Nordgold Reports Q4 and FY 2013 Financial Results

Amsterdam, Netherlands, February 24, 2014. Nord Gold N.V. (“Nordgold” or the “Company”, LSE: NORD), the internationally diversified, pure-play gold producer strategically focused on emerging markets, announces its financial and operating results for the fourth quarter and twelve months ended December 31, 2013.

Important milestones achieved in 2013:

• Gold production increased by 29% to 924.4 thousand ounces (“koz”).
• The new Bissa mine launched in January 2013 significantly boosted annual production and improved the consolidated cost base.
• All-in sustaining costs decreased by 10% to US$1,062/oz and TCC decreased by 2% to US$819.
• Cash flow from operating activities of US$310.7 million and positive free cash flow of US$63.2 million.
• A dividend of 1.43 US Cents per share / per GDR has been declared for the three months ended December 31, 2013, which brings the total dividend for the year to 7.86 US Cents per share / per GDR.
• LTIFR improved by 15% to 1.51compared to LTIFR of 1.77 in 2012.

Financial Highlights

• 2013 revenues increased by 6% from 2012 to US$1,271.3 million despite a materially lower gold price, mainly due to increased gold sales, which were achieved as a result of higher production volumes. Revenues for Q4 2013 increased by 1% from Q3 2013 and decreased by 5% compared with Q4 2012 to US$328.8 million.
• In 2013, total cash costs (“TCC”) were US$819 per ounce, down from US$836 per ounce in 2012 due to the launch of the low-cost Bissa mine and the implementation of efficiency programmes. TCC for Q4 2013 was US$758/oz, a 10% decrease compared with Q4 2012 and a 4% decrease compared with Q3 2013. The main contributors to the quarter-on-quarter TCC improvement were Taparko (down 21%), Berezitovy (down 10%), Neryungri (down 10%) and Lefa (down 3%). We continue to implement cost optimisation programmes at all our assets.
• All-in sustaining costs (AISC) were US$1,062/oz for the full year 2013, which is 10% lower than in 2012 (US$1,174/oz). Q4 2013 AISC of US$1,016/oz was a 14% improvement on Q4 2012 (US$1,176/oz) and in line with Q3 2013 (US$1,015/oz). We expect consolidated AISC to be in the range of US$1,050/oz — US$1,100/oz for the full year 2014, which in the absence of large standalone capex projects, will enable Nordgold to generate meaningful positive free cash flow.
• EBITDA for 2013 was US$420.6 million, a 15% decrease compared to 2012 (US$493.0 million). EBITDA for Q4 2013 was US$99.6 million, a decrease of 31% over Q4 2012 and 8% over Q3 2013. Despite lower gold prices in 2013, higher production and strict cost control have helped shield EBITDA from a larger decrease. EBITDA margin for 2013 was 33.1%.
• In 2013 Nordgold generated US$310.7 million of cash flow from operating activities (after interest and income tax paid), compared with US$121.6 million in 2012.
• Net loss for 2013 was US$170.0 million compared to net income of US$76.0 million in 2012. Net loss for Q4 2013 was US$29.9 million compared to net loss of US$47.2 million in Q4 2012. In accordance with Nordgold’s accounting policies, the Company reviewed the carrying value of tangible and intangible assets including, exploration and evaluation assets, inventories and other operating assets. Consideration was given to a range of indicators including the decline in gold price that occurred in 2013. This resulted in one-off non-cash write-offs for the second half of 2013 of approximately US$54.5 million(2), bringing total write-offs for the full year 2013 to approximately US$290.4 million (2).
• Net income for 2013, adjusted for the non-current assets and inventories impairment, was US$118.3 million, compared with adjusted net income of US$178.0 million in 2012. In Q4 2013 adjusted net income was US$22.3 million, compared with US$34.8 million in Q3 2013 and US$54.8 million in Q4 2012.
• Capital expenditure (“capex”) for the full year 2013 was US$237.7 million (including US$79.0 million for exploration and evaluation), a 50% decrease over 2012. In 2014, we expect capex to be approximately US$200 million, including exploration costs of US$60 million.
• The Company delivered US$48.8 million of positive free cash flow in Q4 2013, compared to negative free cash flow in Q4 2012 (US$75.1 million), on the back of higher operating cash flow and reduced capex. For the full year 2013, Nordgold recorded positive free cash flow of US$63.2 million, compared with negative free cash flow in 2012 of US$334.1 million.
• Cash and cash equivalents as at December 31, 2013 were US$244.0 million with net debt at US$723.9 million, compared to US$45.0 million cash and cash equivalents as at December 31, 2012, and net debt of US$680.5 million.
• The Board of Directors has approved an interim dividend of 1.43 US cents per share or per Global Depositary Receipt in respect of the three months ended December 31, 2013, payable to shareholders on the register as of March 03, 2014.

(2) On a post taxation basis. For a pre-taxation basis, please see financial statements

“We have delivered a strong set of results in what has been a challenging year for the sector. We have focused our efforts on reducing costs and improving efficiency at our mines. Bissa has exceeded our expectations and this has translated into record production and significantly improved All-In Sustaining Cost performance across the Company. We have also generated strong free cash flow for the year and returned US$71 million in dividends to shareholders. Our target remains for all our mine sites to be free cash flow positive in 2014. Looking ahead, we will remain highly focused on managing our cost base, and further improving operating performance at our mine sites while delivering on our mine plans. We will also maintain the financial flexibility to invest in new projects where we believe they can add real shareholder value. Above all, we will continue to keep the safety of all our employees at the heart of everything we do and, therefore, we are pleased to report the LTIFR reduced by 15% during 2013.” Nikolai ZelenskiChief Executive Officer of Nordgold

Telephone Conference and Q&A Session

Nikolai Zelenski, Chief Executive Officer of Nordgold, Sergey Zinkovich, Chief Financial Officer and Louw Smith, Chief Operating Officer will present the Company’s financial and operating results for the fourth quarter and the full year 2013 on a conference call to be held on February 24, 2014 at 12.30 pm London time (GMT). 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 Presentation of Q4 and full year 2013 Financial Results

To participate in the telephone conference, please dial:

Great Britain

44-20-3367-9461 (Local access)
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.

To participate in the webcast please follow the link: