Nordgold Reports FY 2011 Results

Amsterdam, Netherlands, 24 February 2012 – Nord Gold N.V, (“Nordgold” or the “Company”, LSE: NORD), an independent pure-play gold producer focused on emerging markets, announces its financial results for the fourth quarter and the full year ended 31 December 2011.

Full Year Financial Highlights

  • Production up by 28% to 754 koz (FY 2010: 589 koz)
  • Average realised gold price of US$ 1,567, up 25% (FY 2010: US$ 1,251)
  • Revenue of US$1,182m, up 57% (FY 2010: US$754m)
  • EBITDA of US$ 574m, up 55% (FY 2010: US$ 370m)
  • 2011 EBITDA margin of 49% (FY 2010: 49%)
  • Net income up 89% to US$ 252m (FY 2010: US$ 133m)
  • Cash flow from operating activity of US$ 398m, up 60% (FY 2010: US$: 249m)

Full Year Operational Highlights

  • Total volume of ore processed during 2011 was 15.6 million tonnes, a 20% increase from the previous year, driven by capacity improvements and operational optimisation at the LEFA mine in Guinea and the Berezitovy, Neryungri and Aprelkovo mines in Russia.
  • Head grade down 10% in 2011 to 1.84 g\t mainly driven by increased lower grade ore throughput at the LEFA, Neryungri and Aprelkovo mines with lower grade ore.
  • Gold equivalent production in 2011 increased by 28% as a result of higher productivity in key business units, with particularly strong results at Berezitovy and Neryungri, up 50% and 24% respectively against 2010. The growth was also effected by acquisition of Crew Gold Corporation in August 2010.
  • 2012 production guidance of 800-850 koz.

Corporate Developments

  • Bissa project construction in Burkina Faso progressing rapidly with engineering works mostly complete; on track to deliver first gold in H1 2013.
  • Gross project in Russia on track to complete pre-feasibility in May/June 2012.
  • Separation from OAO Severstal and successful listing of GDRs on the London Stock Exchange in January 2012

Financial summary

     

    Q4

    Q3

    FY

    US$000

    2011

    2010

    %

    2011

    2011

    2010

    %

    Revenue

    385,261

    268,818

    +43%

    253,435

    1,182,129

    754,151

    +57%

    EBITDA

    194,666

    136,197

    +43%

    111,279

    574,256

    369,733

    +55%

    EBITDA margin

    50.6%

    50.7%

     

    43.9%

    48.6%

    49.0%

     

    Net income/(loss)

    78,264

    34,505

    +127%

    43,759

    252,046

    133,415

    +89%

    Cash flow from operating activity

    184,237

    102,123

    +80%

    38,999

    397,557

    249,114

    +60%

    Capital expenditures

    122,995

    56,463

    +118%

    91,113

    318,566

    170,192

    +87%

    incl. exploration

    39,648

    23,107

    +72%

    36,068

    115,143

    64,799

    +78%

    Free cash flow

    68,626

    44,293

    +55%

    (42,516)

    98,553

    114,902

    -14%

    Cash and equivalents

    217,133

    212,204

    +2%

    184,478

    217,133

    212,204

    +2%

    Total debt

    400,390

    397,072

    1%

    439,500

    400,390

    397,072

    +1%

    Net debt

    (183,257)

    (184,868)

    -1%

    (255,022)

    (183,257)

    (184,868)

    -1%

    TCC US$m

    144

    122

     +17%

    121

    513

    326

    +57%

    TCC US$/oz

    715

    636

    +13%

    687

    687

    557

    +23%

Philip Baum commented:

2011 has been a year of significant progress for Nordgold. We successfully completed the corporate separation from OAO Severstal and listed GDRs on the London Stock Exchange whilst continuing to grow and build an attractive investment proposition. The full year results demonstrate very clearly Nordgold’s key strengths and reflect our ability to create significant value from emerging markets assets

Philip Baum, Chairman of Nordgold

Nikolai Zelenski added:

We are focused on creating shareholder value through our ability to run highly efficient mining operations across our geographically diversified emerging markets portfolio. Our development pipeline is exceptionally strong and we are progressing on time and on budget with our two key greenfield projects, Bissa and Gross. We remain highly cash generative, which will enable us to fully finance our ongoing capex requirements, our exploration and development projects as well as making dividend payments to shareholders. Looking ahead to our first year as a public company, we expect record production of 800-850 koz in 2012 and we anticipate declaring a maiden dividend at the time of the interim results. We are very confident that 2012 will see further significant achievements across the business.

Nikolai Zelenski, CEO of Nordgold

Telephone conference and Q&A session

Nordgold will host a webcast and conference call for analysts and investors on 24th February at 10.00am London time. CEO Nikolai Zelenski will present Company’s financial results and will provide details of Nordgold’s growth plans.

To participate in the telephone conference please register in advance.

Conference Title: Nordgold IFRS 2011 Results Presentation
Conference ID: 4516617

Russia

810-8002-198-4011 (Toll free)

Great Britain

44-20-7190-1590 (Local access)
0800-358-5256 (Toll free)

USA

1-480-629-9822 (Local access)
1-877-941-1469 (Toll free)

Webcast

The press and analyst conference will also be broadcast live over the Internet, and will be available as a recording after the conference. The live service also allows for written questions to be submitted.

To register and participate in the webcast please follow the link: http://www.cyber-presentation.de/cgi-bin/visitors.ssp?fn=visitor&id=1660

Materials

The Company’s financial results for 2011 and the presentation materials will be available from 07:00 AM London time on February 24th on the company’s official website: www.nordgold.com.

Further information:

Nordgold

Alexey Shchedrin
Head of Financial Communications & Investor Relations
Tel: +7 (917) 502 2048

Maitland

Peter Ogden
David Sturken
James Devas
Tel: +44 (0)20 7379 5151

Notes to Editors

About Nordgold

Nordgold was established in 2007 as the gold producing division of OAO Severstal and has since developed into a leading, internationally diversified gold producer, with a strategic focus on emerging markets. On 19 January 2012 Nordgold was spun-off from Severstal and commenced trading as an independent public company via a listing of GDRs on the London Stock Exchange.

Nordgold has achieved rapid growth both organically and through acquisitions, increasing production from approximately 21 koz in 2007 to 754 koz in 2011, a CAGR of 145%. In 2011, the Company produced half of its output outside Russia, highlighting the Company’s increasingly global footprint.

Nordgold now boasts a diverse portfolio of high quality producing assets. The company’s portfolio consists of eight producing mines, two development projects, five advanced exploration projects and a broad portfolio of early exploration projects and licences. The Company’s operations are located in the Russian Federation, Kazakhstan, Guinea and Burkina Faso.

The Company expects to maintain its strong growth profile, with a production target of over 1 moz from its operating mines and development projects by 2013.

CONTACTS

tel.+7 495 644 44 73

Irina Dormidontova

RECRUITMENT MANAGER
tel.+7 495 644 44 73

tel.+7 495 644 4473