Robustly Positioned for Cash Flow and Growth Oleg Pelevin, Head of - - PowerPoint PPT Presentation
Robustly Positioned for Cash Flow and Growth Oleg Pelevin, Head of - - PowerPoint PPT Presentation
Nordgold Robustly Positioned for Cash Flow and Growth Oleg Pelevin, Head of Strategy March 2014 Disclaimer Information contained in this presentation concerns Nord Gold N.V., a company organized and existing under the laws of Netherlands (the
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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 obtained from sources believed to be reliable but does not guarantee its accuracy
- r 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 operations, 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
- r 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 operates 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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2013 Key Highlights
Leading emerging markets gold producer with
- perations in Russia, Kazakhstan, Burkina Faso and
Guinea
Diversified asset portfolio: operating 9 producing
mines, 1 large-scale development project and 5 advanced exploration projects
Large JORC resource base, exceeding 34.7 Moz
gold-equivalent (1), and reserves at 12.6 Moz with life
- f approximately 13 years
World class board and management team, with a
commitment to high standards of corporate governance
Commitment to a solid dividend plan, as Nordgold
introduced the quarterly interim dividend payment with payout ratio at 30%
London Stock Exchange listed GDR (ticker: NORD)
with 14.6% free float
(1) Total resources (measured, indicated and inferred) including silver resources (2) Normalised EBITDA is presented / used, before year-end adjustments
Nordgold at a Glance
924koz Gold Production, FY13 TCC US$819/oz AISC US$1,062/oz TCC & AISC, 2013 US$421M(2) 33% EBITDA & Margin, 2013 15% Production CAGR 2012 – 2015e
Russia Kazakhstan Guinea Burkina Faso
34% 9% 18% 39%
2013 Revenue by Geography
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Operating Mines Developing Assets Exploration Areas
Nordgold: Diversified Asset Base
(1) Actual production in 2013
Suzdal 81 Koz Taparko 108 Koz Lefa 163 Koz Bissa 254 Koz Aprelkovo 33 Koz Neryungri 67 Koz Gross 220E+ Koz Berezitovy 120 Koz Buryatzoloto 99 Koz Montagne d’Or Exploration Assets
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34% 9% 18% 39% 200 400 600 800 1,000 2008 2009 2010 2011 2012 2013
193 koz (1) 534 koz (2) 589 koz (3) 754 koz (4) 717 koz (5) 924 koz (6)
(1) Taparko, Berezitovy and Buryatzoloto production included as of acquisition in November 2008 (2) Figures shown on a 100% consolidated basis. Includes 5.3 koz gold equivalent (“GE”) of silver production (3) Includes production from acquisition of LEFA (Guinea) as of August 2010 and 4.2 koz GE of silver production (4) Includes 7.1 koz GE of silver production (5) Includes 5.2 koz GE of silver production (6) Includes 6.9 koz GE of silver production
History of Operations and Development
2009 2008 2010 2011
Expands into West Africa acquiring High River Gold Optimisation and integration of assets Forms integrated business model Acquires Crew Gold – further expanding in West Africa and diversifying resource base Established operations in 4 countries Completed 4 acquisitions Next successful year substantial growth of production and resource base More than doubled the resource base to 22.7 Moz Reached c. 50% production
- utside Russia
Growth in reserves by more than 50% Consolidation of 100% of High River Gold A year of consolidation and start of Bissa construction
Peer-leading track record of dynamic growth
2012
Production in 2014 is expected to be in the range of 870 – 920 koz
Significant growth of gold production and management team strength
2013
Record gold production in 4Q 2013 Launch of world class Bissa mine Entered South America with Montagne d’Or project in French Guiana Guinea Russia Kazakhstan Burkina Faso
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Management Team with Broad International Expertise
A balanced management team with strong corporate and technical track record
Nikolai Zelenski Chief Executive Officer
Head of Strategy of Nordgold since its
formation in late 2007
Joined OAO Severstal in 2004 and
worked at Strategy of Severstal Mining division
Previously Consultant at American
Appraisal
Joined Nordgold in February 2013 Previously: Aureus Mining, (COO),
Ashanti Goldfields, IMC consulting
PhD in Mining Engineering CFO of Nordgold since its formation in
late 2007
At OAO Severstal since 2005 as Head
- f Taxes at Severstal Mining division
Previously at audit and consulting group
BDO Unicon, held various financial management positions in manufacturing industry
Martin White Technical Director Oleg Pelevin Head of Strategy
CEO of Nordgold since its formation in
late 2007
At OAO Severstal since 2004. Held the
position of Head of Strategy at Severstal Mining division
Previously at McKinsey & Company,
Mining Industry Practice
Sergey Zinkovich Chief Financial Officer
Joined Nordgold in August 2013 Over 10 years of experience in
- ptimising and managing multiple ore
