Nordgold Reports Q2 and H1 2013 Financial and Operating Results

Amsterdam, Netherlands, August 30, 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 second quarter and six months ended June 30, 2013.

Financial Highlights

• Revenues for Q2 2013 increased by 21% from Q2 2012 to US$320.3 million. This represents an 8% increase from Q1 2013 (US$296.8 million). Revenues in H1 2013 increased by 17% from H1 2012 to US$617.1 million. The increase was mainly due to higher production volumes and gold sales, but was partially offset by lower realised gold prices (down 10%).
• 2013 Capital expenditure (“Capex”) budget has been reduced to approximately US$260 million from US$300 million. The capex programme for 2013 is on budget and on schedule with US$129.7 million (including US$39.9 million for exploration) spent in H1 2013.
• Cash and cash equivalents as at June 30, 2013 were US$228.3 million with net debt at US$802 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 proceeds from debt finance (US$579.6 million) in H1 2013 were partly offset by the outflow for loan repayments (US$283.6 million), dividends (US$44 million) and the High River Gold Mines Ltd (“High River Gold”) minority buyout (US$33 million). Nordgold generated US$103.5 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 US$133.7 million.
• Total cash costs (“TCC”) for Q2 2013 were down 7% from Q1 2013 at US$846 per ounce (Q1 2013: US$911/oz). The decrease was mainly due to a significant increase in gold production with lower costs from our new mine Bissa, and also due to the first positive effects of our cost cutting programme. For H1 2013 TCC were US$875 per ounce, up from US$832 per ounce for H1 2012. We continue to implement cost optimisation programmes at all of our assets.
• EBITDA for H1 2013 was US$212.8 million, a 3% decrease on H1 2012 (US$218.7 million). EBITDA for Q2 2013 was flat on Q1 2013 and up 2% on Q2 2012. Despite lower gold prices in the reporting period, the Company managed to insulate EBITDA from a larger decrease mainly due to higher production and strict cost control. EBITDA margin for H1 2013 was 34.5%.
• Net loss for H1 2013 was US$174.9 million compared to net income of US$65.3 million in H1 2012. In accordance with the Company’s accounting policies we reviewed the carrying value of tangible and intangible assets including goodwill, exploration and evaluation assets, inventories and other operating assets accounted on the Company’s balance sheet. Consideration was given to a range of indicators including a decline in gold price and reduction in market capitalisation. This resulted in one-off non-cash write-offs of mineral rights, exploration assets and ore stockpiles of approximately US$217.9 million(3) relating to the impairment of tangible and intangible assets. The amount consists of a US$120.6 million(3) decrease in mineral rights relating to Lefa in Guinea, a US$44.7 million(3) decrease in mineral rights and PPE relating to Suzdal and Balazhal in Kazakhstan, a US$52.5 million(3) decrease in mineral rights and PPE relating to Aprelkovo in Transbaikal region of Russia. The Company also recognised US$18 million(3) of inventories write-off at Lefa, Taparko, Aprelkovo, Berezitovy, Suzdal, including Zherek and Balazhal. However, note that the Company’s mineral reserves continue to be estimated at a conservative price of US$1,250 per ounce.
• The Board of Directors of Nordgold approved an interim dividend of 4.05 US cents per share or per Global Depositary Receipt for the six months ended June 30, 2013.

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

Outlook and Growth Drivers

Nordgold is maintaining its 2013 full year production guidance of 770 to 850 koz. We expect production growth to be driven by a combination of factors including:

• An increasing contribution during the year from the new Bissa mine, which has already exceeded the initial full year production guidance for 2013 of up to 100 koz
• We expect to pour first gold from trial treatment of ore at Gross in the last quarter of 2013 and to produce up to 15 koz of gold this year
• We expect to drive additional growth from our existing asset base, including benefits from the considerable investment made at Lefa, which had suffered from a lack of investment prior to Nordgold’s ownership of the asset
• Management is focused on achieving increased efficiency at all its mine sites to reduce total cash costs and has reduced its 2013 capex budget by US$40 million

“Given the challenges we have seen in the sector over the past few months, this is a resilient set of results and I am pleased with the progress we have made over the period on our strategy. Notably we have seen a significant improvement in our production performance in particular at Bissa, which is already running at full capacity, with first half production exceeding our initial full year production guidance for 2013. Increased production has translated into a strong rise in revenue even against a headwind of the lower gold price. We continue to remain vigilant on costs by reducing our 2013 capex budget by US$40 million, though importantly we are still able to invest in our global operations. Although TCC is higher than we would like, we saw good progress in Q2 over Q1 2013, and I am confident the measures we have put in place to improve efficiency at our mines will have an impact in the second half and we can maintain the lower cost level we achieved in the second quarter. We will continue to implement our strategy in the second half. We will focus on driving performance at our existing assets, maximising the potential of Bissa and developing our Gross project, while remaining vigilant on costs.” 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 Q2 and H1 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:

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Event passcode: 352116