Financial and operating results for the second quarter and first half - PowerPoint PPT Presentation

Financial and operating results for the second quarter and first half ended June 30, 2012 August 30 th 2012

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Results at a Glance Nikolai Zelenski, CEO Financial Review Sergey Zinkovich, CFO Operational Review Nikolai Zelenski, CEO

Nikolai Zelenski Results at a Glance Chief Executive Officer

Financial Highlights » Revenues for H1 2012 were US$529 m (H1 2011: US$543 m), down 3%, mainly due to lower gold sales, but partially offset by higher realised gold prices » Total cash costs for H1 2012 were US$832 / oz (H1 2011: US$672 / oz), mainly due to higher costs at the Lefa, Taparko and Suzdal mines due to lower grades and recoveries » EBITDA was US$218 m, (H1 2011: US$268 m) » Cash flow from operating activity after interest and income taxes for the second quarter was at US$2.4 m, the result of a one-off payment of the accumulated interest on debt financing from Severstal, which was refinanced in March 2012, amounting to US$42.0 m » Excluding this one-off payment, operating cash flow for the second quarter amounted to US$44.4 m 5

Operational Highlights H1 2011- H1 2012 Production Bridge Key H1 2012 Production Results 400 » H1 2012 production at 321 koz, 14% lower than H1 2011 1 » (26) (10) (3) (3) Nordgold has taken a number of operational measures to (4) (6) 300 improve production at several mines, and positive dynamics at some of the mines has been achieved 200 321 » Record production at Berezitovy in June 2012, as a result of 372 operational improvements made, which is expected to continue 100 going forward 0 H1 2011 LEFA Taparko Suzdal Neryungri Aprel- Berezi- Buryat- H1 2012 kovo tovy zoloto Q2 2011- Q2 2012 Production Bridge Key Q2 2012 Production Results 250 » Q2 production at 165 koz gold equivalent ounces, 6% ahead of Q1 2012 and 17% lower than Q2 2011 200 » (9) Gold production increased at Lefa, Berezitovy, Neryungri and (5) (8) (0.2) (3) (4) (4) Aprelkovo over the previous quarter, while small production falls 150 at Taparko, Suzdal and Buryatzoloto 100 198 » Nordgold continues to make progress at resolving operational 165 issues across its asset portfolio and expects production growth 50 to continue in the second half of the year » 0 LTIFR for Q2 2012 slumped 51% to 1.03 from 2.11 in Q2 2011 Q2 2011 LEFA Taparko Suzdal Neryungri Aprel- Berezi- Buryat- Q2 2012 Safety continues to be a clear focus for the Board and kovo tovy zoloto management with the objective of Zero Harm for our employers and contractors. 6

Sergey Zinkovich Financial Review Chief Financial Officer

Key Financial Results Average Realized Gold Price (US$ /oz) » Growing gold demand from the developing +6% +13% economies and unstable macroeconomic 1 645 1 602 environment were the key drivers for the continued 1 513 1 461 gold price rally observed in H1 2012 Q2 2011 Q2 2012 H1 2011 H1 2012 » Average realized gold price was up 13% in H1 2012 Revenue (US$ m) versus H1 2011 reached US$1,645 / oz (3%) » H1 2012 revenue of US$529 m was down 3% from (12%) 543 529 H1 2011 (US$534 m) as a result of a decrease in 299 265 the quantity of gold sold by 50.5 koz, partly compensated by an increase in the average Q2 2011 Q2 2012 H1 2011 H1 2012 realised gold sales price Revenue Breakdown (US$ m) H1 2011 by geography H1 2012 by geography 100% = US$543 m 100% = US$529 m » In H1 2012, 57% of revenue originated from outside of Russia, with Africa as main contributor at 45%, Russia Russia Guinea Guinea 26% 29% compared to 48% in H1 2011 41% 43% 19% 19% 11% Burkina Faso 11% 12% Burkina Faso Kazakhstan Kazakhstan 8

