Highland pledge over production of gold

Highland Gold, a Russian gold producer partly owned by oligarch Roman Abramovich, will not be swayed from plans to develop its new deposits by this year’s crash in prices for the precious metal.

Eugene Shvidler, chairman of Highland Gold, said the company would buck the trend of other gold producers to rein in spending and put projects on hold because it had felt “no big impact so far” from the fall in gold prices by about a quarter this year.

But he expressed some frustration with smaller Russian gold companies reluctant to “marry” into partnerships after Highland tried and failed to forge deals over the last five years, warning them that this would hurt the industry.

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“On the one hand (the price fall) is very scary, but on the other, it’s very healthy,” Shvidler said.

“There has been no big impact so far. If it stays the way it is, we’re OK. We don’t have to stop any big projects or anything like that.”

The gold price started the year at just under $1,680 (£1,098) an ounce and was trading at around $1,280 early yesterday.

Highland’s 2012 all-in cash costs stood at $973 an ounce, the company said.

Shvidler, head of Abramovich’s investment vehicle Millhouse LLC which owns a 32 per cent stake in Highland, shrugged off comments by rival gold company, Russia’s Polymetal.

Its chief executive, Vitaly Nesis, said last month the industry’s response to the crash was “wholly inadequate” and spending cuts were “startlingly” slow.

“He is very talkative,” said Shvidler. He said he was not ruling out new acquisitions.