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Highland Gold cruising at altitude

Russian gold miner has stable first half as full-year production guidance maintained at 290,000-300,000oz
September 3, 2019

Highland Gold Mining's (HGM) first-half results don’t include earnings from the current gold price highs, but the Russian gold miner has another card up its sleeve: the depreciating rouble, which fell 9.5 per cent against the dollar year on year.

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This limited its all-in cost growth despite an 85 per cent year-on-year increase in sustaining costs to $19m (£15.8m) due to equipment replacements. 

The miner also refinanced $100m of its debt in August, stretching out the average loan length to 36 months from 18. This balance sheet work should help the company maintain its generous dividend policy while capital expenditure ramps up with the Kekura mine construction and Novo expansion. Gold at $1,500 an ounce (oz) won’t hurt either. In the half, Ebitda climbed 21 per cent year on year to $86.5m. 

Production was 142,254 oz of gold equivalent in the first half, a 17.7 per cent year-on-year increase, and guidance has been maintained at 290,000oz-300,000oz for 2019. The 5p interim dividend is a slight dip on the equivalent handout from last year, but the company’s 20 per cent net cash from operations dividend policy should see the final payment shoot up, thanks to the gold price. Chief executive Denis Alexandrov said Highland had largely overcome the operational issues from a year ago, aside from at the Belaya Gora mine, where a fire and mill repairs hit throughput.