RNS Number:6088P
Highland Gold Mining Limited
10 September 2003

                                                           10 September 2003





                  Highland Gold confirms MNV asset position


On 11 August 2003 the Board of Highland Gold announced that it intended to
participate in the auction for certain fixed assets at its principal operating
mine, MNV, which are currently leased from the Khabarovsk Administration. The
Board wishes to further clarify the Company's position ahead of the auction on
16 September 2003.



Highland Gold's subsidiary, ZAO MNV owns the freehold in the majority of the
fixed assets used for mining at MNV. It also uses certain buildings and
equipment required for the operation of the MNV mine which are leased under a 15
year agreement from the Khabarovsk Administration which expires in 2015. On 9
August, the Khabarovsk Administration announced that it would be offering the
freehold in these assets for acquisition by way of public auction. Prior to this
date, the Company had reached a basis of agreement with the Khabarovsk
Administration in that it would be prepared to participate in an auction of the
assets should the Administration decide on this course of action.  As previously
announced, the Company is intending to participate in the auction of these
assets in accordance with the privatisation requirements, and will continue to
evaluate the terms of its participation in this auction in the best interests of
shareholders.



Highland Gold has confirmed with its legal advisers that the Company's rights of
access to the use of the assets under the terms of the lease would continue
irrespective of a change of freehold ownership. Therefore in the event that the
assets are not acquired by Highland Gold, Highland Gold would continue to lease
these assets under the terms of the existing lease agreement for the duration of
that lease.



The Board has received legal advice that any attempt to unilaterally cancel the
lease agreement without a court ruling is illegal under Russian law and that any
such attempt at cancellation is unenforceable. Furthermore, the Company's
position on this matter is supported by the Federal Ministry for Economic
Development.  The Company continues to reserve all its rights in respect of
this.



The Khabarovsk Administration has included the tailings dump and associated
assets in the list of assets to be auctioned. The Company has registered title
to these assets and has filed a motion with the Khabarovsk Court to protect
these ownership rights.  The Board has received legal advice that any attempt to
terminate MNV's registered title to these assets without a court ruling is
illegal and unenforceable.  The inclusion of these assets in the single lot
auction may give rise to additional legal remedies being available to the
Company to protect its legal rights in relation to all the assets included in
the auction.



Highland Gold has continued to operate the MNV mine under the terms of its long
term mining licence, valid until 2018, without interruption throughout the
recent period of negotiation with the Khabarovsk Administration. The Board is
confident that it will continue to do so and that a mutually acceptable
conclusion will be reached in its negotiations with the Administration.



The Company is a major contributor to the local economy by way of tax income and
a significant employer in the region and the Board looks forward to maintaining
MNV's presence in and its contribution to the regional community.



Enquiries:
Highland Gold             Peter Daresbury                   +44 (0) 20 7409 5631
Brunswick                 Alison Howard / Mark Antelme      +44 (0) 20 7404 5959








                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

MSCLBLFFXKBLBBF