processing plant
Previously: Vice-President and Head of
Metallurgy of Gold Fields International
Member of the Australian Institute of
Mining and Metallurgy and Canadian Institute of Metallurgists
Joined Nordgold in June 2013 and has
- ver 20 years of experience in the
mining industry
Previously COO of Alacer Gold and in
various roles at Gold Fields International
Member of the Australian Institute of
Mining and Metallurgy
Philip Engelbrecht Director of Metallurgy Louw Smith Chief Operating Officer
Hired in 2013
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Key Objectives 2013 Targets 2013 Achievements
Clear and Achievable Production Targets Improvements in Production Efficiency Focus on Financial Performance Continuation of Organic Growth
2013 Key Objectives and Achievements
♦ Production of 770-850koz in gold equivalent ounces ♦ 2013 production was 924koz ♦ Launch and Ramp up of Bissa: 2013 production target 100koz ♦ Turnaround of underperforming Lefa and Buryatzoloto mines ♦ Continue to implement Business System of Nordgold (BSN) efficiency program ♦ 2013 output at Bissa exceeded FY 2013 target, produced 254koz ♦ Sustainable improvement in head grade achieved at Lefa and Buryatzoloto. Lefa production was +29% h-o- h in H2. ♦ We estimate the overall effect of BSN in FY2013 at more than $80mln in efficiency gains ♦ Demonstrate revenue growth ♦ Improved EBITDA and operating cash flows ♦ Control cash costs ♦ Pay dividends to shareholders ♦ 2013 revenue increased by 6% YoY despite lower gold prices (-18% YoY) ♦ FY 2013 EBITDA margin at 33% and OCF of $311m ♦ FY 2013 TCC at $819/oz, AISC down by 10% YoY to US$1,062/oz ♦ Q4 2013 interim dividends of USc1.43/GDR, total FY 2013 dividends of USc7.86/GDR was paid. ♦ Replenish mined out reserves and increase resources through exploration ♦ First gold at Gross ♦ Identification of new mine candidates ♦ Reserve update published in April 2013 with reserves and resources growth by 12% ♦ Gross remains our main development project and
- n track first gold in H1 2014 in trial project
♦ Advancement of exploration pipeline. Addition of Montagne d’Or project to our portfolio
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Bissa Success – Launch of a World Class Mine
Brief Overview Key Milestones Achieved Mine outlook
Location Country Burkina Faso Location 100km north from Ouagadougou Infrastructure Easy access to the national highway Operational statistics Mine type Open pit Technology Crushing, milling, CIL circuits Start-up January 2013 Plant Capacity 3.5 Mtpa FY 2013 production 254 koz Proven & probable reserves 1,863 koz at 1.74 g/t(1)(3) M + I + I resources 5,066 koz at 1.13 g/t(1)(3) FY 2013 total cash costs US$467/oz
(1) Based on WAI/CPR (2) Nordgold data (3) Management estimates (4) Based on LT gold price USD1,500/oz (5) 2013 expected costs based on CPR.
One of the most efficiently constructed project in the industry, capital intensity is only US$1,000 of capex per oz
- f gold produced
Industrial production reached on the first month of operation
Current Life-of Mine - 10 years
Significant reserve upside through resource conversion, extension of flanks and addition of satellite deposits
In-fill drilling indicates upside in reserve grade and tons. 2013 geological model positive reconciliation has been at above 40% Jun 2010 Jul 2011 Sep 2011 Jan 2013 2013
Feasibility study completed Mining lease
- btained
Construction started First gold poured; construction took 15 months Mine operates at full capacity; 2013 gold
- utput was 254.3 koz.
Total design and construction capex – $250 million
Bissa mine
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Nordgold: Further Growth Potential From Exploration
(1) JV with former shareholders of High River Gold (50/50)
Development projects Advanced exploration projects Early exploration projects
Delineated resource Feasibility underway or completed Trial production expected in H1 2014 at Gross Significant drilling performed Scoping underway Potential resource identified Target delineation
Uryakh
Russia
Prognoz(1)
Russia
Kaya
Burkina Faso
Zinigma
Burkina Faso
Tanzaka
Burkina Faso
Vitimkan
Russia
Gross
Russia
13.3Moz resources 4.6Moz reserves
Nerchinsk
Russia
Yeou
Burkina Faso
Lefa Corridor
Guinea
Brownfield / Satellite Greenfield / Standalone
Production in 1-2 years Production in 3-5 years
Wayin
Burkina Faso
Production in 6-8 years
Nordgold pipeline is robust and balanced with early stage and advanced projects
Goengo
Burkina Faso
Montange d’Or
French Guiana
Bouly
Burkina Faso
Banora Corridor
Guinea
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Key Exploration Assets - Advanced
Gross – Brief Overview
Location Country Russia Location Yakutiya, 5 km away from Neryungri- Metallic deposit Infrastructure Access by an all-season road Project parameters Mine type Open pit Technology Heap Leach Trial production H1 2014 Mining rate 12 Mtpa Average production 220 koz In pit reserves 4.6 Moz at 0.73 g/t M + I + I resources 13.3 Moz at 0.56 g/t Feasibility study Approved by the Board in Q1 2014
Bouly – Brief Overview
