Nordgold Enters into Agreements to Acquire Ronguen Gold Project from Canada’s Goldrush Resources Ltd.

Amsterdam, Netherlands, June 13, 2014. Nord Gold N.V. (“Nordgold” or the “Company”, LSE: NORD), an internationally diversified pure-play gold producer, is pleased to announce that it has entered into a Share Purchase Agreement (“SPA”) with Goldrush Resources Ltd. (TSX-V:GOD) (“Goldrush”) to acquire all shares of Goldrush’s 100% owned Burkina Faso subsidiary, Goldrush Burkina S.A.R.L. (“Goldrush Burkina”) for total proceeds of USD 4.25 million (the ‘Purchase Price”).

Goldrush Burkina is the 100% owner of the Ronguen Gold Project (the “Project”), a late stage exploration project located only 10 kilometers northwest of Nordgold’s operating Bissa mine and 100 kilometers north of Ouagadougou, the capital city of Burkina Faso.

The Project comprises the Tikare and Kongoussi 1 mineral permits. According to 2012 technical report performed by SRK consulting for Goldrush, it contains the total gold resources of 384 thousand ounces at 1.3g/t, including total Measured and Indicated mineral resources of 332 thousand ounces of gold at a grade of 1.22 g/t Au.

Goldrush has spent USD 7.9 million on project development with preparations for the feasibility study underway and Nordgold expects to finalise it in Q2 2015.

The favorable Project location close to Nordgold’s recently completed Bissa mine with good access to all Bissa’s production facilities, and similar properties of their ore bodies will enable Nordgold to process the ore from the Project at Bissa facilities, and therefore extend the Bissa minelife and benefit from low-cost gold production at this world-class facility.

Message from the CEO

As part of Nordgold’s strategy to achieve long term sustainable growth, we continue to look for specific projects that complement and enhance our existing reserves base. On that basis we are confident the Ronguen project will be a very complementary value-enhancing addition to our Bissa mine. The Ronguen project meets our investment criteria for satellite projects: it is closely located to existing production and logistics facilities, contains higher grade core within its resources of non-refractory ore and can therefore be efficiently processed at Nordgold’s existing Bissa mine. This is a project with real potential, in a country we know well and where we have a proven development track record – it is an excellent strategic fit. The successful implementation of the project will further extend Bissa’s low cost production life and generate further positive free-cash flow.

Nikolai Zelenski, Chief Executive Officer, Nordgold

Structure of the deal

The Purchase Price for the sale of Goldrush Burkina (the “Transaction”) is:

  • US$4,250,000, of which US$3,250,000 will be paid to Goldrush on Closing. The remaining $1,000,000 of the Purchase Price will be held by an escrow agent and released on July 1, 2015 and December 31, 2017 in accordance with the terms of an escrow agreement to be executed and delivered on Closing.
  • a 1% Net Smelter Returns Royalty payable in cash equal to 1% on all gold mined and sold from the Ronguen Project at a gold price over US$1,700 per ounce. The royalty may be repurchased at anytime for a cash consideration of US$1,000,000.

Prior to closing, Goldrush Burkina and Goldrush Resources must complete a reorganization (the “Reorganization”) in accordance with the terms and conditions of a master reorganization agreement entered into between Goldrush Burkina and Goldrush Resources, amongst others. The Reorganization will effect the transfer of certain assets and properties currently held by Goldrush Burkina, other than the Tikare and Kongoussi 1 permits (which host the Ronguen Project and which will continue to be held by Goldrush Burkina), to one or more wholly-owned subsidiaries or affiliates of Goldrush Resources, or any other third party as directed by Goldrush Resources.

The SPA contains customary provisions for transactions of a similar nature, including representations, warranties, and covenants of the parties. The SPA is also subject to regulatory approval (including the conditional approval of the TSX Venture Exchange), the approval of the shareholders of Goldrush Resources, and the execution of an agreement between High River Gold Mines Ltd. (“High River”) and Goldrush Resources to terminate High River’s back-in rights on the Salbo and Ouavousse permits pursuant to a strategic alliance agreement dated January 3, 2006.

Closing is anticipated to occur on or about August 8, 2014.

About Goldrush

Goldrush. (TSX-V: GOD) is a Canadian mineral exploration company, focused on gold exploration in Burkina Faso, West Africa.

About Nordgold

Nordgold (LSE: NORD) is a pure-play emerging-markets gold producer established in 2007. The Company has expanded rapidly through acquisitions and organic investment, achieving a rate of growth unmatched in the industry during that period. In 2013 Nordgold’s gold production was 924.4 koz, up from 717 Koz in 2012.

The company operates 9 active mines and has one development project, 5 advanced exploration projects and a diverse portfolio of early exploration projects and licenses in Russia, Kazakhstan, Burkina Faso, Guinea and French Guiana. Nordgold employs about 10,000 people.

Press release
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