2019 Annual Results and Project Update

April 2020

AIM: HGM

Disclaimer

Certain statements within this presentation constitute forward looking statements. Such forward looking statements involve risks and other

factors which may cause the actual results, achievements or performance of the Group to be materially different from any future results,

achievements or performance expressed or implied by such forward looking statements. Such risks and other factors include, but are not

limited to, general economic and business conditions, changes in government regulations, currency fluctuations (including the US$/RUR

rate), the gold price, the Group’s ability to recover its reserves or develop new reserves, competition, changes in development plans and

other risks.

There can be no assurance that the results and events contemplated by the forward looking statements contained in this presentation will,

in fact, occur. These forward-looking statements are correct or represent honestly held views only as at the date of delivery of this

presentation.

The Company will not undertake any obligation to release publicly any revisions to these forward looking statements to reflect events,

circumstances and unanticipated events occurring after the date of this presentation except as required by law or by regulatory authority.

***

Total cash costs include mine site operating costs such as mining, processing, administration, royalties and production taxes, but are

exclusive of depreciation, depletion and amortisation, capital and exploration costs. Total cash costs are then divided by ounces sold to

arrive at the total cash costs of sales. This data provides additional information and is a non-GAAP measure.

In line with guidance issued by the World Gold Council, the formula used to define all-in sustaining costs measure commences with total

cash costs per ounce sold and then adds sustaining capital expenditures, corporate general and administrative costs, mine site exploration

and evaluation costs and environmental rehabilitation costs. This data seeks to represent the total costs of producing gold from current

operations, and therefore it does not include capital expenditures attributable to projects or mine expansions, exploration and evaluation

costs attributable to growth projects, income tax payments, interest costs or dividend payments.

2

Highland Gold Today

3

Russia

Kazakhstan

Chukotka

Cluster

Khabarovsk

Cluster

Baikal

Cluster

Kyrgyzstan

Unkurtash

Mongolia

China

Novo

MNV Belaya Gora

Blagodatnoye

Klen

Kekura

Valunisty

Kayen

Operating Mines

Under Construction

Development Projects

Competence Center

1. Guidance for 2020 production of gold and gold equivalent

Baley Hub

Taseevskoye, ZIF-1,

Sredny Golgotay

Moscow

Vladivostok

Khabarovsk

► Gold miner with four operating assets and

one mine under construction

► Annual production of 290-300 koz1

► Low-cost, high-margin producer

► Pipeline of attractive development projects

and clear pathway to growth

► Committed to paying dividends

Revenue

395 million US$

2018: 311 ▲ +27%

TCC

556 US$/oz

2018: 506 ▲ +10%

Net Profit

178 million US$

2018: 56 ▲ +217%

EBITDA

205 million US$

2018: 153 ▲ +34%

AISC

791 US$/oz

2018: 682 ▲ +16%

Earning per Share

0.49 US$

2018: 0.15 ▲ +216%

2019 Results Highlights

4

113 124

113 107

44 40

30

2018 2019

301

270 Valunisty

Belaya

Gora

Novo

MNV

+12%

Annual Production

koz gold and gold equivalent

2019 Results Highlights

► MNV – Outperformed management expectations, with production up 10% on the back of improved grades and higher processing volume.

► Novo – Exceeded production targets for 2019, although output was 5% lower year-on-year due to expected lower grades and changes in the balance of prices for metals in its concentrates.

► Belaya Gora – Despite a strong Q4, production decreased by 9% due to lower grades and downtime at the processing plant earlier in the year.

► Valunisty – Acquired at year-end 2018, Valunisty added 11% (30k oz) to Highland Gold’s production in 2019.

► Kekura - Construction gathered pace, with several key infrastructure facilities at or near completion, while initial stripping and mining commenced in Q4.

