Nord Gold SE reports its Exploration and Mineral Resources and Ore Reserves update for the period ended 31 December 2017 in accordance with the 2012 JORC code
London, United Kingdom, 15 March 2018 — Nord Gold SE (Nordgold or the Company), the internationally diversified gold producer, announces a 7% rise in Mineral Resources to 33.6 million gold ounces (Moz) in 2017 and a 2% rise in Ore Reserves to 15.2 Moz.
- Total Mineral Resources (1) increased by 7% or 2.1 million ounces of gold (Moz) to 33.6 Moz mainly due to successful near-mine exploration. Measured and Indicated Resources increased by 3% or 815 thousand ounces (koz) to 25.6 Moz despite depletion of 1.2 Moz.
- Ore Reserves (2) increased by 2% or 348 koz to 15.2 Moz of gold in 2017, in addition to the 1.2 Moz replacement of mined out ore (3).
- In 2017, Gross construction progressed on schedule and within budget. Commissioning is planned to commence mid-2018 reaching full production by the end of the year.
- Environmental and Social Impact Assessment reports for the Montagne d’Or project in French Guiana have been provided by consultants in draft form in Q4 2017. The reports will be finalised following review by the company and input from the public debate in French Guiana, which will occur between March and June 2018.
- Nordgold is progressing with the Uryakh development project. The 2017 options study of mining and processing options indicated the viability of combined open pit and underground mining operations and CIL processing. In 2018, a prefeasibility study will be completed by SRK, along with geotechnical drilling and infill drilling of Mineral Resources.
Nordgold’s strong balance sheet and focus on consistent free cash flow generation enables us to invest in our globally diversified asset base across four continents and six countries, as well as in our exciting pipeline of high-quality development projects. A strong exploration programme is key to giving us the platform to drive continued organic growth. In 2017, we successfully replaced mined out ore and also increased our Mineral Resources as we look to further extend our overall life of mine performance.
I am also pleased to report on continued progress in our development pipeline. Following the significant achievements of Bouly and Bissa in Burkina Faso, which have both delivered ahead of expectations, construction of our new Gross mine in Russia is on track to produce first gold this year. We remain highly disciplined in our development priorities. All our projects are capital efficient and competitively positioned at the low end of the cost curve. We are confident in our ability to generate strong returns from this pipeline of new projects long into the future. Nikolai ZelenskiNordgold CEO
- 2017 exploration programmes focused on increasing and converting Mineral Resources at existing operating mines, and to replace and grow Ore Reserves.
- Nordgold invested US$35 million in exploration and evaluation in 2017, including US$17 million in sustaining exploration (near-mine Ore Reserves replacement) and US$18 million in greenfield exploration. Greenfield exploration was mainly concentrated on Russian exploration licenses near Irokinda, Berezitovy and Neryungri mines as well as the Uryakh project in Russia and the Pistol Bay project in Canada.
- Bissa and Bouly exploration conducted drilling programmes that expanded Mineral Resources and Ore Reserves at established pits and at satellite deposits. Nine new exploration permit applications have been lodged to increase the potential for expansion of Bissa Mineral Resources.
- Near-mine exploration at Taparko included drilling for potential underground Mineral Resources at the 35 pit that encountered significant intercepts including 7.2m at 6.69g/t and 11.0m at 8.56g/t. In 2017, Taparko commenced mining at the Goengo and Tangarse satellite deposits.
- Lefa exploration made new discoveries in 2017. These included the Bofeco DTM discovery, Gold Ring and Gold Ring Extension, Kankarta Far West, and extensions to the Toume-Toume pit. Infill drilling of the Banora East and West satellite deposits were completed, while drilling of the underground potential at Lero-Karta commenced.
- In an important step to expand production at Neryungri, authorities granted a license at Temniy, south of the Tabornoe pit, to allow exploitation of the deposit.
- A total of 4,205m of drilling was completed at Pistol Bay in 2017. The drilling concentrated on new targets on the large license area, including Howitzer. Glacial till samples were collected and analysed resulting in numerous gold-in-till anomalies that will guide future exploration.
2018 key exploration and development priorities
- Nordgold will continue to focus on near-mine and satellite deposits exploration at operating mines, with the aim of at least replacing mined out Ore Reserves annually, while progressing its growth pipeline.
- Gross project on track and under budget. It is expected that Gross will begin gold production in mid 2018 reaching commercial levels of production by the end of 2018.
- A contract has been signed with SRK Denver to complete a pre-feasibility study for Uryakh that is expected to be delivered by the end of 2018.
- After completion of the public debates for the Montagne d’Or project and adjustment of the Environmental and Social Impact Assessment reports Nordgold plans to apply for construction and mining authorisations in H2 2018.
- Nordgold’s strategy of organic growth remains the primary focus, the strength of its cash flow generation and balance sheet means that Nordgold is also able to review new opportunities continuously with a view to acquiring premium-quality Mineral Resources and Ore Reserves at competitive valuations to grow gold production.
- The Company also seeks growth through acquisitions and partnerships in high-value gold projects. Projects in mining-friendly jurisdictions with over 2 Moz of potential minable Mineral Resources, production of above 150 koz, modest development capital investment and short payback period fit the criteria for Nordgold’s growth strategy.
(1) Mineral Resources estimated within pit shells that are defined by an US$1,550/oz price (unchanged from 2016), costs and relevant modifying factors used for their estimates. Development projects Mineral Resources based on the gold price of US$1,550/oz for Gross (US$1,600/oz in 2016) and US$1,300/oz for Montagne d’Or (unchanged from 2016).
(2) Ore Reserves were estimated using a gold price of US$1,250/oz (US$1,200/oz in 2016), and operational costs for the first 9 months of 2017. Development projects Ore Reserves based on the gold price from respective Feasibility Studies: Gross — US$1,250/oz and Montagne d’Or — US$1,200/oz.
(3) Depletion based on Dore produced and average weighted recovery.