Nordgold Reports Q3 2013 Financial Results

Amsterdam, Netherlands, November 11, 2013. 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 third quarter and nine months ended September 30, 2013.

Financial Highlights

• Revenue for Q3 2013 increased by 1% from Q3 2012 and by 2% from Q2 2013 to US$325.3 million despite a materially lower gold price. Revenue for the first 9 months of 2013 increased by 11% versus the same period in 2012 to US$942.4 million, mainly due to increased gold sales, which was acheived as a result of higher production volumes.
• Total cash costs (“TCC”) for Q3 2013 were down 5% from Q3 2012 at US$791 per ounce. We achieved quarter-on-quarter TCC improvement at eight of our nine mines, with the most significant decreases at Lefa (down 20%) and Buryatzoloto (down 14%). For the first 9 months of 2013 TCC was US$844/oz, up from US$833/oz for the same period 2012. We continue to implement cost optimisation programmes at all of our assets.
• In Q3 2013 all-in sustaining cost3 (AISC) for the Company was US$1,008/oz, which is 5% lower than in Q2 2013. For the first 9 months of 2013, AISC was US$1,071/oz.
• EBITDA for the first 9 months of 2013 was US$321.0 million, an 8% decrease compared to the same period in 2012 (US$350.1 million). EBITDA for Q3 2013 was US$108.2 million, an increase of 2% over Q2 2013 and down 18% over Q3 2012. Despite lower gold prices in the reporting period, higher production and strict cost control have helped shield EBITDA from a larger decrease. EBITDA margin for the first 9 months of 2013 was 34.1%.
• Net income for Q3 2013 was US$34.8 million, compared to US$58.0 million in Q3 2012. For the first 9 months of 2013, net income adjusted for the non-current assets and inventories impairment was US$96.0 million, compared to US$123.2 million for the same period of 2012.
• Capital expenditure (“capex”) for the first 9 months of 2013 was US$181.8 million (including US$59.5 million for exploration), a 47% decrease over the same period of 2012. We reiterate our 2013 capex guidance of approximately US$250 million, including exploration. In 2014, we expect capex to be approximately US$200 million, including exploration.
• Cash and cash equivalents as at September 30, 2013 were US$263.8 million with net debt at US$775.0 million, compared to US$45.0 million cash and cash equivalents as at December 31, 2012, and net debt of US$680.5 million. In Q3 2013 Nordgold generated US$101.8 million of cash flow from operating activities (after interest and income tax paid). Cash used for the purchase of property, plant and equipment, including additions to exploration and evaluation assets, amounted to US$57.3 million in Q3 2013.
• The Company recorded US$44.6 million of positive free cash flow in Q3 2013, compared to negative free cash flow in Q3 2012 (US$44.1 million) and in Q2 2013 (US$1.7 million), on the back of higher operating cash flow and reduced capex. As a result, Nordgold has turned free cash flow positive (US$14.4 million) for the first 9 months of 2013.
• Nordgold introduces the payment of interim quarterly dividends. The targeted payout ratio going forward is 30% of net profit atttibutable to shareholders. The Board of Directors of Nordgold has approved an interim dividend of 2.38 US cents per share or per Global Depositary Receipt in respect of the three months ended September 30, 2013, payable to shareholders on the register as of 29 November 2013.

(3) All-in sustaining costs as defined in the section for Non-IFRS financial measures

Outlook and Growth Drivers

Gold production in Q3 2013 has been 244.7 thousand gold equivalent ounces (“koz”), a 26% increase on Q3 2012 (194.0 koz) and a 5% increase on Q2 2013 (232.6 koz). For the first 9 months of 2013 production has reached 661 koz, a 28% increase compared to the same period of 2012.

For the full year 2013, the Company is anticipating to reach 850 koz, which is the top end of our FY 2013 production range guidance.

“We achieved a solid quarter’s production in Q3 giving us a strong foundation to deliver on our full year production targets. Despite the downward pressure on gold prices, we have delivered a resilient EBITDA result, record quarterly operating cash flow, and robust free cash flow which are testament to our stronger production performance and improved cost management. Our focus continues to be on ensuring our operations are as safe and efficient as they can be and managing our cost base carefully, while retaining the ability to invest in our growth pipeline.” 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 third quarter and the first nine months of 2013 in a conference call on November 11, 2013 at 12.00 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 Q3 and 9 months 2013 Financial Results

To participate in the telephone conference, please dial:

Great Britain

44-20-3367-9453 (Local access)
0808-238-1775 (Toll free)

USA

1-866-907-5923

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:

Event login: 135284053
Event passcode: 160153