► The Board of Directors approved a third interim dividend in respect of 2019 in the amount of £0.035 per share, expressing confidence in the Company’s cash generation and strong balance sheet

5

Operations Third Interim Dividend

► Deborah Gudgeon joined the Board of Directors in December 2019 as Independent Non-Executive Director, filling the seat left vacant by the sudden passing of Terry Robinson last summer. Deborah will chair the Board’s Audit & Risk Committee

► Following the departure of Anton Kim at year’s end, Michael Monaghan joined the Company in March 2020 as Chief Operating Officer, bringing with him over four decades of experience in the industry

Corporate News

Guidance

Range

Meeting Our Production Guidance

6

255

261

255

272

265

270

290

301

290

2016 2017 2018 2019 2020

265 265

275

300

Annual Production vs Guidance

koz gold and gold equivalent

Annual

Production

300

800

1000

1200

1400

1600

1800

2000

0

50

100

150

200

250

Focused on Shareholder Returns

7

5 4.8

3 2.5 2.5 2.5 2 2 2.5

5 5.4 5 5.4 6 5 5 5

10-Year Return

Equity: 91%

Dividends: 58%

Annualised Return: 11%

5-Year Return

Equity: 535%

Dividends: 135%

Annualised Return: 50%

1-Year Return

Equity 44%

Dividends: 8%

Annualised Return: 51%

2.4

HGM Share Price

(pence)

Gold Price

(US$/oz)

Dividends Paid

(pence per share)

3.5

Calculated for 15 April 2010 to 15 April 2020. Includes third interim dividend for 2019, declared on 15 April 2020.

Committed to Paying Dividends

8

Highland Gold has paid out

an average of US$151 per

ounce produced since 2011

Total dividends for 2019:

GBP 0.135 per share

Total payout: US$61 M

Dividend policy sets a target

minimum payout of 20% of

net operating cash flow

before capex

Dividend Yield*

25.7

40.3

26.7 23.2 21.8

42.5 45.5

58.0 61.2

2.9%

6.2% 6.3%

7.7%

9.6% 9.8%

6.5%

9.1%

7.2%

-5.0%

-3.0%

-1.0%

1.0%

3.0%

5.0%

7.0%

9.0%

11.0%

-5

5

15

25

35

45

55

65

75

85

2011 2012 2013 2014 2015 2016 2017 2018 2019

114 89 83 163 169 215 140 186 203

* Based on the average share price for the period

Total Dividends

Paid (US$ M)

US$ per oz

Worldwide Fund for Nature 2019

Environmental Transparency Rating

►Highland Gold ranked #13 overall

among the 40 largest metals &

mining companies in Russia

►Ranked #2 for lowest environmental

impact

►Award for most improved reporting

Company-wide contest to collect

plastic for recycling in H2 2019

►Employees at each office and

production site collected a total

of 4.4 tonnes of plastic

►Served as a basis for employee

education and for expanding trash

sorting across the Company

1 1 1

5

2.8

4.9

4.0

2.6

0

2

4

6

8

10

12

14

16

0

1

2

3

4

5

6

2016 2017 2018 2019

Operating Sustainably

9

Health & Safety

Environment

LTIFR*

Fatalities

* Lost Time Incident Frequency Rate (LTIFR), calculated as the number of incidents for every 1,000,000 man-hours

► New HSE team implemented stricter standards for

incident reporting

► New corporate health & safety standards began

rolling out across the Company

► Improved overall HSE performance, but high fatality

rate in H1 2019 triggered a decision to commission

an extensive external audit in autumn 2019 to help

fine-tune systems

2019 MINEX Russia award

for corporate social responsibility

►Recognised for corporate

sponsorship of the renovation and

construction of social infrastructure

(kindergartens, schools, churches,

sports facilities) in villages where

we operate

Community

Preparing for the Pandemic

10

► Our primary concern is the health and safety of our employees and the well-being of the communities in which we operate

► To date, we have not experienced any significant disruptions to our production or sales

2019 Q1 2020 Plans for Q2 2020

• Highland Gold installed a state-of-the-

art health monitoring system at our

mines, and that system is now

additionally being used to screen for

signs of coronavirus infection before

employees enter a site

• Highland Gold contracted recognised

worldwide healthcare provider

International SOS for services at our

mine sites, and they are now assisting

with supplementary preventative

measures, including the screening of all

shift employees in regional capitals

before they travel to site

• COVID-19 Task Force established at

head office and mine sites

• Non-essential employee travel

restricted and office staff sent to work

from home

• Employee shifts extended until 01 June

2020 and contractors compelled to

follow suit

• Comfortable isolation zones equipped

at each mine site in case an employee

needs to be quarantined

• Mines stockpiling one to three months

of ore that could feed the processing

plants operating on a skeleton crew

• Potential back-up suppliers identified in

case of supply chain disruptions

• Institute a broad coronavirus testing

program for Highland Gold employees

• Establish bases with on-site testing in

regional capitals to facilitate shift

changes via 14-day quarantine

• Study options to improve automation in

our processes, an effort which could

yield benefits beyond the current

pandemic

Unlocking Value

Executing Our Strategy

11

►Highland Gold has articulated and executed a clear operating strategy

Develop

advanced-

stage projects

into production

De-risk early-

stage projects

and convert

resources into

reserves

Focus

corporate

development

on regions of

presence

Concentrate on

operational

efficiency and

continuous

improvement

Maintain

commitment to

operating in a

sustainable

manner

Maximise

the upside

potential of

operating

assets

Control

Costs Returns to

Shareholders

Deliver

Growth

MNV Novo Belaya Gora Valunisty

Goal Extend life of mine Offset expected decrease in

grades

Improve recoveries and enable

processing of ore from the

Blagodatnoye deposit

Increase production and lower

costs

Project Extensive near-mine

exploration programme

Increase mining and

processing capacity from

800 ktpa to 1.3 Mtpa

Upgrade processing plant to

add a carbon-in-pulp (CIP)

circuit and increase recoveries

from ~75% to 86-91%

Initiate underground mining to

reach higher grades and

increase mill throughput from

250 ktpa to 350 ktpa

Status Completed

► 2016-2018 exploration added over 600k oz Au to reserves

► Life of mine extended to 2029

► Exploration continues at MNV and on three new adjacent greenfield licences

In Progress

► Mine: construction of infrastructure to boost capacity in advanced stage

► Mill: X-ray transmission (XRT) ore sorting technology selected and equipment ordered

► Completion due by year-end 2020

In Progress

► Site preparations finalised

► Completion due in H2 2020

► Tailings dam improvements in progress

► 776k oz Au reserves booked for Blagodatnoye, extending combined life of project to 2032

Planning Stage

► Engineering surveys, design work, cost estimates and tender preparations are in progress for both the underground mine and the processing plant expansion

Effect Maintain mine production level Maintain mine production level +20-30% mine production +50-60% mine production

and lower TCC

2020

Capex

US$26 million

► US$5 M – exploration

► US$21 M – maintenance

US$35 million

► US$23 M – mine & mill

expansion

► US$12 M – maintenance &

exploration

US$17 million

► US$14 M – processing

plant upgrade

US$9 million

► US$2 M – project work

► US$7 M – maintenance and

exploration

Operating Mines - Maximising Upside Potential

12

Development Projects – Advancing the Pipeline

13

Advanced-Stage Projects Status Reserves*

(koz Au)

Average

Grade (g/t)

Kekura Active construction phase. Completion and commissioning

by 2023. 2,009 7.0

Baley ZIF-1 Tailings Heap leach design completed. Most regulatory approvals

received. Commissioning expected in 2021-2022. 344 1.0

Early-Stage Projects Status Resources**

(koz Au)

Average

Grade (g/t)

Taseevskoye Amendments to mining plans approved by regulators in

December 2019, pushing back the development target to

2024.

5,088 5.1

Unkurtash Scoping study completed in 2017. 2020 budget includes

funding for a pre-feasibility study to aid in the search for a

project partner.

3,697 1.7

Klen Additional exploration carried out at Klen and the

surrounding Verkhne-Krichalskaya zone in 2019.

Evaluation of drilling results is in progress.

627 5.0

* Proven and probable reserves (JORC 2012) as of 01.01.2019. ** Measured, indicated and inferred resources (JORC 2012) as of 01.01.2019

Kekura

Post-Tax IRR*

38%

NPV (10%)*

US$311 M

Life of Mine

16 years

Low Projected TCC

US$511/oz

* Figures according to 2018 Definitive Feasibility Study @ US$1250/oz Au

and do not account for value of ASEZ tax breaks

Kekura is Highland Gold’s premier development project,

with high grade ore and low projected costs

► Life of Mine: 16 years

► Mining: Open pit and underground

► Processing plant:

800 ktpa capacity

Gravity + cyanide leaching

► Estimated annual Au Production:

172 koz (years 1-8)

46 koz (years 9-16)

► 2020 Capex: US$107 M

► Upside potential:

1500 sq. km licence area

12 additional exploration targets

► Granted residency in the Chukotka Advanced Special Economic Zone (ASEZ), providing a series of tax incentives that add more than US$ 100 million to NPV