Location Country Burkina-Faso Location 10km east from Bissa mine Infrastructure Bissa infrastructure is available to support Bouly Project parameters Mine type Open pit, low strip ratio Technology Heap leach Possible start-up year 2016-2017 Development stage Scoping study Resources 1 Moz at 0.75 g/t Indicated & Inferred Reserve potential 2-3 Moz at 0.75 g/t for open pit Scoping study 2014
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Key Exploration Assets - Greenfields
Prognoz Silver Project – Brief Overview
Location Country Russia Location Yakutia Infrastructure 300km winter road access Project parameters Ownership Nordgold - 50% Mine type Potentially underground Development stage Scoping study completed Resources 5,860 koz at 11.8 g/t Indicated & Inferred (50^50) in GE Reserve potential 5,000 koz
Uryakh – Brief Overview
Location Country Russia Location Irkutsk region, 60km away from BAM railway Infrastructure Will require construction of all-season road Project parameters Mine type Underground and/or Open pit are possible Development Stage Advanced exploration Possible start-up year 2018 Resources 946 koz at 1.61 g/t inferred (WAI 2012) Reserve potential 1.5 – 2.5 Moz Scoping study 2014 Feasibility study Will take 1-2 years
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Montagne d’Or - New High Quality Project
Montagne d’Or Project Overview
Location Country French Guiana Location 115km from port of St Laurent Infrastructure Airstrip; all-season road Ownership Nordgold has the right to earn 50,01% Project parameters Mine type Open pit Development Stage Advanced exploration In-fill drilling to convert Inferred resource into Indicated; will be done in Q4 2013 – Q3 2014 Resources 4.2 Moz at 2.2 g/t Inferred (Coffey Mining, Nov 2012) Reserve potential 2-4 Moz Scoping study Will be done in 2014 Bankable Feasibility study Will be completed in 2016
Montagne d’Or Gold Deposit
Project Highlights
Large high grade deposit in politically stable jurisdiction, geologically similar to West Africa
Mining optimization shows good potential for low to moderate strip ratio high grade open pit operation
Significant exploration upside at the flanks of the deposit, silver by- product is not yet taken into account
Mining concession valid till 2019, renewable for 25 years
Potential to connect to the EDF power grid
No settlements in the vicinity of the deposit, low risk of community relation issues
Deposit location and mine map
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Nordgold New Project Criteria
♦ Located in emerging market geographies ♦ With gold as the primary metal ♦ Non-refractory ores ♦ Processed by a familiar to Nordgold technology ♦ Capex minimised to put into production or to significantly increase
- utput
What We Look For in Brownfield Projects
♦ Located in emerging market geographies ♦ With gold as the primary metal ♦ Non-refractory ores ♦ Not less than 2 Moz of reserve potential with grade at above 2g/t , low to medium strip ratio ♦ Possible to generate annual production at above 150 koz
What We Look For in Greenfield Projects
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15.3x 12.2x 9.2x 7.5x 6.0x 3.8x Randgold Semafo Polymetal (5) ABG IAMGOLD Nordgold 1,282 924 910 835 670 208 Polymetal Nordgold Randgold IAMGOLD (1) ABG Semafo (2) 16 15 14 13 10 2 27 34 26 37 30 6 Randgold Polymetal ABG Nordgold IAMGOLD (1) Semafo Reserves Resources
Nordgold Leads its Peer Group Operationally, but is Undervalued by the Market
2013A Production (koz Au Eq.) 2013 All In Sustaining Cost (US$ / oz )
1,062 1,210 1,232 1,362 n/a n/a Nordgold Polymetal (3) IAMGOLD ABG Randgold Semafo
Reserves & Resources (Moz Au Eq.)
Source: Company information. Market data as of 24 February 2014 (1) Excludes Niobium (2) Includes 49.2 koz production from discontinued operations (3) H1 2013 AISC (4) EBITDA estimates as per latest available broker consensus (5) EV / 2013E EBITDA
EV / 2013A Production (US$ / oz) EV / Reserves (US$ / oz) EV / 2014E EBITDA (x) (4)
8,396 5,130 4,297 2,650 2,324 1,687 Randgold Semafo Polymetal ABG IAMGOLD Nordgold 467 447 359 192 129 121 Randgold Semafo Polymetal IAMGOLD ABG Nordgold
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Nordgold: Investment Proposition
High Quality, Internationally Diverse Portfolio of Assets
World Class Board and Management Team, with a Demonstrated Commitment to Best Corporate Governance Standards Large JORC Resource/Reserve Base with Strong Pipeline of Development Projects Proven Track Record of Operational Improvements, Organic Growth and Value Creation
♦
Improving efficiencies/output at producing assets
♦
Recently commissioned Bissa now operating at full capacity – a case study in mine development
♦
Gross project on track to produce first gold in H1 2014 Commitment to Delivering Dividends to Shareholders Strong Free Cash Flow Generation and Focus on Delivering Competitive Cash Costs
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Contact
Nordgold Investor Relations
Valentina Bogomolova Head of IR Luna ArenA, Herikerbergweg 238 1101 CM Amsterdam Zuidoost The Netherlands M +7 916 474 59 96 E va.bogomolova@nordgold.com W www.nordgold.com