Financials
Our strategy of identifying opportunity, streamlining, and developing our operations has generated rapid growth and strong financial performance since Nordgold was founded in 2007. Our financial highlights in 2011 include 57% growth in sales, resulting in revenue of $1,182 million and EBITDA growth of 55% to $574 million, with an impressive EBITDA margin of 49%.
Financial summary
Gold production ('000 ounces)
Gold produced increased by 28% to 754 Koz in 2011. This growth was primarily driven by the consolidation of the Lefa mine coupled with the higher productivity at key mines – Berezitovy and Neryungri.
Revenue (US$m)
Growing gold demand from the developing economies and unstable macroeconomic environment were the key drivers for the gold price rally observed in 2011. Our average realized gold price was up 25% in 2011 versus 2010 reaching US$ 1,567/oz.
Revenue in 2011 totaled $1,182m, up 57% from 2010 ($754m), driven by higher realized gold prices and increased production. In 2011, 54% of revenue originated outside of Russia, with Africa as chief contributor with 43%, compared to 34% in 2010.
Total cash cost per ounce produced (US$/oz)
Total cash costs per ounce produced increased from $556.6 in 2010 to $687 in 2011. This increase was a result of higher production cash costs at the Lefa and Suzdal mines, as well as full year consolidation of higher cost the Lefa mine.
Normalised EBITDA (US$m)
Higher cash costs were compensated for by the growing realized gold prices and supported an industry-high EBITDA margin of 49%. Continued success in driving mine efficiency and operational improvement resulted in an EBITDA increase of 55% in 2011 to US$ 574m.
Cash flow from operations (US$m)
Our business continues to generate significant cash flows reflecting healthy and efficient underlying operations. In 2011, operating cash flow increased by 60% to a record $398m.
Strong cash flow is central to our longer-term strategy, enabling us to efficiently fund mine expansions and value accretive acquisitions, whilst also maintaining the capacity to return surplus cash to shareholders.
Capital expenditure, exploration and evaluation (US$m)
Nordgold has a focused capex strategy which aims to deliver growth from both existing and new assets. In 2011, capex totaled $319m, with a particular focus on Nordgold’s key development projects: Lefa, Gross, and Bissa.