Nordgold: Exploring for Resource Growth March, 2016 1 Howard Golden, Exploration Director / NORD LI (LSE)
Nordgold: Exploring for Resource Growth
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Howard Golden, Exploration Director / NORD LI (LSE)
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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 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 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 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 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
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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
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3 3 Actual production in 2015
Operating Mines
Developing Assets
Exploration Areas
Exploration Assets
Suzdal
75 koz
Taparko
83 koz
Lefa
214 koz
Bissa
235 koz
Aprelkovo
20 koz
Neryungri
84 koz
Gross
230E+ koz*
Berezitovy
125 koz
Buryatzoloto
113 koz
Montagne d’Or Bouly
120E+ koz*
Pistol Bay
37%
8% 23%
33%
2015 Revenue by Geography
Russia
Kazakhstan
Guinea
Burkina Faso
Nordgold: Diversified Asset Base Across 4 Continents
* Expected average annual production
4 4
International gold producer with operations in Russia, Kazakhstan, Burkina Faso and Guinea
Diversified asset portfolio: 9 producing mines, 2 development projects and 4 advanced exploration projects
World class board and management team with a commitment to high standards of corporate governance
Low-cost producer with 2015 AISC down 10% YoY to US$793/oz, maintaining its position within the industry lowest cost quartile
Strong Free Cash Flow generation of US$158.1 million in 2015 despite investing in construction of new Bouly mine
Track record of delivering on promises, both in operations as well as in project development from exploration to construction and to ramp-up
2015 Key Highlights
950.0 koz Gold Production
TCC US$604/oz
AISC US$793/oz TCC & AISC
US$520 million
46% EBITDA & Margin
26% Production CAGR
2008 – 2015
2016 Outlook
Nordgold – a Premium Gold Mining Company
950 – 1,010 koz Gold Production
US$800-850/oz AISC
c.US$370 million
incl. US$195m for Bouly
&Gross construction
Capex
5 5
Nordgold is a LOW COST Producer
Compared to Peers
0
200
400
600
800
1,000
1,200
1,400
0 5,000 10,000 15,000
No
rdg
old
Gold production, koz
722
H1 2015 All-In Sustaining Cost, US$/oz Au Eq.
• H1 2015 Nordgold’s AISC was US$722/oz - one of the lowest compared to peers
• FY 2015 Nordgold AISC was US$793/oz (down 10% YoY)
• Free Cash Flow of US$158.1m in 2015 while investing in construction of Bouly mine
6 6
Construction Phase Development Phase Advanced Exploration Early Exploration
(1) JV with a partner (50/50)
FS completed
In engineering or construction
Pilot production at Gross
Pro
du
cti
on
in
2-5
ye
ars
Pro
du
cti
on
in
6-8
ye
ars
Pro
du
cti
on
in
1-2
ye
ars
Satellite
Standalone
Nordgold Pipeline is Robust and Balanced with Early Stage and Advanced Projects
Pro
du
cti
on
in
3-5
ye
ars
Significant drilling performed
Established resources
Scoping/PEA completed or underway
Potential resource identified
Target delineation
Established resources
PEA completed or FS underway
Onot-Kitoy
Russia
Pistol Bay
Canada
Zhanok
Russia
Lefa Corridor
Guinea
Kolbachi
Russia
Goengo
Burkina Faso
Nerchinsk
Russia
Uryakh
Russia
Prognoz(1)
Russia
Kangarse
Burkina Faso
Yimiougou
Burkina Faso
Yeou
Burkina Faso
Montagne d’Or
French Guiana
Zinigma
Burkina Faso
Ronguen
Burkina Faso
Gross
Russia
Bouly
Burkina Faso
4.5 Moz reserves
8.8 Moz resources
1.3 Moz reserves
3.5 Moz resources
Robust Pipeline to Underpin Future Growth
7 7
Compelling Economics of New Projects
New projects are efficient: low construction capex and low production costs
• Nordgold projects are capital-efficient: low capex per ounce of production
• Nordgold projects are competitively positioned at the low end of the global AISC curve
0
200
400
600
800
1,000
1,200
1,400
0 5,000 10,000 15,000
Nordgold’s New Projects AISC ($/oz) vs H1 2015 Global AISC Curve
koz
Bouly US$730/oz
Gross US$750/oz
Montagne d’Or US$711/oz
No
rdg
old
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22
0 400 800 1,200 1,600 2,000
Bissa
Blagodatnoye
Gross
Montagne d'Or
Bouly
Copler
Essakane
Twanziga
Tongon
Phoenix
Nzema
Tropicana
Buzwagi
Selected Gold Projects - Capex per ounce of Production, US$/oz
8 8
2015 – discovered or converted
more gold than was mined
Focus on near-mine, greenfield
and M&A potential in a good
market for buyers
2016 – robust budget;
aggressive exploration planned
Exploration – Delivering the Future
9 9
Bouly – Exploration Success
Bouly (Burkina Faso): Location and
Geology
Bouly – large consistent
porphyry-hosted gold
deposit open at depth
10 10
Bouly – Exploration Success