14

High-Grade Ore Reserves

2.0 Moz Au @ 7.0 g/t

Kekura Project Update

15

1

2 5

6

3 4 7

Site Map

1

Open Pit • Initial stripping and mining began in Q4 2019

2

Pilot Processing Plant • 120 ktpa capacity with 35-40% recovery

• First gold received in March 2020

3

Camp

3

Camp Expansion • Modular buildings en route to site

Mining Support Facilities • Assay Laboratory built in 2019

Kekura Project Update

16

1

2 5

6

3 4 7

Site Map

4

Fuel Storage • Over 1900 tonnes of fuel delivered in Q1 2020

5

Power Substation • Ready to receive electricity from regional

power grid this year

6 7

Communications

Tower

261 272 270 301 290 300

320

500

Building Towards the Future

17

2016 2017 2018 2019 2020 2021 2022 2023

300 320

350

500+ Projected Production Profile

koz gold and gold equivalent

Current

management

team joined

Valunisty

acquisition

Novo

capacity

expansion

Belaya Gora

mill upgrade

Baley ZIF-1

Tailings

construction

Kekura

launch

Valunisty

expansion

► Increase production to over 500 koz/year by 2023

► Double EBITDA

► Keep TCC in the range of US$550-600

18

2019 Financial Results

Net Cash Flow

138 million US$

2018: 136 ▲ +1.5%

Net Debt/EBITDA

1.2

2018: 1.4* ▼ 0.2

Revenue

395 million US$

2018: 311 ▲ +27%

2019 Financial Highlights

US$000 (unless stated) 2019 2018

Production (gold and gold eq. oz) 300,704 269,500

Total cash costs (US$/oz)1 556 506

All-in sustaining costs (US$/oz) 791 682

Revenue 395,386 311,153

Operating profit 161,483 109,186

EBITDA 205,079 153,060

EBITDA margin 52% 49%

Net cash flow from operations 138,448 136,247

Net profit 177,794 56,084

Earnings per share (US$) 0.487 0.154

Net debt (250,169) (211,433)

Net debt/EBITDA ratio 1.2 *1.4

19 * Including US$17.7 M of Valunisty debt assumed at acquisition on 27.12.2018

and repaid in Q1 2019. Excluding that, net debt/EBITDA was 1.3

Metals Price and Currency Exchange Environment

20

2018 2019 ∆

Gold US$/oz 1,258 1,395 ▲ +11%

Silver US$/oz 15 16 ▲ +4%

Lead US$/t 2,299 1,990 ▼ -13%

Zinc US$/t 2,858 2,556 ▼ -11%

Copper US$/t 6,546 5,991 ▼ -8%

Gold eq. (Novo) US$/oz 1,017 1,248 ▲ +23%

USD/RUB 62.8 64.9 ▲ +3%

EUR/USD 1.18 1.12 ▼ -5%

GBP/USD 1.33 1.28 ▼ -4%

2018

Cu 1%

Zn 2%

Pb 5%

Ag 6%

2019

Au

89%

Other

Metals

Au

86%

MNV

45%

Valunisty

9%

Belaya Gora

18% Novo

23%

14%

MNV

43%

Belaya Gora

14%

Novo

23%

11%

Cu 1% Zn 1%

Pb 3%

Ag 6% 10.4

22.3 16.7 13.4 16.9 13.5 13.1 16.2

10.0 18.1 15.9 20.0

1292 1320 1302 1288 1283

1358 1415

1497 1510 1495 1472 1480

1000

1100

1200

1300

1400

1500

1600

0

5

10

15

20

25

30

35

40

45

50

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

LMBA Average

Au price (US$/oz) Au Sold (koz)* * Au sold by MNV, Belaya Gora and Valunisty

2019 Gold Prices vs Volume of Sales

HGML Revenue Breakdown

Other

Metals

EBITDA

21

153 153 170 175.0

218.0 212 209 207 205

17 5

46 3 9 3 2

0

50

100

150

200

2018 Valunisty Exchange

Rate

Metals

Prices

Volume of

Sales

Costs G&A Other

Expenses 2019

69

99

77 87

23 23 0 17

-16 -21 -22

-2

18

38

58

78

98

118

2018 2019 2018 2019 2018 2019 2018 2019 2018 2019

MNV Novo Belaya Gora Valunisty G&A & Other

US$ M

EBITDA by Asset

US$ M

2019 EBITDA Margin: 52%

2018: 49%

TCC & AISC

22

724 794

100

200

300

400

500

600

700

800

900

2018 2019

600 565

100

200

300

400

500

600

700

800

900

2018 2019

All-In Sustaining Costs

US$/oz

Total Cash Costs by Asset

323 391

75 93

100

200

300

400

500

600

700

800

900

2018 2019

399

786

100

200

300

400

500

600

700

800

900

2018 2019

MNV

► TCC decreased by 6% due to 9% growth in the volume of sales, which compensated for the effect of rising energy costs (+27%)

