RNS Number:7142U
Highland Gold Mining Limited
28 January 2004

28 January 2004

Highland Gold receives US$40m from a share issue to Barrick Gold and agrees the
                        terms of a strategic partnership

                              Trading update

Barrick Gold Corporation

Further to the announcement dated October 13th 2003, the Board of Highland Gold
Mining Limited ("Highland Gold") today announces that it has agreed a share
issue and a strategic partnership with Barrick Gold Corporation ("Barrick") of
Canada.  Barrick is a leading international gold producer with operations and
development projects on four continents.

When Harmony Gold's 31.7% stake in Highland Gold was placed on 13th October 2003
Highland Gold announced the terms of a proposed new share issue to Barrick.
Under the terms of this original transaction Barrick acquired 10% of Highland
Gold's equity in the placing and conditionally agreed to subscribe for
29,577,322 new ordinary shares at a price of 235p per share.  This would have
given Barrick a stake of approximately 29% in Highland Gold.  However Barrick
has expressed a preference in investing directly in deposits to be developed,
starting with Mayskoye, and consequently the principal terms of the revised deal

  * Highland Gold agrees to issue 9,312,439 new ordinary shares at a price of
    235p per share (the price agreed under the terms of the original
    transaction) to Barrick raising gross proceeds of US$40m (#21.88m) for
    Highland Gold

  * The share issue will take Barrick's total shareholding from approximately
    10% to approximately 17% of the company's enlarged issued share capital

  * The proceeds will be used to strengthen Highland Gold's financial position
    and to accelerate the capital expenditure programme

  * Barrick has agreed that it will not dispose of its new ordinary shares for
    a period of six months

  * Highland Gold and Barrick are discussing the opportunity of establishing a
    joint venture at the Mayskoye deposit.  In any event, Barrick will have a
    right of first refusal with respect to third party investment in the
    Mayskoye deposit

* In addition, Highland Gold and Barrick will enter a four year strategic
  partnership, with a one-year rolling contract thereafter, to develop
  opportunities in the Russian gold sector, including:

     * An agreement on how Highland Gold and Barrick will co-operate in
       Russia, including the right but not the obligation, on an exclusive 
       basis, for Barrick to participate in up to 50% of any acquisition made by 
       Highland Gold in Russia and similar rights for Highland Gold for any 
       acquisition made by Barrick in certain regions of Russia

     * An agreement to pursue the foundation of an exploration joint venture

* Barrick will have the right to nominate one director to the Board of
  Highland Gold and to second certain personnel

The Directors of Highland Gold, having consulted with W.H. Ireland as Nominated
Adviser to Highland Gold, consider that the terms of the revised transaction are
fair and reasonable insofar as its shareholders are concerned.

Trading update



*         Production increased for the fifth consecutive year

*         2003 production target of 194,000 oz of gold achieved (from 178,000 oz
          in 2002), at the time of the transition to a new ore body


*         Capital expenditure programme on schedule and within budget

*         Mining has begun with a stockpile of ore built up ahead of the mill
          start-up date of May 2004


  * The first stage of the feasibility study necessary to restart mine
    development and refurbish the mill has been completed. 


  * The Mayskoye feasibility study has been commissioned and is expected to be
    finalised by the end of 2004

Mnogovershinnoye (MNV)

MNV increased production for the fifth consecutive year.  The production target
of 194,000 oz for 2003 was achieved, an increase of 9% from 178,000 oz in 2002.
The transition to the new ore body is progressing as planned with no impact on
production levels.

                                               Period ending 31st   Period ending 31st   Percentage
                                               December 2003        December 2002        change YOY

Tonnes of ore mined                            800,000              762,761              4.9%

                      Of which underground     474,767              374,852              26.7%

                      Of which open pit        326,033              387,912              -16.0%

Tonnes released from stockpile                 90,402               43,268

Tonnes of ore milled at MNV's processing plant 891,202              806,029              10.6%

Average head grade, g/t                        7.36                 7.49

                    From underground ore       8.82                 6.71

                    From open pit ore          6.05                 8.32

Gold produced                                  194,000 oz           178,000 oz           9.0%

Average recovery rate                          92.02%               91.74%


At the beginning of 2003, Highland Gold started development at the Darasun
deposits, including intensive mine preparation and development at the Darasun
and Teremki underground mines.  Mining has now begun in order to build a
stockpile of ore for the planned mill start-up in May 2004.  The construction of
the flotation and hydrometallurgy buildings at the processing plant is nearing
completion.  The tailings facility was completed to accommodate five years of
initial production.

Highland Gold maintains its previously announced production target of 40,000
ounces of gold in 2004.


The review of the mining data and the assessment of the technology to be used in
the metallurgical process, which was commissioned in order to redevelop the
mining deposit as a primarily gold-producing asset, have been completed.
Details of the feasibility study will be available at the preliminary results.


Following the acquisition of the Mayskoye deposit for US$34.9m, completed on
November 4th 2003, the management of Highland Gold has moved the project forward
as follows:

a) It has commissioned a Magadan-based metallurgical institute to conduct the
technical study, which is expected to be completed by the end of 2004.

b) It has sent eleven tonnes of ore samples to a Moscow-based institute for
further process testing with the results expected in the second half of 2004.

c) It has accelerated the construction of camp accommodation and related
infrastructure, which will now begin in the second half of 2004.

Commenting on the partnership with Barrick and the trading update, Peter
Daresbury, Executive Chairman of Highland Gold, said:

"I am pleased to be able to announce the terms of the agreement with Barrick. I
am looking forward to our relationship with Barrick as both a shareholder and a
strategic partner in the development of further opportunities in Russia and to 
the subsequent acceleration of our growth.

"These revised terms reflect a better understanding of both companies' interests
and objectives in Russia since the original announcement of Barrick's interest
in October 2003.  This deal allows us to benefit from Barrick's experience as
well as from its recognised technical, financial and managerial expertise.

"I am also pleased to be able to update the market on the solid progress of our
producing and development assets, including reaching our target production
figures.  I look forward to production starting at Darasun on time and within
budget in May 2004."

Commenting on the partnership with Highland Gold, Greg Wilkins, President and
Chief Executive Officer, said,

"This latest Highland transaction represents an important next step in the
development of Barrick's strategy in Russia - one of the most prospective gold
regions anywhere in the world."


Highland Gold
Peter Daresbury / Denis Alexandrov                            +44 207 409 5600

Alison Howard/Mark Antelme                                    +44 207 404 5959

Vince Borg                          - Media contact            +1 416 307 7477
Kathy Sipos                         - Investor Contact         +1 416 307 7441

For further information on Highland Gold please visit www.highlandgold.com

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