Nordgold Reports Q4 and FY 2014 Financial and Operating Results

Amsterdam, Netherlands, February 24, 2015. Nord Gold N.V. (“Nordgold” or the “Company”, LSE: NORD), the internationally diversified low-cost gold producer, announces record annual gold production of 985 thousand gold equivalent ounces ("koz") and a 24% increase in EBITDA to US$487 million for 2014. All-in sustaining costs (1) ("AISC") decreased by 19% to US$887/oz, and all Nordgold's mines generated positive free cash flow.

2014 Highlights

• Gold production up 7% to record 985 koz.
• EBITDA (1) up 24% to US$487 million.
• Significant operational efficiencies resulted in the lowest quartile cost performance: total cash costs (1) (“TCC”) of US$675/oz and AISC of US$887/oz.
• Operating cash flow of US$329 million and free cash flow (1) of US$181 million. All mines cashflow positive.
• Board declares a dividend of 1.33 US cents per share / GDR for Q4 2014, representing full year 2014 dividend of US10.31 cents per share / GDR and approves share buyback programme.
• Bissa mine fully paid back the investment within 21 months after the launch.
• LTIFR improved by 19% to 1.23 versus 1.51 in 2013.
• Production guidance for 2015 is 925 — 985 koz with AISC of US$850-900/oz. 2015 capex (1) anticipated at approximately US$300 million, including US$95 million for construction of Bouly mine.

Operating Highlights

• Record gold production of 984.5 thousand gold equivalent ounces (“koz”), up 7% year-on-year (“YoY”) and exceeding by 3.6% the upper end of 2014 production guidance, raised in August 2014 to 900 — 950 koz from 870 — 920 koz.
• Increase in gold production driven by implementation of operational efficiency programmes across the entire asset portfolio:
  • Ore mined increased by 10% YoY due to optimised mining plans and mining fleet productivity improvements.
  • Ore milled increased by 19% YoY and recovery increased by 0.7 percentage point (“pp”) YoY to 81.7% due to implementation of various metallurgical projects and more advanced mill maintenance.
  • Bissa gold output reached 250.7 koz, exceeding its capacity and our FY 2014 production guidance of 200 koz driven by higher ore milled volumes and grade.
  • Comprehensive turnaround programme at Lefa mine resulted in increased gold production by 26% YoY to 205.1 koz.
  • Production at Buryatzoloto’s underground mines (Irokinda and Zun-Holba) increased 22% YoY to 119.7 koz supported by higher head grade in ore mined, which was achieved as a result of continued investments in new level development and the development of new ore blocks.
  • Taparko mine increased gold production 3% YoY to 112.0 koz driven by higher ore mined and ore milled volumes, as well as higher recovery.
  • Berezitovy had a record year, increasing production by 2% YoY to 122.8 koz due to higher throughput, grade and recovery.
• In Q4 2014, refined gold production was 237.6 koz, a 10% decrease compared with Q4 2013 and a 12% decrease compared with Q3 2014. Nordgold’s refined gold production in Q4 2014 was affected by the fact that some gold doré at Bissa, Taparko, Berezitovy and Neryungri mines was produced at the end of December 2014 after all planned shipments in Q4 2014 from the mines to the refineries had been completed. This doré has been shipped from the mines stockpiles to the refinery plants and sold in Q1 2015 at a higher price in Q1 2015.
• In Q4 2014, Nordgold’s doré production was 264.4 koz, broadly in line with Q4 2013 (259.8 koz) and Q3 2014 (268.1 koz).
• Gold doré production for the full year 2014 has amounted to 1,017.4 koz.

Financial Highlights

• For the full year 2014, the average realised gold price decreased by 8% YoY to US$1,266 per oz. The average realised gold price in Q4 2014 was US$1,184 per oz compared with US$1,250 per oz in Q4 2013, representing a fall of 5%.
• 2014 revenue decreased to US$1,216.1 million from US$1,271.3 million. Despite increased gold production in 2014, the revenue reduction was driven by a lower gold price and the fact that 24.5 koz of refined gold remained unsold and approximately 28.5 koz of gold doré was not refined at the end of 2014 due to shipment to the refinery schedule.
• EBITDA in 2014 increased by 24% YoY to US$487.0 million mainly driven by improved operational efficiencies and strict cost control, which offset lower gold prices. EBITDA margin in 2014 was 40.1% compared with 31.0% in 2013.
• Nordgold’s revenue, EBITDA, net profit, cash flows and dividend for Q4 2014 and for the full year of 2014 would potentially have been higher if 28.5 koz of gold doré had been converted to refined metal, as well as additional 24.5 koz of refined gold had been sold in the end of 2014. These volumes of gold have been refined and sold at a higher price in Q1 2015.
• Net profit for 2014 was US$123.0 million compared with a net loss of US$195.9 million (2) in 2013 (related to impairment of tangible and intangible assets recognised in 2013).
• Normalised net profit attributable to shareholders(3) in 2014 increased by 88% YoY to US$130.0 million. In Q4 2014 normalised net profit attributable to shareholders was US$16.9 million.
• In 2014, all Nordgold’s nine mines achieved TCC improvement compared with 2013. As a result, Nordgold’s consolidated TCC decreased by 20% YoY to US$675/oz, out of which 12% was driven by improved operational and consumption efficiency. The rest 8% of TCC reduction related to the benefit from the depreciation of the local currencies of the countries, where Nordgold operates, against the US dollar. We continue to implement cost optimisation and operational improvement programmes at all our mines.
• Nordgold’s consolidated AISC decreased by 19% YoY to US$887/oz in 2014 compared with US$1,091/oz in 2013. In 2014, eight out of Nordgold’s nine mines achieved AISC improvement and the most significant reductions were recorded at Lefa (down 30%), Taparko (down 26%), Buryatzoloto (down 30%), Berezitovy (down 20%) and Neryungri (down 28%).
• In 2014, Nordgold generated US$329.1 million of cash flow from operating activities (after interest and income tax paid), compared with US$310.7 million in 2013.
• Capex of US$157.8 million was lower than our guidance of US$180 million, representing a 34% decrease over 2013.
• Nordgold has met its target to achieve positive free cash flow at all its mine sites. The Company delivered US$180.7 million of free cash flow in 2014 compared with free cash flow of US$63.2 million in 2013 on the back of higher operating cash flow and lower capex.
• Cash and cash equivalents as at December 31, 2014 were US$317.1 million with net debt (1) of US$627.3 million, compared with US$244.0 million cash and cash equivalents and net debt of US$723.9 million as at December 31, 2013.

(1) Normalised EBITDA, free cash flow, capex, total cash costs, all-in sustaining costs and net debt as defined in the section for "Non-IFRS Financial Measures.
(2) The figures for Q4 2013 and full year 2013 were restated due to a change in accounting policy. For more information, please see Note 3 in the Interim Condensed Consolidated Financial Statements.
(3) Normalised Net Profit attributable to shareholders adjusted for the non-current assets and inventories impairment or utilisation of impairment.

“2014 was a year of transformational performance and progress for Nordgold. Despite the backdrop of falling gold price, we have delivered both on an operational and financial level, with record gold production, a very strong EBITDA increase of 24% and over $US180 million of free cash flow.
With all-in sustaining costs below US$900/oz, Nordgold has firmly placed itself within a quartile of lowest cost producers on the industry cost curve. The low cost production, coupled with our continued commitment to operational excellence and macroeconomic tail winds position the Company to deliver robust returns for shareholders in 2015.
In addition to our successful operational performance, Nordgold’s diverse and dynamic development pipeline has made a strong progress in 2014, providing a solid foundation for the Company’s growth for many years to come.” Nikolai ZelenskiChief Executive Officer of Nordgold

Telephone Conference and Q&A Session

Nikolai Zelenski, Chief Executive Officer of Nordgold, Dmitry Guzeev, Chief Financial Officer and Louw Smith, Chief Operating Officer will present the Company’s financial and operating results for Q4 and the full year of 2014 on a conference call to be held on February 24, 2014 at 1.30 pm London time (4.30 pm Moscow time). The presentation will be followed by a Q&A session. To participate in the telephone conference, please register in advance.

Registration Details

Conference Title: Nordgold's Presentation of Q4 2014 Financial Results

To participate in the telephone conference, please dial:

Great Britain

+44 203 367 9457
0808 238 1775

USA

+1 866 907 5925

Russia

+7 495 705 9472

Webcast

The presentation will be broadcast live over the Internet and will also be available as a recording after the conference.

To participate in the webcast please follow the link: