2020 Financial and Operating Results
London, United Kingdom, 19 March 2021 — Nord Gold UK Societas (“Nordgold” or the “Company”), the internationally diversified gold producer, announces its financial and operating results for the twelve months ended 31 December 2020.
- Lost Time Injury Frequency Rate (LTIFR) improved to 0.14 in 2020 with zero employee fatalities. We regret to confirm one contractor fatality at the Suzdal mine in June 2020. Since the period end, we are also deeply sad to report an incident at our underground Irokinda mine in January 2021 which resulted in one employee fatality.
- Refined gold production of 1,045.6 thousand ounces of gold equivalent (koz) was marginally up on 2019, despite the challenges presented by the unprecedented global pandemic. The strong production results were driven by the Gross, Taborny, Taparko, Irokinda and Berezitovy mines, more than offsetting lower production at other mines.
- Adjusted EBITDA increased by 52% year-on-year («YoY») to a record US$ 1,016.9 million in 2020, mainly driven by a more favourable gold price environment and a stable cash cost position that allowed us to capitalise on this environment.
- The COVID-19 pandemic has made gold’s relevance as a hedge more apparent thereby supporting its price performance, with the average realised gold price increasing by 27% YoY in 2020 driving revenue up.
- Net profit more than tripled as Nordgold capitalised on the strength of the gold price by keeping our cash cost stable, as well as due to other factors including a gain on the sale of the Cardinal Resources Limited shares owned by Nordgold to Shandong Gold, foreign exchange gains and lower than in 2019 impairment loss recorded in 2020.
- Free cash flow increased to a record US$ 551.9 million in 2020 mainly due to lower than in 2019 capital expenditures and higher operating cash flow with the Gross mine being the main contributor. This number does not include gains from sale of Cardinal Resources.
- Significant progress in the development of the world class Gross Mining District:
- Ongoing realisation of US$ 58 million Gross expansion project to increase mining capacity to 18 million tonnes of ore per year from Q3 2021;
- The capacity of Taborny mine increased from 5 million to 7.5 million tonnes of ore per year;
- Rapid development of Tokko project with positive Preliminary Economic Assessment confirming NPV of approximately US$ 653 million.
Our first priority in 2020 was protecting the health and well-being of our people in what has been a hugely challenging year given the impact of Covid-19. I would like to once again thank all my colleagues for the way they have adapted to the changes we have put in place during the pandemic.
It is testament to the strength of our people that we have reported a very strong year of production despite these challenges, ahead of the record result achieved last year. In particular, our Gross mine launched in 2018 has continued to outperform, while we have also delivered a very strong result at Taparko in Burkina Faso. This highlights the strength of our international portfolio, where our West African operations are complemented by the unique characteristics of our Russian portfolio, in particular the potential offered by our position in the highly prospective Gross District.
The Gross mine itself has considerable scope for further expansion, while we are progressing quickly with Tokko, another exciting high quality project. We are also making good progress on developing and delivering our ESG strategy. I look forward to progressing our plans to further diversify our Board, and am encouraged to see the continued progress in our WWF and Sustainalytics Ratings. We aim to maintain this momentum in 2021. Nikolai ZelenskiNordgold CEO
Head of Corporate Communications
Tel: +44 (0) 20 7250 1446
Nordgold is an internationally diversified one million ounce gold producer with about 7,800 people operating a portfolio of nine mines (in Burkina Faso, Guinea, Russia and Kazakhstan) and a number of development and exploration projects in West Africa, Eurasia and the Americas. Since its foundation in 2007, Nordgold has established a global reputation as a leading developer of tier one gold mining assets with a proven commitment to community engagement, sustainability, efficiency and operating in an environmentally responsible manner. Since 2013, Nordgold has successfully constructed three gold mines, including two in Burkina Faso (Bouly and Bissa) and most recently, the Gross mine in Russia.