Belaya Gora

► TCC increased by 10% mainly due to the lower average grade (-7% y-o-y), higher energy costs (+27%) and the hiring of two contractors for mining activities

Novo

► TCC increased by 21% to due to the reduction in sales volume (-5%) and an increase in salaries to match the local market median

Valunisty

► TCC was lower than budgeted due to the use of impaired ore from stockpiles

483

■ concentrate processing costs

-6%

+10%

+21%

506 556

100

200

300

400

500

600

700

800

2018 2019

+10%

► TCC increased by 10% due to the addition of Valunisty, with its higher production cost profile, and the decrease in the share of less costly Novo ounces from 41% in 2018 to 35% in 2019

682 791

100

200

300

400

500

600

700

800

2018 2019

Total Cash Costs

► AISC rose by 16% due to significant write-downs of stockpiles at Belaya Gora (+US$ 6.7 m) and Valunisty (+US$ 4.5 m), an increase in supporting CAPEX (+32%) and G&A (+9%)

+16%

Low-Cost Producer

23

1310

1124

1038 1034 1023 1010 998 983 978 970 966 943 912

866

791 778 738

594

0

200

400

600

800

1000

1200

1400 International Peer

Russian Peers

All-In Sustaining Costs

FY 2019 – US$/oz

Source: published company data

Investing in Growth

24

Estimated 2020 Capex: US$205-210 M

► Kekura construction

► Novo expansion and Belaya Gora mill upgrade

► MNV exploration and maintenance

► Preparations for Baley ZIF-1 Tailings project & Valunisty expansion

58 62 89

205- 210

0

50

100

150

200

250

2017 2018 2019 2020E

Kekura 107

MNV 26

Belaya Gora 17

Novo 35

Valunisty 9

Other 12

Capital Expenditure by Year

US$ M

Kekura 39

MNV 21

Belaya Gora 5

Novo 13

Valunisty 4

Other 7

2019 Capex by Asset

US$ M

2020E Capex by Asset

US$ M

Comfortable Balance Sheet

25

► Comfortable debt level

Net Debt/EBITDA ratio of 1.2

► Portfolio of low-cost, long-term debt

Debt Status as at 31.03.2020

‒ Gross debt: US$326 M

‒ Net debt: US$254 M

‒ Effective interest rate: 3.74%

‒ All debt is fixed-rate

‒ Average tenor: 56 months

► Substantial liquidity

~US$340 M of undrawn revolving credit facilities

► Capital expenditure fully funded by operating cash flow and available low-cost bank debt.

208 232 289 326 199 194 246 254

3.44%

4.24%

3.76% 3.74%

1.56%

2.50%

1.76%

0.98%

31.12.2017 31.12.2018* 31.12.2019 31.03.2020

Gross Debt(US$ M)

Net Debt(US$ M)

InterestRate

Libor 1MUS$

* Excluding US$17.7 M of Valunisty debt @ 5.12%

assumed on 27.12.2018 and repaid in Q1 2019.

Debt is shown free of the modification effect of IFRS 9

Short Term 2%

LongTerm 98%

Sberbank

45%

Rosbank

11%

Raiffeisen

23%

Alfa Bank

13% Unicredit

8%

Debt Portfolio

By Lender By Term

26

Targets for 2020

2020 Targets

► Maintain production in the range of 290-300k oz of gold and gold equivalent

► Complete improvement projects at operating assets

Novo 1.3 Mtpa expansion

Belaya Gora processing plant upgrade

Additional exploration at MNV

Preparations for Valunisty expansion

► Continue construction work at Kekura in preparation for commercial production in 2023

► Support and expand ongoing efforts to improve workplace safety and employee wellbeing

► Manage risks associated with the COVID-19 pandemic

27

Thank You!

www.highlandgold.com