: Highland Gold Henry Horne, Managing Director, Moscow - +7 495 777 5529 Dmitry Yakushkin, Director of Communications - +7 (495) 777 3155 Duncan Baxter, Executive Director - +44 1534 814202 Dominic Palmer-Tomkinson - +44 207 7239 0140 JPMorgan Cazenove Michael Wentworth-Stanley, Managing Director - +44 (207) 588 2828 (Nominated Adviser) Sam Critchlow Rothschild Roger Ewart Smith, Managing Director - +44 (207) 280 5424 Fin Public Relations Alex Glover - +44 (207) 608 2280 Millhouse LLC: John Mann - +7 495 961 1307 -Ends- This information is provided by RNS The company news service from the London Stock Exchange