Nordgold: High Growth Emerging Market Leader in Gold March 2013 1 - - PowerPoint PPT Presentation

Nordgold: High Growth Emerging Market Leader in Gold

March 2013

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Disclaimer

Information contained in this presentation concerns Nord Gold N.V., a company organized and existing under the laws of Netherlands (the “Company”, and together with its subsidiaries, the “Group”), and is for general information purposes only. The opinions presented herein are based on general information gathered at the time of writing and are subject to change without notice. The Company relies on information

• btained from sources believed to be reliable but does not guarantee its accuracy or completeness.

These materials may contain forward-looking statements regarding future events or the future financial performance of the Group. One can identify forward looking statements by terms such as “expect”, “believe”, “estimate”, “anticipate”, “intend”, “will”, “could”, “may”, or “might”, the negative of such terms or other similar expressions. These forward-looking statements include matters that are not historical facts and statements regarding the Group’s intentions, beliefs or current expectations concerning, among other things, the Company’s results of

• perations, financial condition, liquidity, prospects, growth, strategies, and the industry in which the Group operates. By their nature, forward-

looking statements involve risks and uncertainties, because they relate to events and depend on circumstances that may or may not occur in the future. The Company cautions you that forward-looking statements are not guarantees of future performance and that the Groups’ actual results of operations, financial condition, liquidity, prospects, growth, strategies and the development of the industry in which the Group

• perates may differ materially from those described in or suggested by the forward-looking statements contained in these materials. In addition,

even if the Group’s results of operations, financial condition, liquidity, prospects, growth, strategies and the development of the industry in which the Group operates are consistent with the forward-looking statements contained in these materials, those results or developments may not be indicative of results or developments in future periods. The Company does not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in forward-looking statements of the Company, including, among others, general economic conditions, the competitive environment, risks associated with operating in the states where the Group operates, changes in the world [gold] market, as well as many other risks specifically related to the Group and its operations. No reliance may be placed for any purposes whatsoever on the information contained in this presentation or on its completeness, accuracy or fairness. The information in this presentation is subject to verification, completion and change. Accordingly, no representation or warranty, express or implied, is made or given by or on behalf of the Company or any of its shareholders, directors, officers or employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in these materials. None of the Company nor any of its shareholders, directors, officers or any other person accepts any liability whatsoever for any loss howsoever arising from any use of the contents of this presentation or otherwise arising in connection therewith. The presentation and the information contained herein does not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States. The securities of the Company have not been, and will not be, registered under the US Securities Act of 1933, as amended (the “Securities Act”). Accordingly, the securities of the Company may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Company does not intend to conduct a public offering of any securities in the United States

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Presenters Today

Sergei Zinkovich

Chief Financial Officer

Nikolai Zelenski

Chief Executive Officer

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Summary

» Gold production for the twelve months ended

December 31, 2012 was 716.9 thousand gold equivalent ounces (“Koz”), a decrease of 5% from FY 2011 (754.5 Koz)

» Revenue for the twelve months ended December

31, 2012 increased by 1% to US$1,197.9 million, compared to US$1,182.1 million in 2011

» EBITDA of US$ 493.0 million, a decrease of 14%

from FY 2011 (US$574.5 million)

» Cash flow from operating activities after interest

and income tax paid was US$121.6 million, a 69% decrease from FY 2011 (US$397.6 million)

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FY 2012

» Q4 2012 gold production of 201.9 Koz, a 4%

increase from Q3 2012 (194.0 Koz) and a 1% decrease from Q4 2011 (203.8 Koz)

» Revenue for Q4 2012 increased by 8% to US$346.8

million from Q3 2012 (US$322.5 million), a decrease of 10% as compared with Q4 2011 (US$385.3)

» Q4 2012 EBITDA of US$ 143.8, an increase of 9%

from Q3 2012 (US$131.5 million), and a decrease

• f 26% from Q4 2011 (US$ 194.7 million)

» Cash flow from operating activities after interest

and income tax paid was US$50,6 million, a decrease of 26% from Q3 2012 (US$68.6 million), and a decrease of 73% from Q4 2011 (US$184.2 million)

