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Highland Gold shines as rouble falls, but grades are mixed

The Russian gold miner's financials have been helped by good cost control and a weak rouble
September 27, 2016

Several of the operational and financial levers that led Highland Gold (HGM) to a strong performance in 2015 were again evident in the six months to June. All-in sustaining costs - the most comprehensive measure for miners' outgoings - dropped from $640 (£494) an ounce (oz) in 2015 to $609 at the half-year, as the weak rouble offset the negative impact of inflation and energy price increases.

IC TIP: Hold at 138p

That coincided nicely with a 6 per cent year-on-year uptick in gold production, which was largely thanks to further development of the higher-grade underground mine at Novoshirokinskoye. This meant output from the site - where ore processing capacity is set to rocket to 1.3m tons over the next two years - increased by nearly a fifth from the comparable period in 2015 to 57,960 oz.

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