Chairman message
Philip Baum
While 2013 was a challenging year for the gold market, it was also the perfect opportunity for Nordgold to prove that we can deliver on our promise to achieve long-term growth and provide value for our shareholders.
CEO message
Nikolai Zelenski
As a young company, 2013 was an important year for us to demonstrate our unabated perseverance to responsibly grow our business and to deliver value to our stakeholders.
Key achievements
Launch of Bissa – A new world class mine in Burkina Faso
January 2013
A greenfield gold mine development completed on time, on budget and ramped up to nameplate capacity in record time. The construction of the Bissa mine took just 15 months and was built according to the most advanced engineering and safety industry standards. Total investment in the project was US$250 million. Bissa reached industrial scales of production within the first month of operation and full capacity after only 6 months. As a result, in 2013 Bissa had an outstanding performance, producing 254.3 koz at AISC US$540 per ounce and exceeding its projected capacity by 27%.
Consolidation of 100% of High River Gold
March 2013
In March 2013, Nordgold completed the acquisition of all of the outstanding common shares of High River Gold that it did not already own. Each holder of an HRG Share was entitled to elect to receive either CA$1.40 or 0.285 Nordgold global depositary receipts per HRG Share. The successful transaction resulted in an increase in Nordgold’s free float to 14.6% from under 10% prior to the deal. Completion of this transaction marked an important streamlining of Nordgold’s corporate structure; better positioning the Company as one of the leading emerging market gold producers.
Successful Placement of Eurobond
May 7, 2013
In May 2013, Nordgold raised US$500 million from the 5-year Guaranteed Notes issuance. The Notes bear interest at a rate of 6.375% per annum (payable semi-annually in arrears on May 7 and November 7), the first payment being made on November 7, 2013. The Eurobond matures on May 7, 2018. The Notes were started to trade on the Global Exchange Market of the Irish Stock Exchange on May 8, 2013. In April 2013, Fitch ratings and Moody’s Investors Service assigned ratings to Nordgold.
Nordgold Strengthens Senior Management Team
Summer 2013
In 2013, Nordgold has significantly strengthened its senior operational management team, making new hires with proven expertise: Louw Smith was appointed as Chief Operating Officer of Nordgold in July 2013, joining from Alacer Gold. Martin White was appointed as the Technical Director of the Company in September 2013, joining from Aureus Mining Inc. Philip Lodewyk Engelbrecht joined Nordgold as Director of Metallurgy in August 2013. Most recently, he was the Vice President and Head of Metallurgy at Gold Fields International, Australia.
Montagne D’Or Project
September 2013
In September 2013, Nordgold entered into a Binding Letter of Intent with Columbus Gold Corporation. Under the agreement, Nordgold is eligible for a 50.01% stake in the Montagne D'Or gold deposit in French Guiana by investing not less than US$30 million over 3 years in developing the project into a bankable feasibility study. In November 2013, a 14-month programme funded by Nordgold was commenced at the deposit. Participation in the 4.15 million ounce Montagne D’Or deposit is the implementation of Nordgold’s strategy to expand its portfolio through the development of high quality projects.
New Dividend Policy
November 2013
| Period | Dividend per GDR, US$ cents | Total amount, $US mln |
| Q4 2013 | 1.43 | 5.4 |
| Q3 2013 | 2.38 | 9.0 |
| H1 2013 | 4.05 | 15.3 |
Nordgold continues to remain focused on rewarding shareholders by returning cash from the company’s strong financial performance. In November 2013, the Board of Directors of Nordgold approved changes to the Company’s dividend policy. With the aim of delivering more frequent dividend payments to its shareholders, Nordgold has introduced payment of an interim quarterly dividend. The targeted payout ratio was set at 30% of net profit attributable to shareholders and for the full year 2013, Nordgold paid 7.86 US$ cents per share or per GDR in dividends, bringing the total pay-out to US$29.7 million.
