Mr. James Crombie reports

HIGHLAND COPPER COMPANY REPORTS ADDITIONAL HIGH GRADE RESULTS AT THE KEWEENAW COPPER PROJECT, MICHIGAN

Highland Copper Company Inc. has released results for 18 additional diamond drill holes from the 543S chalcocite deposit at the Keweenaw copper project in the upper peninsula of Michigan, United States. Some of the higher-grade and longer intersections in holes for which all assays have been received and checked include the following:

• CEN414: 13.0 metres of 3.64 per cent copper and 5.9 g/t silver including:
  • 5.5 metres of 6.36 per cent Cu and 8.1 g/t Ag;
• CEN409: 10.0 metres of 3.45 per cent Cu and 7.0 g/t Ag including:
  • 3.5 metres of 8.37 per cent Cu and 1.6 g/t Ag;
• CEN417: 25.7 metres of 2.99 per cent Cu and 4.1 g/t Ag including:
  • 3.0 metres of 10.43 per cent Cu and 14.2 g/t Ag;
• CEN411: 33.5 metres of 2.25 per cent Cu and 14.5 g/t Ag including:
  • 4.7 metres of 4.59 per cent Cu and 2.6 g/t Ag;
• CEN434: 46.3 metres of 1.99 per cent Cu and 2.6 g/t Ag including:
  • 2.8 metres of 6.37 per cent Cu and 3.8 g/t Ag;
• CEN412: 29.0 metres of 1.95 per cent Cu and 2.8 g/t Ag including:
  • 2.4 metres of 5.37 per cent Cu and 4.8 g/t Ag;
  • 2.0 metres of 7.93 per cent Cu and 3.6 g/t Ag;
• CEN407: 26.0 metres of 1.09 per cent Cu and 1.2 g/t Ag;
• CEN322: 25.5 metres of 1.08 per cent Cu and 4.4 g/t Ag including:
  • 1.5 metres of 7.61 g/t Ag and 24.2 g/t Ag.

Sampling of visually identified high-grade copper intersections is on approximate 0.5-metre intervals adjusted for the geology. Individual high-grade samples tend to cluster in continuous zones within broader envelopes of lower-grade material. Contacts with adjacent unmineralized wall rocks may be sharp or gradational.

"We are very pleased with the results," noted Ross R. Grunwald, PhD, vice-president of exploration for Highland. "It shows the strength and continuity of this copper system with its multiple lenses extending from near surface. The geological relationships in the most recent holes are consistent with those in previous holes and provide confidence that a reliable geological model may be developed to support a resource estimate.

"The company is currently completing the QA/QC [quality assurance/quality control] audit on the 543S database, and resource estimation in compliance with Canadian National Instrument 43-101 is expected to begin as soon as the audit is completed."

Exploration program progress

Highland's 2012 objective was to verify the 1970s drill results by reducing the historic drill hole spacing and twinning selected historic holes to establish an NI 43-101 resource estimate at the 543S deposit. To date 26,207 metres in 174 diamond drill holes (with a final hole in progress) have been completed. The original grid at an approximate 200-foot collar spacing (60 metres) has been reduced to an overall collar spacing of approximately 30 metres. Collar spacing in the southwestern portion of the 543S deposit was locally reduced to 15 metres to gain a better understanding of the continuity of mineralization and local geological structure. Cross-section 600E indicates that the stratiform geometry of the mineralization is similar to the geometry of the mineralized zones on the adjacent Section 500E (Section 500E may be on the company's website). Assay results for 123 diamond drill holes have been reported to date with assays from 51 holes remaining to be reported for the 543S deposit.

Drilling at 543S is complete for now, and both diamond drills are being moved to the G-2 prospect where 31 historic holes drilled in the 1970s indicate potential for chalcocite mineralization geologically similar to that found in the 543S deposit.

