HGM.L Regulatory News (HGM)

18 Dec 2006 08:30

Highland Gold Mining Limited18 December 2006 HIGHLAND GOLD MINING LIMITED Two major transactions completed Highland Gold Completes Increased Collaboration Transaction with Barrick Gold 18 December 2006, Highland Gold Mining Limited ("Company" or "Highland") (AIM:HGM) announces today that Barrick Gold Corporation ("Barrick") has now increasedits shareholding in the Company to approximately 34 per cent. In exchangeHighland has received: • Barrick's 50% interest in existing joint ventures with Highland • Four other gold exploration interests owned by Barrick • Two Barrick personnel to be appointed to the Highland Board and further appointments at executive level The assets being acquired from Barrick as part of the agreement are: • Barrick's 50% share in Taseevskoye Netherlands B.V., and Barrick's rights and interests in the Taseevskoye licence; • Barrick's 50 % share in HB Ventures Netherlands B.V., and Barrick's rights and interests in Sovinoye, Belaya Gora and Malo Fedorov licences; • A 100% of the share in Barrick Resources LLC, the holder of the Lyubov, Maya-Inikan, and Sarasa licences; • A 100% of the shares in Barrick Gold Kyrgyzstan LLP, the holder of the Unkurtash and Kassan licences in Kyrgyzstan. The consideration for the acquisition of these share interests is satisfied bythe issue to Barrick entities of 34,492,305 ordinary shares in Highland.The first tranche of 34,312,657 new ordinary shares has been admitted to AIM ofthe London Stock Exchange and started trading today, Monday 18 December, 2006,at 8.00am. A second tranche of 179,648 new ordinary shares will be issued inearly 2007. Completion of Strategic Joint Venture with Kazzinc for development of Novoshirokinskoye The joint venture deal between Highland and Kazzinc, involving the sale of a48.3% interest in the development project at Novoshirokinskoye ("Novo") has beencompleted. As part of the deal Highland received US$36 million in cash. Bothparties will now proceed with work on establishing a project to optimise therevenue from production and sale of product from the Novo gold-polymetallicdeposit. Kazzinc is based in and develops deposits in Kazakhstan and is a largeintegrated zinc producer as well as a producer of copper, gold, silver and lead.Kazzinc has successful experience in treating ores similar to those at Novo. Commenting on both transactions, James Cross, Chairman of Highland, said:"We are happy to be ending the year on such a positive note. Both transactionsare important events for the Company. Barrick brings to Highland great opportunities as a world leader in building andoperating mines. Combined with the world-class assets and resources of Highland,the 4th largest producer of gold in Russia, the transaction puts us in an evenstronger position to focus on maximising the value of our current operations andaccelerating our development projects. We are delighted to welcome formerBarrick executives Rene Marion as Chief Operating Officer and Scott Perry asChief Financial Officer of Highland and look forward to benefiting frm theirwide-ranging experience in the months and years ahead. The completion of our joint venture agreement with Kazzinc at our Novo mine alsodemonstrates our determination to achieve steady progress at all of our projectsfor the benefit of the Company's shareholders." -End- Enquiries: London: +44 (0) 207 851 64 00 Moscow: + 7 (495) 777 31 55 E-mail: info@highlandgold.com Henry Horne, Managing Director Dmitry Yakushkin, Director of Corporate Communications Dominic Palmer-Tomkinson, Head of IR Or, WMC Communications, Alex Glover on +44 20 7930 9030 This information is provided by RNS The company news service from the London Stock Exchange