Nord Gold N.V. reports its Exploration and Mineral Resources and Ore Reserves update for the period ended 31 December 2015 in accordance with the 2012 JORC code
Amsterdam, the Netherlands, April 14, 2016 - Nord Gold N.V, (“Nordgold” or the “Company”, LSE: NORD), the internationally diversified low-cost gold producer, announces 8% rise in Ore Reserves to 14.0 million gold ounces (“Moz”).
- On top of the 1.1 Moz replenishment of mined out (1) ore, there has also been an 8% or 1 Moz increase in our Ore Reserves (2) to 14.0 Moz of gold since 31 December 2014 due to the success of our 2015 exploration programmes.
- Significant Ore Reserves additions at Bissa, Lefa, Zun-Holba, Neryungri and Suzdal mines. Partial replenishment of mined out Ore Reserves took place at Berezitovy, Irokinda and Taparko mines. Maiden underground Ore Reserves of 107 koz of gold at 5.4 g/t were added to the Berezitovy mine total.
- Measured and Indicated Gold Resources increased by 1% or 252 thousand ounces (“koz”) to 22.0 Moz despite depletion of 1.1 Moz.
- Largest increase in Mineral Resources from Burkina Faso (up 7% or 514 koz to 8.1 Moz of gold) due to successful exploration and resource definition at the satellite deposits and near existing pits of the Bissa and Taparko mines. Substantial increase in Mineral Resources at Buryatzoloto’s Irokinda mine, as well as at Neryungri and Aprelkovo.
- Initial resources of 177 koz for two new satellite deposits - Kangarse and Goengo – were added to the Taparko mine total. Mineral Resources of 299 koz of new Yimiougou and Noungou deposits located near the Bissa mine were added to the Company total.
- Total Mineral Resources (3) decreased by 477 koz or 2% to 28.5 Moz (2014: 29.0 Moz) mainly due to a decrease of Mineral Resources at the Lefa and Berezitovy mines related to re-designed pit shells defined by a lower gold price (US$1,500/oz, which represents a decrease of US$100/oz compared to 2014).
- A large-scale revaluation of Mineral Resources (4) of Montagne d’Or gold deposit in French Guiana was made, which were largely converted from Inferred to Indicated. Montagne d'Or hosts 2.92 Moz of Indicated Gold Resources at 2.15 g/t and 0.88 Moz of Inferred Resources at 2.11 g/t. Montagne d’Or Mineral Resources will not be included in Nordgold’s total until the option to earn-in 55.01% is executed, which must occur by no later than March 2017.
- Maiden Inferred Resources (5) of 739 koz of gold at 2.95 g/t were estimated for the Pistol Bay deposit as at 31 March 2016. Nordgold holds a 51.5% stake in Northquest Ltd. (owner of the Pistol Bay project) and the attributable part of the project Mineral Resources will be included in Nordgold’s 2016 total.
- Nordgold’s strong balance sheet and consistent free cash flow generation, enables us to continue investing in our globally diversified asset base across four continents and six countries, as well as in our exciting pipeline of low-cost development projects, despite the weaker price environment.
- In 2015, the primary focus of our exploration programmes shifted from main growth projects, where the target of delivering substantial Ore Reserves was achieved by 2015, to Ore Reserve replacement and extension and conversion of Mineral Resources at the operating mines.
- In 2015, Nordgold invested US$31.0 million in exploration and evaluation, including US$21.0 million in sustaining exploration (in-mine and near-mine Ore Reserves conversion) and US$10.0 million in greenfield exploration.
- The 2015 exploration programmes successfully achieved the target of increasing Ore Reserves and largely maintaining Mineral Resources at 2014 levels replacing mined out ounces.
- Excellent economic results from the Feasibility Study for the Bouly project in Burkina Faso which was finalised in 2015 and maiden Ore Reserves of 1.32 Moz and Mineral Resources of 3.5 Moz have enabled Nordgold to start construction of the new Bouly mine in Q2 2015 with gold production expected to commence in the second half of 2016.
- Our low-cost Gross project in Russia was fully permitted in 2015 and de-risked by a successful two years trial, which confirmed the economic attractiveness of the project, even in a low gold price environment. It is now ready for construction, which will start shortly with production beginning up to two years later.
- An additional US$6.9 million was invested in exploration at the Montagne d’Or earn-in project and US$7.3 million at the Pistol Bay project in Canada. Both projects are advancing and growing.
- Finalised in 2015, the Preliminary Economic Assessment for the Montagne d’Or project in French Guiana demonstrated positive economic data and Nordgold is therefore looking forward to completing a feasibility study in Q4 2016 to de-risk the project and further improve its economics.
- Nordgold also finalised a feasibility study for three new projects in Burkina Faso in 2015: Yeou (Taparko mine satellite), Zinigma and Ronguen (Bissa mine satellites). Mining Licence applications for these projects were submitted in 2015. These projects will provide high-quality ores for the Bissa and Taparko processing facilities to extend their Life of Mine.
Nikolai Zelenski, Chief Executive Officer, Nordgold commented:
I am delighted to report on the strong results of our 2015 exploration programmes, a year in which we discovered or converted significantly more gold than was mined. I am particularly pleased with the results of the near mine exploration, which delivered all of the newly added reserve ounces thereby further increasing the Life-of-Mine of our low cost producing assets. In addition, we have made a great progress advancing our outstanding pipeline of greenfield projects, with Bouly and Gross moving in the construction phase. Looking ahead, our low cost performance and strong free cash flow generation enables us to commit to our 2016 exploration programmes, which we are confident will continue to expand our reserves and generate long term sustainable value to shareholders.
2016 key exploration and development priorities
- Nordgold will continue to focus on near mine and satellite deposit exploration at operating mines with the aim of replacing mined out Ore Reserves annually.
- We will continue to advance our exciting growth pipeline. The company will benefit in the near-medium term from three well defined low-cost growth projects – Bouly, Gross and Montagne d’Or - that require only modest development capex.
- While our strategy of organic growth remains our primary focus, our strong cashflow generation and balance sheet enables us to carefully review new opportunities to acquire premium-quality reserves and resources at competitive valuations to further enhance our reserve base.
- (1) Depletion based on Dore produced and average weighted recovery.
- (2) Ore Reserves were estimated using a gold price of US$1,200/oz, a US$50/oz reduction from the 2014 estimate of US$1,250/oz, and operational costs for the first 9 months of 2015. Development projects (Bouly and Gross) Ore Reserves based on the gold price from their Feasibility Study.
- (3) Mineral Resources estimated within pit shells that are defined by an US$1,500/oz price, costs and relevant modifying factors used for their estimates. Development projects (Bouly and Gross) Mineral Resources based on the gold price from their Feasibility Study.
- (4) Based on the current NI 43-101 in-pit gold resource estimates (using US$1,300/oz gold price) utilising a cut-off grade of 1.0 g/t.
- (5) Based on the NI 43-101 in-pit gold resource estimates (using US$1,500/oz gold price) utilising a cut-off grade of 1.25 g/t Au.