Nordgold Reports Q3 and 9 months 2014 Operating Results

Amsterdam, Netherlands, October 22, 2014 - Nord Gold N.V. (“Nordgold” or the “Company”, LSE: NORD), the internationally diversified, pure-play gold producer strategically focused on emerging markets, announces strong Q3 numbers: 6% growth in revenue despite challenging price environment; and on track to achieve the upper end of full year production range guidance of 900-950 koz.

  • Lost time injury frequency rate (LTIFR) for the first 9 months of 2014 was 1.00, a significant improvement compared with the same period last year (2013: 1.58). In Q3 2014, the LTIFR was 1.55, an improvement of 18% compared with Q3 2013 (1.88), but higher than in Q2 2014 (1.08).
  • Gold production in Q3 2014 was 270.6 thousand gold equivalent ounces (“koz”), an 11% increase compared with Q3 2013 (244.7 koz) and a 2% increase compared with Q2 2014 (265.2 koz). For the first 9 months of 2014 production reached 746.9 koz, a 13% increase compared with the same period in 2013.
  • For the full year 2014, the Company is targeting the upper end of the original FY 2014 production range of 900-950 koz.
  • In the first 9 months of 2014, eight out of Nordgold’s nine mines achieved a year-on-year (“YoY”) production increase mainly as a result of measures the Company has implemented to improve operational efficiency at the mines. Double digit growth was recorded at Bissa, Taparko, Lefa, both the Buryatzoloto underground mines (Irokinda and Zun-Holba) and Neryungri.
  • The average realised gold price in Q3 2014 was US$1,281 per oz, a 3% decrease compared with Q3 2013 (US$1,327/oz) and a 1% decrease compared with Q2 2014 (US$1,292/oz). The average realised gold price for the first 9 months of 2014 was US$1,290 per oz compared with US$1,426 per oz for the same period of 2013, a fall of 10%.
  • Despite a lower gold price, revenues in Q3 2014 were US$344.8 million, a 6% increase compared with US$325.3 in Q3 2013 and a 1% increase compared with US$342.1 in Q2 2014, due to higher gold production and sales volumes. For the first 9 months of 2014, Nordgold revenues increased by 2% YoY to US$961.8 million, despite a 10% decrease in the average realised gold price.
  • Unaudited net debt at September 30, 2014 decreased to approximately US$635.0 million compared with US$687.0 million at the end Q2 2014, reflecting the strong positive free cash flow generated.


Message from the CEO

This has been another excellent operating performance by the Company, a period in which we continued to demonstrate our ability to drive production growth while keeping a tight rein on costs and a focus on safety. Eight of our nine operating mines have achieved quarter on quarter production increases and I am particularly pleased with the continued excellent performance of Bissa and improvement at Lefa and Buryatzoloto mines, testament to the investments we have made in the assets and the efforts of the team on the ground. As a result, we are pleased to be able to guide towards the upper end of our full year production target.

It is this proven operating performance, the focus on costs, and our determination to control the things on which we have a direct influence, that has enabled us to report another increase in revenues, despite a lower gold price environment. We continue to benefit from a robust balance sheet and an exciting development pipeline, which we will progress carefully.

As we approach the end of the year, we remain committed to our stated strategy, to maintain cost discipline and improve efficiency while staying dedicated to improving safety across the Company. We are well on track to meet our target of achieving positive free cash flow generation at all our mines.

Nikolai Zelenski, Chief Executive Officer, Nordgold
Press release
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