Nordgold Reports Q3 and 9m 2014 Financial and Operating Results

Amsterdam, Netherlands, November 20, 2014. Nord Gold N.V. (“Nordgold” or the “Company”, LSE: NORD), the internationally diversified, pure-play gold producer, announces a 33% rise in EBITDA to US$391.5 million in 9m 2014, with continued operational efficiencies and higher production offsetting the lower gold price. Nordgold also generated free cash flow at all mine sites in the quarter.

9 months 2014 Highlights

• Gold production increased by 13% year-on-year («YoY») to 746.9 thousand gold equivalent ounces («koz»). Nordgold reaffirms it is on track to reach the upper end of FY 2014 gold production guidance of 900-950 koz.
• EBITDA increased by 33% to US$391.5 million with continued strong production performance and efficiencies offsetting the lower gold price.
• Total cash costs («TCC») decreased by 22% to US$694/oz and all-in sustaining costs («AISC») decreased by 21% to US$887/oz. Nordgold is reducing its FY 2014 AISC guidance for the second time this year. The new FY 2014 AISC range is US$900/oz — US$950/oz.
• Cash flow from operating activities was US$272.0 million and positive free cash flow reached US$161.4 million.
• The Board has declared a dividend of 3.64 US cents per share / GDR for Q3 2014, bringing the total dividend for 9m 2014 to 8.98 US cents per share / GDR.
• LTIFR improved by 37% to 1.00 compared with LTIFR of 1.58 for 9m 2013.

Operating and Financial Highlights

• Gold production in Q3 2014 was 270.6 koz, an 11% increase compared with Q3 2013 (244.7 koz) and a 2% increase compared with Q2 2014 (265.2 koz).
• In 9m 2014, production reached 746.9 koz, a 13% increase compared with the same period in 2013. In the period, eight out of Nordgold’s nine mines achieved a year-on-year production increase mainly as a result of measures the Company has implemented to improve operational efficiency. Double digit growth was recorded at Bissa, Taparko, Lefa, both the Buryatzoloto underground mines (Irokinda and Zun-Holba) and Neryungri.
• Despite a lower gold price, revenue in Q3 2014 was US$344.7 million, a 6% increase compared with US$325.3 million in Q3 2013 and a 1% increase compared with US$342.1 million in Q2 2014, due to higher gold production and sales volumes. In 9m 2014, Nordgold revenue increased by 2% YoY to US$961.8 million, despite a 10% decrease in the average realised gold price.
• Net profit for Q3 2014 was US$56.9 million compared with US$49.1 million in Q2 2014 and US$23.2 million (1) in Q3 2013. In 9m 2014, net profit was US$130.6 million compared with a net loss of US$166.7 million (1) in 9m 2013 (related to impairment of tangible and intangible assets recognised in Q3 2013).
• Normalised net profit attributable to shareholders (2) for Q3 2014 was US$45.8 million compared with US$48.0 million in Q2 2014 and US$48.8 million in Q3 2013. In 9m 2014 normalised net profit attributable to shareholders increased by 35% YoY to US$113.1 million.
• In Q3 2014, TCC were US$669 per ounce, a 21% decrease compared with Q3 2013 (US$843/oz) and a 4% decrease compared with Q2 2014 (US$699/oz) mainly due to higher production volumes and improved operational and consumption efficiency. In Q3 2014, eight out of Nordgold’s nine mines achieved TCC improvement compared with Q3 2013 and the most significant reductions were recorded at Lefa (down 44%), Berezitovy (down 30%), Neryungri (down 27%) and Buryatzoloto (down 8%). In 9m 2014, TCC were US$694/oz, a 22% decrease compared with US$885/oz in 9m 2013. We continue to implement cost optimisation and operational improvement programmes at all our mines.
• In 9m 2014, eight out of Nordgold’s nine mines achieved improvement in all-in sustaining costs. As a result, Nordgold’s consolidated AISC decreased by 21% YoY to US$887/oz in 9m 2014 compared with US$1,118/oz in 9m 2013.
• In 9m 2014, Nordgold generated US$272.0 million of cash flow from operating activities (after interest and income tax paid), compared with US$205.3 million in 9m 2013. In Q3 2014, cash flow from operating activities was US$138.3 million, compared with US$101.8 million in Q3 2013 and US$83.8 million in Q2 2014.
• Capital expenditure («capex») (3) for 9m 2014 decreased by 39% YoY to US$111.0 million (including US$16.9 million for exploration and evaluation).
• Nordgold has met its target to achieve free cash flow at all its mine sites. The Company delivered US$88.8 million of positive free cash flow (3) in Q3 2014 compared with free cash flow of US$44.9 million in Q3 2013. In 9m 2014, the Company delivered US$161.4 million of positive free cash flow (3) compared with free cash flow of US$14.4 million in 9m 2013 on the back of significantly higher operating cash flow and lower capex.
• Cash and cash equivalents as at September 30, 2014 were US$366.0 million with net debt (3) of US$635.0 million, compared with US$244.0 million cash and cash equivalents as at December 31, 2013, and net debt of US$723.9 million.

(1) The figures for Q3 2013 and 9m 2013 were restated due to a change in accounting policy. For more information, please see Note 2 in the Interim Condensed Consolidated Financial Statements.
(2) Normalised Net Profit attributable to shareholders adjusted for the non-current assets and inventories impairment or utilisation of impairment.
(3) For detailed definition, please see «Non-IFRS Financial Measures».

Outlook Update

• Nordgold reaffirms it is on track to reach the upper end of FY 2014 gold production guidance of 900-950 koz.
• Nordgold expects FY 2014 capex of approximately US$180 million, 10% lower than the original guidance of US$200 million.
• Based on the significant improvement in AISC in 9m 2014, Nordgold is further reducing its FY 2014 AISC guidance to US$900/oz — US$950/oz (previous range was US$950/oz — US$1,000/oz).

“Nordgold has delivered another very strong quarter of performance, significantly increasing its EBITDA in the environment of falling gold prices. In the nine months of 2014 we have generated free cash flow of US$161.4 million and we remain well-positioned for further sustained free cash flow generation highlighting the high quality of the Company mines. The Board is therefore pleased to be able to approve a dividend of 3.64 cents per share for the quarter.
Nordgold’s strong financial results are testament to our low-cost asset base, combined with proven operational excellence of the management team, and its commitment to shareholder value. We remain well positioned to manage the business through this period of market volatility.” Nikolai ZelenskiChief Executive Officer of Nordgold

Telephone Conference and Q&A Session

Nikolai Zelenski, Chief Executive Officer of Nordgold, Dmitry Guzeev, acting Chief Financial Officer and Louw Smith, Chief Operating Officer will present the Company’s financial and operating results for Q3 and 9m 2014 on a conference call to be held on November 20, 2014 at 1.00 pm London time (4.00 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 Q3 2014 Financial Results

To participate in the telephone conference, please dial:

Great Britain

+44 (0) 203 043 2439
08082381775

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.

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