Nordgold Reports Q4 and FY 2013 Operating Results

Amsterdam, Netherlands, January 23, 2014. Nord Gold N.V. (“Nordgold” or the “Company”, LSE: NORD), the internationally diversified, pure-play gold producer strategically focused on emerging markets, announces record operating results for the fourth quarter and twelve months ended December 31, 2013.

• With 924.4 thousand gold equivalent ounces («koz») produced in full year 2013, Nordgold significantly exceeded its 2013 production guidance of 850 koz. This represents a production increase of 29% over 2012.
• Nordgold achieved record gold production in the last quarter, driven by the continued outperformance of Bissa and from the Company realising the benefits of its turnaround programme at underperforming mine sites. Q4 2013 production of 263.4 koz was a 30% increase on Q4 2012 (201.9 koz) and an 8% increase on Q3 2013 (244.7 koz).Production growth on a quarter-on-quarter (QoQ) basis was mainly driven by:
  • Bissa achieved record production of 75.7 koz, a 15% increase QoQ, supported by high-grade ore mined from the SW and Bissa Hill pits.
  • Taparko produced 31.1koz, an increase of 41% compared with Q3 2013 (22.1 koz) on the back of higher grade ore mined and better recovery.
  • Berezitovy produced 35.6 koz, an increase of 27% compared with Q3 2013 (28.0 koz) due to higher throughput and processed grade, and a significant increase in recoveries.
  • Buryatzoloto produced 26.2 koz, an increase of 12% compared with Q3 2013 (23.4 koz) due to increased volumes of processed ore.
• Lost time injury frequency rate (LTIFR) for 2013 was 1.51, an improvement of 15% compared with 2012. In Q4 2013, the LTIFR was 1.33, an improvement of 24% compared with Q4 2012 (1.74) and 29% compared with Q3 2013 (1.88).
• For the full year 2013, the average realised gold price was US$1,376 per oz, an 18% decrease over 2012. The average realised gold price in Q4 2013 was US$1,250 per oz compared to US$1,711 per oz in Q4 2012, representing a fall of 27%.
• Despite a much lower gold price, revenues in 2013 increased by 6% from 2012 to US$1,271.3 million, due to higher gold production and sales volumes. Revenues for Q4 2013 increased by 1% from Q3 2013 and decreased by 5% compared with Q4 2012 to US$328.8 million.
• Unaudited net debt at December 31, 2013 was approximately US$721million, a 7% decrease from US$775.0 million at the end of Q3 2013, reflecting the strong positive free cash flow generated in the challenging market environment of Q4 2013.

Production Outlook

Nordgold expects 2014 full year production to be in the range of 870 — 920 koz.

2014 gold production will be mainly determined by the following:

• The Bissa mine process facility will operate at full capacity and produce around 200 koz in the full year 2014 compared with the outperformance of 254.3 koz in 2013. The decline in production is driven by lower head grade as anticipated in the mine plan.
• Within the pilot stage operation at Gross we expect to process 1.8 million tonnes of ore at the satellite Neryungri mine and to produce approximately 30 koz of gold in 2014.
• We expect to drive additional growth from our existing assets, including benefits from:
  • The turnaround programme at Lefa; including further operational improvements, an optimised mine plan and the mobile equipment fleet management strategy.
  • The development of Taparko’s high-grade Bouroum pit, reduced mill downtime and further optimisation of gold recovery by managing ore blend and other process improvements.
  • The implementation of key operational improvement initiatives at both the Buryatzoloto mines of Irokinda and Zun-Holba, targeting increased ore volumes at higher grade.
• Nordgold management will continue to invest in its Business System of Nordgold (BSN) programmes, and target cash improvements of US$50 million in 2014 from the implementation of best in class operating processes. Initiatives include increased mobile equipment and fixed plant equipment availability, utilisation and productivity, supported by further investment in training of supervisors and operators.
• Management is focused on achieving increased efficiency at all its mines to reduce costs, as it continues to roll out BSN throughout the group.

“I am delighted that Nordgold has had yet another record year, increasing its production by 29% relative to 2012, and significantly exceeding the production guidance. This production growth was driven by improvements in all critical KPIs, including grade, recovery and processing volumes and is testament to the success of the improvements we implemented at underperforming mine sites, combined with the superb performance of our new Bissa mine. The success of Bissa demonstrates our ability to design, develop and complete a world-class new mine project from scratch on time and on budget.
I expect all our mine sites to operate at capacity in 2014 as we make further production efficiencies and deliver on the optimisation of our mine plans. In 2014 we will continue to maintain our focus on our key metrics: safety and operational efficiency, a reduction in costs, working capital and capex. Our target remains for all our operating mines to be free cash flow positive in 2014.” Nikolai ZelenskiChief Executive Officer of Nordgold