Large ore body: 1.3 Moz at 0.56 g/t in Probable Reserves and 3.5 Moz at 0.57g/t in M,I&I Resources
Straightforward heap leach metallurgy with superior gold recovery at above 83%
Low cost mining at strip ratio of 0.7 t/t
Located within 5 km from Nordgold’s operating Bissa mine with key infrastructure already in place
Feasibility Study with strong project economics: 26% IRR at a gold price of US$1,100/oz
US$85 million invested in 2015, additional US$70 million will be invested in 2016
Construction continuing on schedule and within budget, Production expected to start in H2 2016
Lo
cati
on
Location Burkina-Faso, 5 km east from Bissa mine
Infrastructure Bissa infrastructure is available to support
Bouly
Ex
plo
rati
on
His
tory
1996 Rangold defines low-grade Au/Cu soil
anomaly
2004 High River Gold acquires property
2005 One hole drilled – low grade zone
2009 Nordgold acquires HRG – recognizes
porphyry style and pursues drilling
2010 JORC resource defined
2014 Met testing and decision to mine
Bouly – Exploration Overview
Project Summary
Bouly Deposit Construction Phase
11 11
Burkina Faso – Exploration Growth Continues
Noungou and Yimiougou (Burkina
Faso): Location and Geology
10m @ 6.78g/t Au
11m @ 4.53g/t Au
Yimiougou Section 4039N
Weathered
Zone
Moderately Weathered
Zone
Slightly Weathered
Zone
25m
12 12
Gross– Exploration Success
Gross (Russia): Location and Geology
Oxide ore
Transition ore
Primary ore
Gross Cross-section
13 13
World class ore body: 4.5 Moz at 0.73 g/t in P&P Reserves and 8.6 Moz at 0.67 g/t in M,I&I Resources
Straightforward low cost heap leach metallurgy with excellent recovery rate at above 82.5%
Located just 5 km from Nordgold’s Neryungri mine with all necessary infrastructure in place
Feasibility study indicates very strong project economics with IRR above 25% at a gold price of US$1,100/oz
Construction has been approved by the Board to start in early 2016, with 2016 capex of US$125M
Production start up expected two years later
Lo
cati
on
Location Russia, Yakutia
Infrastructure 5 km from Neryungri operating mine, access
by all-season road
Ex
plo
rati
on
His
tory
1982 Occurrence discovered by government
geologists
1993 Preliminary government resource calculated
2005 Neryungri mine carries out exploration
2013 Mining license granted
2015 Feasibility based on P&P reserves of
4.5 Moz at 0.73 g/t Au
Gross – Exploration Overview Gross Exploration Drilling
Project Summary
Gross– Exploration Success
14 14
Project Update
The successful pilot production confirmed
project recovery, low cost profile and robust
economics and also reduces execution risk
AISC of the pilot production in 2015 at
US$638/oz
Detailed design work was commenced in Q3
2015 and has continued in Q4 2015
Engineering and long-lead equipment ordering
related to ore processing system including the
primary gyratory crusher, as well as turbines
and boilers for 16MW power plant, were
ramped up
In Q1 2016, project design and purchasing will
accelerate to support 2016 construction
activities
Earthworks and construction works on-site will
commence in March-April 2016
Gross – Fully Permitted and Ready for Construction
15 15
Montagne d’Or - Exploration Success
47m at 4.0g/t
50m at 4.6g/t
18m at 1.9g/t
12m at 5.6g/t
8m at 4.2g/t
Cross Section and Notable Intervals
Montagne d’Or (French Guiana):
Location and Geology
16 16
Montagne d’Or - Exploration Success
Project Summary
World-class high-grade ore body: 3.8 Moz at 2.14 g/t of
in-pit Indicated and Inferred Resources
Favorable stripping ratio
Straightforward metallurgy: gravity + cyanidation.
Excellent recovery - averaged at above 95% in lab tests
Located in politically stable and low-risk jurisdiction
Significant reserve upside potential at strike and in depth
Pre-feasibility Study finalized in June, 2015 and
demonstrated positive economic data with CIL
technology
Preliminary ESIA were completed in Q1 2015,
completion of full ESIA is expected by Q4 2016
Lycopodium won tender to complete Feasibility Study,
will be delivered in Q4 2016
Nordgold became project operator from January 2016
Montagne d’Or Camp Montagne d’Or Project Overview
Lo
cati
on
Location French Guiana, 80 km from
port of St Laurent
Infrastructure Airstrip, all-season road, camp
Ex
plo
rati
on
His
tory
1994-2011 Guyanor-Golden Star drills out resource of
1.9 Mz @ 1.6 g.t Au
2010-2013 Columbus Gold does extensive drilling
2014 Nordgold definitive option agreement signed
2015 PEA complete – BFS commenced –
Completion in 2016
17 17
Nordgold New Project Criteria
♦ Located in mining-friendly geographies
♦ With gold as the primary metal
♦ Non-refractory ores
♦ Not less than 2Moz of reserve potential with grade at
above 2g/t, low to medium strip ratio
♦ Potential annual production at above 150 koz
What We Look For in Greenfield Projects