Nordgold and Vostochnaya Technica sign US$60 million supply contract for Gross project
London, United Kingdom, 25 August 2017 - Nord Gold SE (“Nordgold” or the “Company”), an internationally diversified gold producer, and Vostochnaya Technica (“VT”), a Cat® designated dealer in Russia, are pleased to announce that Partners have signed an agreement to supply primary mining equipment and services to the Gross project. Total value of agreement is estimated to reach US$60 mln (3.4 bln RUB) over 5 years.
The agreement includes providing high quality training to Nordgold employees in areas such as operations and maintenance, utilising VT’s training simulators. Several levels of staff education will be implemented to ensure the highest level of operational safety for employees on site, in-line with Nordgold’s core objectives across all of its assets globally.
The agreement also includes a collaborative partnership to implement Caterpillar’s Cat® MineStar™ HEALTH technology at the Gross mine, where wireless data acquisition is transferred from equipment to central engineering services. This will ensure low costs of operation with best practice levels of reliability. Contamination control, wireless inspection technology, oil sample trending and ultrasonic testing of undercarriage are also part of the agreement.
Louw Smith, Chief Operating Officer of Nordgold, commented:
“Vostochnaya Technica has been awarded what is a landmark agreement to supply equipment for the Gross project. Nordgold developed an industry leading evaluation model to analyse offers based on key criteria of technical, training, component, warranty, parts, technology and innovation support. The structure of the agreement challenges our partner to provide best practice levels of support to ensure the sustainable performance of the fleet to meet the production plans at Gross, which after launch in 2018 will become Nordgold’s largest mine in Russia at full capacity. Construction is underway to build world class facilities, supporting the implementation of best practice maintenance strategy and execution.”
Gavin Knight, VT General Director, commented:
“Vostochnaya Technica is honored to have Nordgold as a business partner and Cat equipment user. World class best practices of equipment management for maximum return on investment is a goal we share with Nordgold. We are committed to support Nordgold in this endeavor through our on and off-site support structures. We thank Nordgold for the opportunity to supply this significant order and are delighted to be part of the Gross project.”
Site assessments using Caterpillar’s global templates have already been conducted by VT to support the nearby Neryungri project to build maintenance systems and capability to meet the challenge of reaching best practice levels of maintenance management.
Gross is a large scale, all-season open-pit heap leach project in Yakutia, Russia, adjacent to the existing Neryungri mine (the Tabornoe gold deposit). Proven and probable gold reserves at Gross, as at December 31, 2016, were 4.4 moz, while measured and indicated resources were 7.6 moz and inferred resources were estimated at 0.9 moz.
The Gross mine will provide approximately 350 jobs during the construction period over the next two years and 800 permanent jobs for its 17-year life span. The construction of the Gross mine started in June, 2016. First gold is expected to be poured during the first half of 2018.
A Feasibility Study confirmed the economic viability of an all-season open-pit heap leach project giving an IRR of almost 40% at a long-term gold price of US$1,250/oz. Gross is expected to mine approximately 12 million tonnes of ore and to produce approximately 230 koz of gold per year at full production for 17 years.
The proximity of Neryungri is enabling Nordgold to benefit from economies of scale, an expert knowledge of the local geology and shared expertise from Neryungri’s management team.
Nordgold is an internationally diversified gold producer established in 2007. Nordgold has a proven track record of operational excellence and benefits from a significant international development pipeline. The Company is relentlessly focused on shareholder value, committed to running safe, efficient, profitable operations, which enable it to generate strong cashflows and in turn, continue to invest in its pipeline of new growth opportunities while generating returns for investors. In 2016, Nordgold produced 869 koz of gold.
Nordgold operates 9 mines (4 in Russia, 3 in Burkina Faso and one each in Guinea and Kazakhstan). It has one project in construction phase (Gross in Russia), several prospective projects and a diverse portfolio of early-stage exploration projects and licences in Burkina Faso, Russia, French Guiana and Canada. Nordgold employs over 8,000 people.
For further information on Nordgold please visit the Company’s website www.nordgold.com.
About Vostochnaya Technica
Vostochnaya Technica LLC is a Caterpillar dealer for Siberia and the Russian Far East offering sales, aftersales support and rental of Cat equipment to customers in the mining, quarry, construction, forestry and road construction industries as well as Caterpillar power systems solutions. The company was founded in 1998 and has 27 branches and over 850 employees with head office in Novosibirsk. Vostochnaya Technica is a wholly owned subsidiary of South African listed Barloworld Limited (JSE: BAW) which celebrates 90 years as a Caterpillar dealer in 2017.
For further information on Vostochnaya Technica please visit the Company’s website www.vost-tech.ru.
For further information on Barloworld Limited please visit the Company’s website www.barloworld.com.
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