Q4 2012

US$ m (1) Q4 2012 Q4 2011 Change Q3 2012 Change FY 2012 FY 2011 Change, % Financial Results Revenue 346.8 385.3 (10%) 322.5 8% 1,197.9 1,182.1 1% Cost of sales 287.5 213.1 35% 220.0 31% 849.6 672.6 26% EBITDA 143.8 194.7 (26%) 131.5 9% 493.0 574.3 (14%) EBITDA margin 41.5% 50.5% (9pp) 40.8% 0.7pp 41.2% 48.6% (7.4pp) Operating cash flow 50.6 184.2 (73%) 68.6 (26%) 121.6 397.6 (69%) Capital expenditure 131.6 120.7 9% 118.5 11% 474.4 318.6 49% Operational Results Gold production (Koz) 201.9 203.8 (1%) 194.0 4% 716.9 754.5 (5%) Gold sold (Koz) 202.7 233.3 (13%) 193.2 5% 717.3 754.5 (5%)

• Avg. realised gold price

(US$/oz) 1,711 1,651 4% 1,670 2% 1,670 1,567 7% Total cash cost (US$/oz) 844 718 18% 837 1% 836 688 22%

Financial and Operating Results

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(1) Unless otherwise stated

• Gold production in Q4 2012 increased at Lefa, Taparko, and

Berezitovy over Q3 2012, while production fell at Buryatzoloto, Suzdal, Neryungri and Aprelkovo over the same period

• We continue to make progress in resolving operational issues

across most of our mines with robust production and clearly visible potential in 2013 at Lefa, Suzdal, Berezitovy and both Russian heap leach operations – Neryungri and Aprelkovo 2012 Quarterly Production (Koz) 2012 Quarterly EBITDA (US$ m) Key Q4 2012 Operating Results Key Q4 2012 Financial Results

• Up 9% (US$12.3 million) from Q3 2012. EBITDA was

positively impacted by higher production and cost control measures at certain mines. EBITDA margin for Q4 2012 was 41.5%

• Positive trend for EBITDA growth with the expectation of flat

cost inflation and recovery in the gold prices in 2013

Financial and Operating Dynamics

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156 165 194 202 50 100 150 200 250 Q1 2012 Q2 2012 Q3 2012 Q4 2012

29%

114 104 132 144 20 40 60 80 100 120 140 160 Q1 2012 Q2 2012 Q3 2012 Q4 2012

27%

(1) Unallocated corporate costs not attributable to a specific segment

Selected Financials by Segment (US$ m) Revenue Breakdown by Region (FY 2012) EBITDA Breakdown by Region (FY 2012)

Unallocated corporate costs -6%

Revenue FY2012 FY 2011 Change Q4 2012 Q4 2011 Change Lefa 287 304 (6%) 82 82 0% Taparko 212 205 3% 61 45 36% Suzdal 153 130 18% 43 50 (14%) Neryungri 111 118 (6%) 40 47 (15%) Aprelkovo 60 49 22% 20 18 11% Berezitovy 194 166 17% 63 65 (3%) Buryatzoloto 181 210 (14%) 38 79 (52%) Total revenue 1,198 1,182 1.3% 347 385 (10%) EBITDA FY2012 FY 2011 Change Q4 2012 Q4 2011 Change Lefa 75 108 (31%) 27 27 0% Taparko 124 137 (9%) 35 29 21% Suzdal 54 56 (4%) 17 23 (26%) Neryungri 53 60 (12%) 20 29 (31%) Aprelkovo 24 24 0% 8 10 (20%) Berezitovy 114 96 19% 39 41 (5%) Buryatzoloto 81 128 (37%) 12 46 (74%) Other 32 35 (9%) (14) (10) 40% Total EBITDA 493 574 (14%) 144 195 (26%)

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Financial Highlights for Individual Mines

24% 18% 13% 45% Guinea Burkina Faso Kazakhstan Russia

15% 25% 11% 55% Guinea Burkina Faso Kazakhstan Russia

• EBITDA for Q4 2012 amounted to US$143.8 million

and was higher than in the previous quarter (Q3 2012: US$131.5 million), but lower than Q4 2011 (US$194.7 million) as a significant portion of gold sold in Q4 2011 was a carryover from Q3 2011 production

• EBITDA for 12 months ended December 2012

amounted to US$493.0 million and was lower than 2011 by US$81.3 million (2011: US$574.3 million). This decrease was due to lower level of gold sales and higher TCC, partly offset by higher average gold price.

