Highland CEO says makes sense to include Dvoinoye

DENVER (Reuters) - The chief executive of Russia's gold producer Highland Gold Mining (HGM.L) said on Monday that it makes sense for stakeholder Millhouse LLC's Dvoinoye assets to be included in Highland's portfolio.

When asked if there were any plans to include Dvoinoye in Highland's portfolio, Henry Horne told Reuters in an interview at the Denver Gold Forum that "I think at certain point they will have to come (up) in discussions, because it doesn't make sense actually to have them outside."

Millhouse LLC is the investment vehicle owned by Roman Abramovich, Russia's richest man and the owner of England's soccer club Chelsea, who last December offered to acquire a 40 percent interest in Highland.

Abramovich was a former governor in the remote Russian province of Chukotka, where Dvoinoye is located.

RUSSIAN PARTNER A MUST

Horne said that it is necessary for Highland to have a strong Russian partner, such as Millhouse, to deal with the challenges and financing issues related to Russia.

Meanwhile, with the world's largest gold miner Barrick Gold (ABX.TO) as its stakeholder, Highland could also use Barrick's mining expertise to tap into Russian vast and remote reserves.

"Having those two together position us well within Russia, and it takes a lot of the uncertainty that it was in the past away (when we were) without a Russian partner," Horne said.

Russia's gold reserves is only second to South Africa's, but its production ranked fifth in production last year, partly due to fragmented production and a lack of skills and miners.