Geology

Lens-like zones of mineralization, largely in brecciated tops of amygdaloidal Precambrian basalt lava flows, consist mostly of primary chalcocite accompanied by small amounts of native copper and native silver. Silver in the copper-bearing zones varies mostly from one to 15 g/t Ag. Traces of other sulphide minerals are also present. Mineralization comes to the bedrock surface and is covered by three to 30 metres of glacial deposits. The 543S deposit is in the western portion of a 20-mile-long belt of chalcocite prospects that extends east from a belt of large native copper mines, centred near the town of Calumet, Mich., that were mined for about 130 years before closing in 1968 due to low copper prices.

The 2012 drill holes are within an area of 101 historic diamond drill holes called the 543S sulphide deposit, a zone of chalcocite mineralization that was explored from 1973 to 1977 and briefly in the mid-1990s. The 543S deposit contains a historic resource estimate of 4.5 million short tons averaging 2.27 per cent Cu at a 0.75-per-cent Cu cut-off grade as described in a technical report by Behre Dolbear & Company Ltd. titled, "Centennial and Kingston Native Copper, 543S, and Other Copper Sulphide Properties, Houghton and Keweenaw Counties, Michigan, U.S.," dated Sept. 29, 2011. The company has not completed the work necessary to classify the historical estimate mentioned above as current mineral resources. The company is not treating the historical estimate as current mineral resources as defined in National Instrument 43-101, and the historical estimate should not be relied upon. The historical resource estimate is contained in six separate lenses averaging 5.0 metres (16.5 feet) true thickness that dip about 40 degrees to the north.

Drilling, sampling, assaying and QA/QC

Drill hole inclinations are selected to approximate a true width intersection of the mineralized lenses based on regional information on the dips of the lava flows. Holes reported as unmineralized contain less than three continuous metres averaging at least 0.20 per cent Cu and are mostly confined to edges of the 543S deposit. Downhole surveys are made for all holes.

All technical information for the 543S exploration program is collected under a formal quality assurance and quality control program that has been reviewed by two independent qualified persons as defined in NI 43-101. Samples are taken under the direction of qualified geologists and stored in sealed bags. Samples are then placed in sealed containers and delivered by courier or common carrier to Accurassay Labs and ActLabs, both certified analytical facilities in Thunder Bay, Ont., Canada, for analysis. Copper and silver contents are determined at both labs using a four-acid digestion procedure.

The technical information contained in this news release has been reviewed and approved by Ross R. Grunwald, PhD, vice-president -- exploration, for the company. Dr. Grunwald is a qualified person as defined in NI 43-101.

Keweenaw copper project

The Keweenaw copper project covers about 13,000 acres of mineral rights, and is being explored under a mining venture agreement between Highland and BRP LLC. The agreement allows Highland to earn a 65-per-cent interest by spending $11.5-million (U.S.) in expenditures on the project and providing a feasibility study by Oct. 26, 2015. More information about the Keweenaw copper project is available in Behre Dolbear's NI 43-101 technical report, available on the company's website and on SEDAR.

New leased properties

In December, 2012, Highland, through its wholly owned subsidiary, Keweenaw Copper Co., entered into a lease agreement with a Michigan corporation for the exploration and development of two areas totalling approximately 6,400 acres of mineral and surface ownership in the upper peninsula of the state of Michigan. These properties are situated over the Nonesuch shale formation in areas that are largely unexplored but where historic data indicate copper and silver mineralization. The Nonesuch formation is the host of the former White Pine mine (production of 1.7 million tonnes of copper and 4.5 million ounces of silver from 1953 to 1996) and Orvana Minerals' Copperwood deposit (published reserve of 380,000 tonnes of copper and 3.5 million ounces of silver).

The lease has a primary term of 10 years and may be extended for an additional 10 years under certain conditions. Keweenaw will pay an annual rent to the lessor. Additional payments will be payable upon achievement of certain milestones as well as a sliding-scale net smelter return royalty upon commencement of production. The leased properties are not part of the mining venture agreement with BRP LLC. Exploration is expected to begin later in 2013.

We seek Safe Harbor.