Q3 2012 - Q4 2012 EBITDA dynamics (US$ m) FY 2012 - FY 2012 EBITDA dynamics (US$ m) Highlights:

131.5 7.7 8.4 9.2 (4.8) (8.3) 143.8 20 40 60 80 100 120 140 160 180

EBITDA Q3 2012 Sales volume Sales prices COS prices G&A Other EBITDA Q4 2012

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EBITDA and Costs (Ebitda dynamics)

574.3 (29.6) 73.6 (128.9) (34.1) 37.7 493.0 100 200 300 400 500 600 700

EBITDA FY 2011 Sales volume Sales price COS price G&A Other EBITDA FY 2012

837 17 2 17 22 844 (3) (37) (8) (2) (1)

100 200 300 400 500 600 700 800

TCC Q3 Volume Grade Recovery PCC-cons PCC infl Mining tax G&A Forex Other TCC Q4

EBITDA and Costs (Costs dynamics)

Q3 2012- Q4 2012 Cash cost dynamics (US$ m)

• Total cash costs for 2012 amounted to US$836 per
• unce, which was 22% higher than in FY 2011. This

increase was due lower production level resulting in increased fixed cost per ounce, higher stripping ratios, together with inflation and the increased usage of spare parts and other consumables at certain mines.

• TCC for Q4 2012 were in line with the previous quarter

showing a marginal increase of 1% from US$837 to US$844 per ounce. The increase was a result of a

• perating cost inflation and negative forex effect

during the period.

Highlights:

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Quarterly cash cost breakdown by elements (US$ m) FY 2011- FY 2012 Cash cost dynamics (US$ m)

688 30 3 80 51 7 2 29 836 (17) (37)

100 200 300 400 500 600 700 800 900

TCC FY 2011 Volume Grade Recovery PCC cons PCC - Inflation Mining tax G&A Forex Other TCC FY 2012

US$145m US$123m US$142m US$161m US$169m

30% 39% 32% 28% 30% 20% 32% 25% 22% 24% 1% 2% 5% 2% 19% 20% 26% 24% 24% 19% 15% 12% 12% 13% 13% 12% 12% 14% 12% 11% 5% 5% 8% 6%

• 2%
• 28%
• 20%
• 8%
• 16%

Q4 2011 1Q 2012 Q2 2012 Q3 2012 Q4 2012 Personnel costs Fuel and energy Other expenses Materials Mining tax Spare parts External services Change in inventories

477 591 611 655 672 780 871 100 200 300 400 500 600 700 800 900 1000 100 200 300 400 500 600 700

Nordgold Cash Cost Curve (FY 2011) Nordgold Cash Cost Curve (FY 2012)

Production, koz Taparko Suzdal Buryatzoloto Neryungri Aprelkovo Berezitovy LEFA Total Cash Costs, US$ /oz

Nordgold TCC: US$ 688 oz 611 626 767 803 813 865 1 183 200 400 600 800 1 000 1 200 1 400 50 100 150 200 250 300 350 400 450 500 550 600 650 700

Production, koz Taparko Suzdal Buryatzoloto Neryungri Aprelkovo Berezitovy LEFA Total Cash Costs, US$ /oz

Nordgold TCC: US$ 836 / oz 577 593 756 839 884 1001 1 196 200 400 600 800 1 000 1 200 1 400 50 100 150 200

Production, koz Berezitovy Suzdal Taparko Neryungri Aprelkovo Buryatzoloto LEFA Total Cash Costs, US$ /oz

Nordgold TCC: US$ 844 oz

Nordgold Cash Cost Curve (Q3 2012) Nordgold Cash Cost Curve (Q4 2012)

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Nordgold TCC by Mine – Focus on Reducing Cost Pressures

595 715 720 730 783 884 1 269 200 400 600 800 1 000 1 200 1 400 50 100 150

Production, koz Berezitovy Suzdal Taparko Neryungri Aprelkovo Buryatzoloto LEFA Total Cash Costs, US$ /oz

Nordgold TCC: US$ 837 oz

Quarterly CAPEX breakdown (US$ m) FY 2012 CAPEX segmental breakdown (US$ m)

• Capex during the year was US$ 474.4

million. This was focused

• n

Bissa construction (US$ 205.1 million), further development of the Gross project (US$ 29.8 million), exploration works (US$ 120.3 million) and maintenance and expansion spending during the year.

