Location and Description of the Project

MONTAGNE D’OR

Project Background

The 4.8 million ounce of Mineral Resources Montagne d’Or gold deposit is located in north-west French Guiana, 180 kilometers west of the capital, Cayenne, and 80 kilometres south of the department capital, Saint-Laurent-du-Maroni. The Project's base camp can accommodate 65 people.

In mid-March 2017, Nordgold earned-in a 55.01% interest in the Montagne d’Or project by spending a minimum of US$30 million and completing a Bankable Feasibility Study by 13 March 2017.

Nordgold also holds ~9% of Columbus Gold Corp.(“Columbus Gold”, CGT: TSX-V), the Company's partner in the Montagne d’Or project. In October 2014, Mr. Oleg Pelevin, Director of Strategy and Corporate Development for Nordgold, was appointed to Columbus Gold’s board of directors.

Reserves and Resources

Montagne d’Or is located within the northern greenstone belt of the Guiana Shield in French Guiana. The mineral deposits of the Guiana Gold Belt are very similar to those in other greenstone terrains such as in West Africa. This will enable Nordgold to apply its deep knowledge of West African geology to the Project and other projects in the region. Columbus Gold, with its many years of operational experience in French Guiana and unique local knowledge will serve a strong partner in the advancement of the project.

The current model of gold mineralization is a high sulphidization, volcanogenic type. Significant portions are thought to have been emplaced as replacement style mineralization. Subsequently, the mineralization has been deformed and partly remobilised within structural controls. Gold mineralization is associated with primary sulphide minerals as replacements within pyrite and chalcopyrite.

Category Tonnes (M) Grade (Au g/t) Au (Moz)
RESERVES *
Proven and Probable 54.11 1.58 2.75
RESOURCES **
Measured and Indicated 85.1 1.41 3.85
Inferred 20.21.50.96
Total (M+I+I) 105.3 1.4 4.81


  • * Proven and Probable Reserves were estimated using a gold price of US$1,200/oz at varied cut-offs dependent on lithological rock types, economics and estimated metallurgical recovery. Felsic Tuffs have CoG of 0.617 g/t Au, Granodiorites have a CoG of 0.622 g/t Au, Mafics have a CoG of 0.665 g/t Au, Saprolite and Saprock have a CoG of 0.552 g/t Au.
  • ** Mineral Resources estimated within pit shell that is defined by an US$1,300/oz price and CoG of 0.4 g/t Au.


Bankable Feasibility Study Highlights

  • The NI 43-101 compliant Bankable Feasibility Study(“BFS”) for Montagne d’Or was finalised in March 2017.
  • The BFS demonstrated positive economic data for an open pit mine with conventional CIL processing technology and average annual production of 237 thousand ounces in the first 10 years at an average grade of 1.73 g/t with an average all-in sustaining costs (“AISC”) of US$749/oz.
  • Life of mine ("LOM") production of approximately 2.57 Moz of gold; 214 koz per year, over a 12-year mine life, using an average overall gold recovery of 93.8% that results in an average LOM AISC of US$779/oz.
  • After-tax Net Present Value ("NPV") is US$370 million (at a 5% discount rate) and after-tax IRR is 19% at a gold price of US$1,250 per ounce.
  • Total net initial capital costs (including pre-stripping and contingency, less surplus tax credit refunds) of US$361 million.
  • After-tax Payback Period of 4.1 years, and LOM sustaining capital costs of US$231 million. LOM contingency rate of 9.5% is included in the estimate.

Outlook

Nordgold and Columbus (“Partners”) believe the following improvements to the Project can be made:

  • Certain capital costs can be optimised, subject to sourcing improved budget quotations from suppliers.
  • Infill drilling has the potential to convert some of the Inferred ounces to higher resource classification. Partners are considering undertaking 4,300 meters (“m”) of infill drilling, at an estimated cost of US$1.5 million. The drilling is being assessed for commencement in Q2 2017 subject to obtaining the required drilling permits.
  • There is a potential to lower the CoG used for reserves if gold prices increase, and with optimisation of operating costs used in the CoG calculations. This has the potential to convert some additional Measured and Indicated Resources within the current designed pit into Proven and Probable Reserves.
  • Columbus is looking into opportunities to refine the pit designs which could have the potential to increase reserves.
  • On February 13, 2017, Columbus announced commencement of an exploration drilling programmes at Montagne d’Or. The programmes consists of 36 core holes, for a total of 5,520 m, designed as a first pass investigation of exploration targets on strike of, and in very close proximity of the currently defined reserves. Four targets will be tested: 1) four widely-spaced drill hole fences will test the west strike extent of the deposit up 1.25 kilometers west of the current resource; 2) the Gustave geochemical anomaly located 500 m east of the Montagne d’Or deposit where a historical drill hole intersected 3.5 m of 31.94 g/t; 3) potential mesothermal quartz-gold vein systems within 1,000 m north of the deposit; and, 4) one hole under the deposit to test the down-dip extent of the principal mineralized zones.

The Preliminary Environmental and Social Impact Assessment (ESIA) was completed in Q1 2015 and completion of the ESIA is expected in 2017.

CONTACTS

Anastasia Shatskaya

Acting Head of Media Relations
tel.+7 495 644 44 73 #707 6697

ROMAN MEZHUEV

RECRUITMENT MANAGER
tel.+7 495 644 44 73

OLEG BAZALEEV

HEAD OF SUSTAINABLE DEVELOPMENT PROJECTS
tel.+7 495 644 4473 #707 6746