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Nordgold Reports Q1 2015 Financial and Operating R...

Nordgold Reports Q1 2015 Financial and Operating Results

Amsterdam, Netherlands, May 18, 2015. Nord Gold N.V. (“Nordgold” or the “Company”, LSE: NORD), the internationally diversified low-cost gold producer, announces a 26% increase in gold output to 266.7 koz and a 83% increase in EBITDA to US$189.7 million in Q1 2015. All-in sustaining costs 1 ("AISC") decreased by 23% to US$680/oz.

Q1 2015 Highlights

Gold production up 26% year-on-year (“YoY”) to 266.7 koz.
EBITDA1 up 83% YoY to US$189.7 million. EBITDA margin at 53.4%.
First quartile cost performance: total cash costs1 (“TCC”) of US$539/oz and AISC of US$680/oz, down 23% quarter on quarter.
Operating cash flow of US$157.7 million and free cash flow1 of US$120.2 million.
The Board has declared a dividend of 6.40 US cents per share / GDR for Q1 2015, a total of US$24.2 million.
FY 2015 AISC guidance decreased to US$800/oz — US$850/oz.
On 27 April 2015, Nordgold hosted its first Investor Day in London in which the Company gave notice of its intention to seek a premium listing on the London Stock Exchange.

Operating Highlights

Gold production of 266.7 koz, up 26% YoY and up 12% quarter-on-quarter (“QoQ”).
Seven out of Nordgold’s nine mines achieved a year-on-year production increase, with double digit growth at Bissa, Lefa, Berezitovy and Neryungri, as well as an 8% increase at Buryatzoloto.
Q1 2015 refined gold production includes 28.5 koz of gold doré produced and unrefined at Bissa, Taparko, Berezitovy and Neryungri mines at the end of 2014, which was refined in Q1 2015.
Nordgold reiterates 2015 full year production guidance of 925 — 985 koz.

Financial Highlights

The average realised gold price in Q1 2015 was US$1,224 per oz, a decrease of 6% compared with Q1 2014 (US$1,299/oz) and an increase of 3% compared with Q4 2014 (US$1,184/oz).
Despite a lower gold price, revenue in Q1 2015 increased by 29% YoY to US$355.6 million. Revenue increased by 40% compared with US$254.3 million in Q4 2014 driven by higher refined gold production and sales, which included 24.5 koz of refined gold and 28.5 koz of gold doré, which were produced in the end of 2014 and sold in Q1 2015.
EBITDA in Q1 2015 almost doubled QoQ to US$189.7 million mainly driven by higher gold sales, average realised gold price and lower costs. EBITDA margin in Q1 2015 was 53.4% compared with 37.6% in Q4 2014.
Net profit for Q1 2015 was US$88.5 million compared with US$24.6 million in Q1 2014 and a net loss of US$7.6 million in Q4 2014.
Normalised net profit attributable to shareholders2 in Q1 2015 increased to US$80.7 million from US$19.3 million in Q1 2014 and US$16.9 million in Q4 2014.
In Q1 2015, eight mines achieved TCC improvement compared with Q4 2014. As a result, Nordgold’s consolidated TCC decreased by 12% QoQ to US$539/oz mainly driven by increased production, improved operational and consumption efficiency, as well as reduced general and administrative (“G&A”) expenses. The TCC reduction also related to the benefit from the depreciation of the local currencies of the countries, where Nordgold operates, against the US dollar. We continue to implement cost optimisation and operational improvement programmes at all our mines.
Nordgold’s consolidated AISC decreased by 23% YoY and QoQ to US$680/oz in Q1 2015 compared with US$881/oz in Q1 2014 and US$887/oz in Q4 2014. In Q1 2015, all Nordgold’s nine mines achieved AISC improvement QoQ. The most significant reductions were recorded at Lefa (down 31%), Bissa (down 24%), Buryatzoloto (down 20%), Berezitovy (down 15%) and Neryungri (down 18%).
Based on significant improvement in AISC in Q1 2015, Nordgold is revising its FY 2015 AISC guidance and now expects AISC to be in range of US$800/oz — US$850/oz (previous range was US$850 — US$900/oz).
In Q1 2015, Nordgold generated US$157.7 million of cash flow from operating activities (after interest and income tax paid), compared with US$49.8 million in Q1 2014 and US$57.1 million in Q4 2014.
Q1 2015, capex3 decreased by 32% QoQ to US$31.9 million.
In Q1 2015, the Company delivered US$120.2 million of free cash flow compared with free cash flow of US$19.4 million in Q4 2014 on the back of significantly higher operating cash flow and lower capex.
Cash and cash equivalents as at March 31, 2015 were US$421.4 million with net debt3 of US$528.8 million, compared with US$317.1 million cash and cash equivalents and net debt of US$627.3 million as at December 31, 2014.

(1) Normalised EBITDA, free cash flow, capex, total cash costs, all-in sustaining costs and net debt as defined in the section for “Non-IFRS Financial Measures.
(2) Normalised Net Profit attributable to shareholders adjusted for the non-current assets and inventories impairment or utilisation of impairment.
(3) For detailed definition, please see “Non-IFRS Financial Measures”.

“I am delighted to announce another outstanding financial performance during the quarter, in which production increases have been matched by further cost improvements across the entire portfolio of mines. These cost improvements have more than offset the decline in the gold price during the period and enabled us to deliver over US$120 million of free cash flow in the quarter and reduce our AISC guidance for the full year.

Nordgold has demonstrated a track record of operational delivery and commitment to shareholder value, which puts us in a strong position to achieve our target of a premium listing on the London Stock Exchange in due course.” Nikolai ZelenskiChief Executive Officer of Nordgold

Telephone Conference and Q&A Session

Nikolai Zelenski, Chief Executive Officer of Nordgold, Dmitry Guzeev, Chief Financial Officer and Louw Smith, Chief Operating Officer will present the Company’s financial results for Q1 2015 on a conference call to be held on May 18, 2015 at 2.00 pm London time (4.00 pm Moscow time). The presentation will be followed by a Q&A session. To participate in the telephone conference, please register in advance.