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H1 2021 Financial and Operating Results

H1 2021 Financial and Operating Results

London, United Kingdom, 8 September 2021 -Nord Gold plc (“Nordgold” or the “Group”), the internationally diversified gold producer, announces financial and operating results for the six months ended 30 June 2021 and provides an update on its ESG performance

H1 2021 Highlights:

The Lost Time Injury Frequency Rate (LTIFR) was 0.07 at Nordgold mines in H1 2021. This represents a substantial improvement of 71% year-on-year (YoY). With great sadness, in spite of the improved LTIFR, Nordgold regrets to report an incident at the Irokinda underground mine in January 2021, which resulted in the death of one employee. This tragedy highlights the continued need to focus on our overall safety performance.
Refined gold production of 493.1 thousand ounces of gold equivalent (koz) in H1 2021 is marginally ahead of plan, albeit down 3% YoY due to planned production decreases at Gross, Suzdal, Taparko and Lefa mines, offset by strong production performances at the Bissa-Bouly, Taborny and Irokinda mines.
The Gross mine expansion project continues to progress on time and on budget. The 2-phase project will result in ore processing capacity increasing from the current level of 16 mtpa to 18 mtpa in 2021, and for the second stage, 26 mtpa in ealy 2024. Work on the feasibility study for the second stage of expansion to 26 mtpa is on schedule and expected to be completed by the end of 2021. The Gross mine is expected to achieve the 18 mtpa ore processing rate from Q3 2021. During August 2021, the Lefa team started mining operations at the new satellite Diguili deposit in the Republic of Guinea. The Diguili deposit, which is located approximately 35 km from the processing facility at the Lefa mine, was significantly expanded after a successful regional exploration programme.
Gold prices remain relatively resilient, albeit still volatile and below the recent highs of early June 2021 after bullish comments from the Fed on the post-COVID recovery outlook.
The Company delivered better than planned all-in sustaining costs (“AISC”) of US$1,049/oz for H1 2021, up just 2% on the same period last year due to higher costs at Gross, Suzdal, Bouly, Taparko mines, partially offset by substantial cost improvements YoY at Bissa and Taborny mines, mainly driven by head grade improvement as well as planned lower sustaining CAPEX at Berezitovy, Bissa and Taborny mines YoY.
Adjusted EBITDA increased by 6% YoY to US$458.9 million in H1 2021 driven by a more favourable gold price environment and Nordgold margin improvement initiatives.
Net profit increased by 9% YoY to US$237.1 million in H1 2021 mainly driven by top line growth.
Strong free cash flow generation of US$179.5 million in H1 2021, 2% above H1 2020, was driven by higher earnings which were partly offset by Net Working Capital changes and higher income tax paid YoY.
Nordgold’s financial position remains strong with net leverage close to zero at the end of Q2 2021.

“I am pleased to report solid financial and operating results for the first half. Group production was marginally lower against the same period last year, but exceeding plan, driven by a strong operating performance.
We continue to consolidate our leading position in the highly prospective Gross region in Russia. Our two-phase Gross mine expansion project is progressing rapidly, with Phase-1 on track to be completed this year, and Phase-2 in early 2024. Together these will add approximately 130 koz annual gold production by increasing ore processing capacity from the current level of 16 mtpa to 26 mtpa. The Tokko Project, adjacent to the Gross Mine, has the potential to become our third low-cost mine in the region. We expect to complete the project feasibility study this year, with construction beginning next year.
We remain committed to further improving our ESG performance. We announced our ambition to achieving net zero emissions by 2050 in the first half and are developing programmes in support of this commitment. We maintained our support for our local communities during the pandemic, not least through investment in PPE, education programmes and testing capacity. I look forward to presenting the results of the extensive biodiversity programme we are delivering in the Gross region later this year. This project will help foster greater engagement with local communities, and I believe will serve as a model for greater industry collaboration as to how we can do even more to protect the environments in which we operate. Through greater research we aim to enhance the biodiversity status of these areas.
With a well invested operating portfolio, low cost, low risk development pipeline, excellent free cash flow generation and a very strong balance, we look forward to the second half of the year with confidence. This confidence is highlighted by the returns we generate for our shareholders and confirmation of our new dividend policy. For the first half of the financial year the Board declared a dividend of US$200 million in line with our commitment to pay a minimum US$400 million dividend for the full year — a record for Nordgold.” Nikolai ZelenskiChief Executive Officer of Nordgold