• Our exploration program during the last

quarters and looking forward in 2013 aims to increase head grades and transfer additional gold from resources into reserves across almost all our mines

• In 2013, we expect Capex to be in the region
• f just around $300 million including

exploration (below $100 million).This will be focused on the development of the Gross project, exploration, maintenance & debottlenecking.

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Capital Expenditures

*Presented in accordance to Q4 2012 classification * without capex for exploration & evaluation works, included to Neryungri figure

7 9 12 16 18 20 35 208 30 120 474 100 200 300 400 500

Aprelkovo Berezitovy Suzdal Buryatzoloto Neruyngri Taparko Lefa Bissa Gross Exploration Nordgold

44.2 56.3 63.6 70.7 29.3 35.7 31.3 24.0 17.2 26.3 16.4 27.0 5.9 9.4 7.2 9.8 20 40 60 80 100 120 140 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Development Maintenance Exploration New projects

US$ 96.5m US$ 127.8m US$ 118.5m US$ 131.6m

Current cash position dynamics (US$ m) Key Points: Operating cash flow dynamics (US$ m)

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Cash Flow and Net Working Capital

217.1

• 466.8

173.1 45.0 121.6 (200) (100) 100 200 300 400 Dec 2011 Cash & Eq. Operating CF Investing CF Financing CF

• incl. FX effect
• n Cash & CE

Dec 2012 Cash & Eq.

• Liquidity position of US$45 million in cash and cash

equivalents

• Increase in Q4 2012 net debt by 62% to US$683.6

million, compared to US$420.8 million in Q3 2012

• Cash flow from operating activities after interest and

income tax paid was US$121.6 million, a 69.4% decrease from FY 2011 (US$397.6 million); in Q4 2012, cash flow from operating activities was US$50.6 million, a decrease of 26% from Q3 2012 (US$68.6 million), and a decrease of 73% from Q4 2011 (US$184.2 million).

68,6 12,3 46.9 (44.2) (33.0) 50.6 20 40 60 80 100 120 140 Q3 OCF EBITDA NWC change Interest & tax paid change Other Q4 OCF 143,8 3,7 (63.9) (33.0) 50,6 20 40 60 80 100 120 140 160 EBITDA Q4 2012 Non-cash & adj NWC change Interest & tax paid change OCF Q4 2012

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Summary and 2013 Outlook

» We took a number of operational measures during 2012 to improve production at all of our mines and finished the year in a strong

position

» Bissa was commissioned, ahead of schedule, in January 2013 » Successfully acquired the majority of minority High River Gold shares under our public offer in December 2012, and will be able to

increase our ownership in High River Gold to 100%

» The Board of Directors of Nordgold, has proposed to pay a dividend to the shareholders for the first time since the company’s inception » Have seen a strong start to 2013 and we anticipate 2013 full year production to be in the range of 770 to 850 Koz » The main focus for the management this year will be a cost control measures that should be transformed in a flat year over year TCC

dynamic

» As we have been communicating since the start of our turnaround project at Lefa, we can see a great potential at the mine which should

start to crystalize in 2013

» The Gross project remains on time and on budget with further improvements in project KPI’s expected to be announced in H2 2013

Nordgold Investor Relations

Alexey Shchedrin Director of corporate communications and IR Luna ArenA, Herikerbergweg 238 1101 CM Amsterdam Zuidoost The Netherlands T +31 20 406 4480 F +31 20 406 4555 M +7 917 502 20 48 E alexey.shchedrin@nordgold.com W www.nordgold.com

Contact us

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