Nordgold Reports Q1 2011 Financial Results

Nordgold, an established pure-play gold producer focussed on emerging markets and a wholly-owned subsidiary of OAO Severstal, announces results for the three months ended 31 March 2011 (“Q1 2011”). Nord Gold N.V. (“Nordgold”) reports 2011 first quarter results.

Q1 Highlights

• Production increased by 59% to 174,193 gold equivalent ounces (Q1 2010: 109,241 ounces; Q4 2010: 194,140 ounces) Sales were 173,930 gold equivalent ounces, an increase of 42% over the same period last year and 10% decrease over Q4 2010 (1Q 2010: 122,638 ounces; 4Q 2010: 194,256 ounces)
• Revenue increased 80% to US$244.0 million and decreased 9% compared to Q4 2010 (Q1 2010: US$ 135.3 million; 4Q 2010: US$ 268.8 million)
• Average realized gold price increased 27% to US$1,403 per ounce sold and 1% over Q4 2010 (Q1 2010: US$1,101 per ounce; 4Q 2010: US$1,385 per ounce)
• Total cash cost per ounce of gold was US$603 (Q1 2010: US$487 per ounce; Q4 2010: US$633)EBITDA increased by 105% to US$ 135.1 million and 1% over Q4 2010 (Q1 2010: US$ 66.5 million; 4Q 2010: US$ 133.4 million)
• EBITDA margin was 55% (Q1 2010: 50%, Q4 2010: 49%)
• Capex increased by 74% to US$ 38.9 million and decreased by 35% compared to Q4 2010 (Q1 2010: US$ 22.3 million; 4Q 2010: US$ 56.7 million)
• Cash flow from operating activity increased 383% to US$ 78.7 million and decreased 25% compared to Q4 2010 (Q1 2010: US$ 16.3 million; 4Q 2010: US$105 million)
• Lost Time Injury Frequency Rate (LTIFR) in the first quarter 2011 was 1.98, a decrease of 42% over the same period last year and 44% versus 4Q 2010 (Q1 2010: 3.42; Q4 2010: 3.53)

Summary of financial and operating results

“We are delighted to announce that the construction of the Bissa Gold Mine is now complete. Bissa is a key development project for our company and central to our growth strategy, but more importantly it is a crucial producing asset for the people of Burkina Faso. We have made real efforts to cultivate a good relationship with the citizens of our host country, on both a local and a national level, and I would like to thank the Government of Burkina Faso for their support as we have developed this significant mine. As we move Bissa to full capacity, we will also focus our attention on delivering the Gross development project. Together with the ramp up of Bissa, Nordgold is very well placed to increase its global production considerably.” Nikolai ZelenskiCEO of Nordgold

Revenue from metal sales was US$244.0 million in the first quarter of 2011, versus US$ 135.3 million during the same period in 2010, an increase of 80% reflecting the significantly increased production and stronger average realized gold price of US$ 1,403 per ounce, 27% higher than in the comparable period in 2010.

Cash flow from operating activity was US$78.7 million in the first quarter of 2011, versus US$16.3 million during the same period in 2010, an increase of 383%, mainly due to the acquisition of Crew Gold Corporation and operational improvements at Taparko.

Capital expenditure was US$38.9 million for first quarter of 2011, compared with US$22.3 million for the same period last year. Exploration expenses for the first quarter of 2011 were US$17.1 million, an increase of 109% versus the same period in 2010, as Nordgold aims to at improve its reserve and resource base.

Total cash cost per ounce of gold (“TCC”) increased by 24% to US$603, compared with US$487 in 1Q of 2010 due predominantly to the consolidation of the Lefa mine which is currently operating above average TCC. TCC was also affected by changed grade at some mines, appreciation of local currencies and inflationary adjustments of salaries. However, 1Q 2011 TCC decreased by 5% versus 4Q 2010, due initial effects of turnaround at Lefa and Berezitovy production ramp up.

Outlook

As stated in the guidance, Nordgold expects to produce 800,000 — 840,000 gold equivalent ounces in 2011.

To advance the development, optimization and exploration projects already approved by the Board and its parent company, OAO “Severstal”, Nordgold has increased its capital expenditure estimate for 2011 by US$50 million to US$304 million, with the extra US$50 million dollars going into the exploration and evaluation budget, increasing it to US$129 million.

Enquiries

A conference call for investors and analysts hosted by Nikolai Zelenski, Chief Executive Officer, and Sergey Zinkovich, Chief Financial Officer, will be held today at 9.00am (London) / 12.00pm (Moscow). The press release and presentation will be published on Nordgold’s website www.nordgold.com at 7.00am (London) 10.00am (Moscow).

Participant dial in: +7 495 705 9451 (Russia)
Participant dial in: +44 (0)20 7784 1036 (UK))
Conference ID: 1954969

Nordgold
+31 20 406 4480

Corporate communications and IR
Dmitriy Gudovskiy
+7 917 578 8195

Sergei Loktionov, Media Relations
+7 916 800 1409

Financial Dynamics
Ben Brewerton / Chris Welsh
+44 20 7831 3113

Oleg Leonov / Maria Shiryaevskaya — Moscow
+7 495 795 0623