Operating results – Key highlights
| 2013 | 2012 | Change | |
|
Ore mined (Kt) |
16,763 | 16,032 | 5% |
|
Ore milled (Kt) |
18,543 | 15,141 | 22% |
|
Grade (g/t) |
1.89 | 1.86 | 2% |
|
Recovery (%) |
81.0 | 79.2 | 1.8 pp |
|
Gold production (Koz) |
924.4 | 716.9 | 29% |
|
Gold sold (Koz) |
924.2 | 717.3 | 29% |
|
TCC (US$/oz) |
819 | 836 | (2%) |
Operating results – Bissa
| 2013 | |
| Ore mined (Kt) | 4,536 |
| Ore milled (Kt) | 3,387 |
| Grade (g/t) | 2.67 |
| Recovery (%) | 88.9 |
| Gold production (Koz) | 254.3 |
| Gold sold (Koz) | 254.3 |
| TCC (US$/oz) | 467 |
Operating results – Taparko
| 2013 | 2012 | Change | |
|
Ore mined (Kt) |
1,567 | 1,835 | (15%) |
|
Ore milled (Kt) |
1,366 | 1,580 | (14%) |
|
Grade (g/t) |
2.99 | 3.09 | (3%) |
|
Recovery (%) |
80.5 | 82.1 | (1.6 pp) |
|
Gold production (Koz) |
108.4 | 126.7 | (14%) |
|
Gold sold (Koz) |
108.5 | 126.8 | (14%) |
|
TCC (US$/oz) |
771 | 611 | 26% |
Operating results – Lefa
| 2013 | 2012 | Change | |
|
Ore mined (Kt) |
3,880 | 6,312 | (39%) |
|
Ore milled (Kt) |
5,826 | 5,932 | (2%) |
|
Grade (g/t) |
1.06 | 1.07 | (1%) |
|
Recovery (%) |
83.5 | 84.1 | (0.6 pp) |
|
Gold production (Koz) |
162.7 | 171.9 | (5%) |
|
Gold sold (Koz) |
162.7 | 171.9 | (5%) |
|
TCC (US$/oz) |
1,346 | 1,183 | 14% |
Operating results – Buryatzoloto
| 2013 | 2012 | Change | |
| Ore mined (Kt) | 689 | 686 | 0% |
| Ore milled (Kt) | 668 | 695 | (4%) |
| Grade (g/t) | 4.72 | 5.04 | (6%) |
| Recovery (%) | 92.2 | 93.3 | (1.1 pp) |
| Gold production (Koz) | 98.5 | 108.9 | (10%) |
| Gold sold (Koz) | 98.4 | 108.9 | (10%) |
| TCC (US$/oz) | 978 | 813 | 20% |
Operating results – Berezitovy
| 2013 | 2012 | Change | |
| Ore mined (Kt) | 2,059 | 1,990 | 3% |
| Ore milled (Kt) | 1,741 | 1,437 | 21% |
| Grade (g/t) | 2.20 | 2.72 | (19%) |
| Recovery (%) | 89.5 | 90.1 | (0.6 pp) |
| Gold production (Koz) | 120.3 | 116.3 | 3% |
| Gold sold (Koz) | 120.1 | 116.4 | 3% |
| TCC (US$/oz) | 789 | 626 | 26% |
Operating results – Neryungri
| 2013 | 2012 | Change | |
| Ore mined (Kt) | 1,786 | 2,092 | (15%) |
| Ore milled (Kt) | 2,891 | 3,084 | (6%) |
| Grade (g/t) | 0.88 | 1.02 | (13%) |
| Recovery (%) | 75.0 | 75.0 | 0 pp |
| Gold production (Koz) | 66.5 | 66.3 | 0% |
| Gold sold (Koz) | 66.4 | 66.7 | 0% |
| TCC (US$/oz) | 764 | 767 | 0% |
Operating results – Aprelkovo
| 2013 | 2012 | Change | |
| Ore mined (Kt) | 1,793 | 2,461 | (27%) |
| Ore milled (Kt) | 1,644 | 1,465 | 12% |
| Grade (g/t) | 1.27 | 1.35 | (6%) |
| Recovery (%) | 46.7 | 47.7 | (1.0 pp) |
| Gold production (Koz) | 32.7 | 35.9 | (9%) |
| Gold sold (Koz) | 32.7 | 35.8 | (9%) |
| TCC (US$/oz) | 1,020 | 863 | 18% |
Operating results – Suzdal
| 2013 | 2012 | Change | |
| Ore mined (Kt) | 453 | 431 | 5% |
| Ore milled (Kt) | 512 | 491 | 4% |
| Grade (g/t) | 7.25 | 7.61 | (5%) |
| Recovery (%) | 69.1 | 65.3 | 3.8 pp |
| Gold production (Koz) | 81.1 | 90.9 | (11%) |
| Gold sold (Koz) | 81.1 | 90.9 | (11%) |
| TCC (US$/oz) | 733 | 803 | (9%) |
Sustainability
As a multinational company operating in various jurisdictions and diverse communities, we pay special attention to sustainable business practices, always taking into account the exact needs and expectations of different countries and implementing the best-industry practice in safety standards. This includes our commitment to achieving a Zero harm target for all our mines
Successfully commissioned in January 2013, Bissa was ramped up to full production within less than 6-months and significantly outperformed expectations for the year
Achieved record production in 2013 due to higher ore mined volumes, achieved mill availability of 88-90% and heap-leach operation launched
Launched production at the Bouroum pit in Q4 2013 and maintained recovery rates of over 80%
Continued to modernise the processing plant, extending the period of active leaching to 12 months, upgraded infrastructure facilities, including construction an all-season road
Continued to implement the turnaround programme and improve production effectiveness
Production optimisation and establishing ways to maximise extraction levels
Increased efficiency by continuing the drilling programme, making process improvements, and implementing a labour productivity programme
Underground mining fleet upgraded and restored recovery rate levels of nearly 70%
Increased efficiency by continuing the drilling programme, making process improvements, and implementing a labour productivity programme