Key Financial Results (continued) EBITDA (US$ m) » EBITDA for the period was US$217.7 m, down (19%) 19% from H1 2011, mainly as a result of both (22%) 268 218 lower production volumes at Lefa, Taparko, 133 104 Berezitovy and Neryungri, and by increased production costs at Lefa and Taparko Q2 2011 Q2 2012 H1 2011 H1 2012 EBITDA Margin (%) » H1 2012 EBITDA margin decreased by 8% 49% compared to H1 2011, to 41% 45% 41% 39% » Cash costs growth is mainly explained by the combined effect of lower volume and recovery, dramatized by the inflation factor Q2 2011 Q2 2012 H1 2011 H1 2012 Total Cash Cost (US$ /oz) +24% +20% 863 832 721 672 Q2 2011 Q2 2012 H1 2011 H1 2012 9

Key Financial Results (continued) Operating Cash Flow (US$ m) » Cash flow from operating activity decrease due to a one-off payment of the accumulated interest on debt financing from Severstal, which was 174 44 94 22 refinanced in March 2012, amounting to US$42.0 2 Q2 2011 Q2 2012 H1 2011 H1 2012 m » Excluding this one-off payment, operating cash flow for the second quarter 2012 amounted to Capital Expenditures (US$ m) US$44.4 m +83% 109% 224 » The CAPEX programme for 2012 is on budget and 128 107 70 on schedule Q2 2011 Q2 2012 H1 2011 H1 2012 Other Capex Exploration 10

Key Financial Results (continued) Key Balance Sheet Statistics June 2012 Total Debt Structure US$ m Q2 2011 Q2 2012 Change Q1 2012 Q2 2012 Change Debt Structure Debt Structure Cash & Equivalents 298 51 (83%) 171 51 (70%) (by Lenders) (by Currency) Current Assets 772 719 (7%) 761 719 (6%) USD Notes and USD (SWAP) Total Assets 2,714 2,698 2,784 2,698 (1%) (3%) Other Bonds NOK (bond) 9% 8% 14% (bond) 11% Short-term Debt 358 60 (83%) 59 60 1% 3% Current Liabilities 561 280 (50%) 262 280 7% Long-term Debt 129 431 373 371 234% (1%) Bank Financing USD 78% Total Debt 487 432 (11%) 432 431 0% (loan)* 77% Equity att. to 1,495 1,519 2% 1,597 1,519 (5%) Shareholders Total Equity 1,742 1,780 1,871 1,780 2% (5%) Total = US$430.9 m Net Debt 189 380 101% 261 380 45% Debt Position Dynamics Comments 0.7x » The Q2 2012 Net Debt increased compared to 432 431 380 the Q1 2012 - remaining at the comfortable 0.5x level 261 Q1 2012 Q2 2012 Total Debt Net Debt Net Debt / LTM EBITDA * Loan is RUR-nominated, treated as USD as a result of FX and % hedge instrument using 11

Financial Highlights for Individual Mines Selected Financials by Segment (US$ m) Revenue Breakdown by Region (H1 2012) Q2 2012 Q2 2011 Change H1 2012 H1 2011 Change Kazakhstan 12% Revenue Buryatzoloto 49 51 102 94 -4% 9% Burkina Faso Taparko 47 51 -8% 101 103 -2% 19% Russia Suzdal 30 40 -25% 63 60 5% 43% Berezitovy 40 45 -11% 75 77 -3% Neryungri & 28 32 -13% 50 50 0% Aprelkovo Guinea LEFA 70 80 -13% 138 159 -13% 26% Total revenue 264 299 -12% 529 543 -3% EBITDA Breakdown by Region (H1 2012) EBITDA Guinea 14% Buryatzoloto 24 23 52 61 4% -15% Taparko 28 34 -18% 63 69 -9% Suzdal 9 17 -47% 21 24 -13% Russia 52% Berezitovy 22 25 -12% 41 41 0% Burkina Faso Neryungri & 11 11 0% 21 16 33% 29% Aprelkovo LEFA 15 27 -44% 31 67 -53% Unallocated -5 -4 -11 -10 n.a. n.a. costs (1) Kazakhstan 10% Total EBITDA 104 133 -22% 218 268 -19% Unallocated corporate costs -5% 39% 45% 41% 49% EBITDA margin (1) Unallocated corporate costs not attributable to a specific segment 12