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Nord Gold N.V (NORD)

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Monday 16 May, 2016

Nord Gold N.V

Q1 2016 Financial Results

RNS Number : 2780Y
Nord Gold N.V.
16 May 2016
 

Nord Gold N.V. reports unaudited financial and operating results for the first quarter ended 31 March 2016

 

Amsterdam, Netherlands, 16 May 2016

 

Nord Gold N.V. ("Nordgold" or the "Company", LSE: NORD), the internationally diversified low-cost gold producer, announces a 28% increase in EBITDA1 to US$119.3 million and a 8% reduction in All-In Sustaining Costs1 ("AISC") to US$825 per ounce from Q4 2015.

 

Q1 2016 Highlights:

 

·    EBITDA up 28%quarter-on-quarter ("QoQ") to US$119 million. EBITDA margin increased to 48%.

·    Nordgold maintained its position at the lower end of the global cost curve with:

ü Total cash costs1 ("TCC") of US$579/oz (down 14% QoQ) and

ü AISC of US$825/oz (down 8% QoQ).

·    Operating cash flow of US$80.5 million.

·   Meaningful free cash flow1 of US$13.3 million while investing in construction of new low-cost Bouly mine with production expected to start in Q3 2016.

·   Normalised net profit attributable to shareholders2 more than doubled to US$39.4 million from US$19.6 million in Q4 2015.

·   EBITDA down 36% year-on-year ("YoY") due to lower gold price and sales against the exceptional Q1 2015 comparative figures, which included a significant amount of refined gold and gold doré that was produced in Q4 2014 but sold in Q1 2015.

·    The Board has declared a dividend of 3.19 US cents per share / GDR for Q1 2016, representing a total pay-out of US$11.8 million.

Highlights

Q1 2016

Q1 2015

Change, YoY

Q4 2015

Change,

QoQ

Gold production, koz

209.5

266.7

(21%)

241.9

(13%)

Gold sold, koz

210.6

290.5

(28%)

240.8

(13%)

Average realised gold price per ounce sold, US$/oz

1,189

1,210

(2%)

1 096

8%

Revenue, US$m

250.5

351.3

(29%)

264.0

(5%)

EBITDA, US$m 2

119.3

185.4

(36%)

93.5

28%

TCC, US$/oz 2

579

539

7%

671

(14%)

AISC, US$/oz 2

825

680

21%

892

(8%)

LTIFR

1.49

2.95

(49%)

1.30

15%

Message from the CEO

"We have delivered a solid financial performance in the quarter with EBITDA up on the preceding quarter, and positive free cash flow generation while constructing Bouly mine. We remain firmly in the lowest quartile of the industry cost curve and continue to generate strong cash flow from our operations. This in turn enables us to invest in our de-risked and capital efficient development pipeline.

"Both our production and costs forecasts for the year remain unchanged and we remain committed to the strategy that delivers robust returns for our shareholders. I am pleased to confirm that our Bouly construction project is ahead of schedule and budget and we look forward to bringing the project on stream in Q3 2016.

Nikolai Zelenski, Chief Executive Officer, Nordgold

Operating Highlights

·   Lost time injury frequency rate (LTIFR) for Q1 2016 was 1.49, an improvement of 49% compared with Q1 2015 (2.95), but higher than in Q4 2015 (1.30).

·  Refined gold production decreased to 209.5 thousand gold equivalent ounces ("koz") against the very high comparative quarter in 2015, which included 28.5 koz of gold doré produced but not refined at the end of 2014, which was refined in Q1 2015. Lower production was also due to decreased output at the Bissa and Berezitovy mines.

·   Bissa production was mainly impacted by the decision to bring forward a planned upgrade of the SAG mill into the first quarter, as well as mining lower grade ore. We continue to expect Bissa to produce 200 koz in the year as planned.

·    Operating performance of seven other mines was largely in line with the 2016 production plan.

·   Taparko turnaround programme resulted in higher grade and recovery in Q1 2016 leading to a 19% increase in production QoQ.

·   Bouly mine construction in Burkina Faso continued ahead of schedule, with production expected to start in Q3 2016. The mine will produce an average of 120 koz per year for 10 years at AISC of US$730/oz.

·    Suzdal is on track to commission the HiTeCC Leaching (Hot Leach) project in Q2 2016 with commercial levels of production scheduled for Q3 2016.

Financial Highlights

·  The average realised gold price in Q1 2016 was US$1,189 per oz, a decrease of 2% compared with Q1 2015 (US$1,210/oz) and an increase of 8% compared with Q4 2015 (US$1,096/oz).

·   Revenue in Q1 2016 was US$250.5 million compared with US$264.0 million in Q4 2015 and US$351.3 million in Q1 2015. In Q1 2015, the Company benefited from higher refined gold production and sales, which included 24.5 koz of refined gold and 28.5 koz of gold doré, which were produced in the end of 2014 and sold in Q1 2015.

·   EBITDA in Q1 2016 increased by 28% QoQ to US$119.3 million mainly driven by lower costs, as well as the depreciation of local currencies in countries where Nordgold operates, against the US dollar. EBITDA margin in Q1 2016 increased to 47.6% from 35.4% in Q4 2015.

·   Net profit increased to US$41.1 million in Q1 2016 from US$7.7 million in Q4 2015. Net profit for Q1 2015 was US$84.3 million and benefitted from the aforementioned higher refined gold production and sales.

·   Normalised net profit attributable to shareholders in Q1 2016 more than doubled to US$39.4 million from US$19.6 million in Q4 2015.

Focus on costs

·   Nordgold maintained its position in the lowest cost quartile of the industry cost curve with consolidated AISC down by 8% QoQ or by US$67/oz to US$825/oz in Q1 2016.

·   Seven out of Nordgold's nine mines achieved AISC improvement QoQ and the most significant reductions were recorded at Taparko (down 45% or US$939/oz), the two Buryatzoloto mines (down 26% or US$217/oz), Suzdal (down 17% or US$99/oz) and Berezitovy (down 13% or US$89/oz). Bissa AISC increased by 44% QoQ or by US$286/oz in Q1 2016 to US$940/oz due to higher TCC (up 27% QoQ) and maintenance capex related mainly to the decision to bring forward a planned upgrade of the SAG mill into the first quarter, as well as mining lower grade ore.

·    Nordgold's consolidated TCC decreased by 14% or by US$92/oz QoQ to US$579/oz in Q1 2016 mainly driven by benefit from the depreciation of local currencies in countries where Nordgold operates, against the US dollar. The TCC reduction was also driven by improved Taparko performance, lower fuel and energy consumption rate, third party services costs and G&A expenses. We continue to implement cost optimisation and operational improvement programmes at all our mines.

Cash generation

·   In Q1 2016, Nordgold generated cash flow from operating activities (after interest and income tax paid) of US$80.5 million, compared with US$87.8 million in Q4 2015 and US$157.7 million in Q1 2015.

·    Q1 2016 capital expenditure ("capex")3 decreased by 2% QoQ to US$77.2 million, compared with US$79.0 million in Q4 2015.

·    A dedicated focus on cost reduction, operating excellence and a diligent approach to capex allowed the Company to generate meaningful free cash flow of US$13.3 million while investing in the construction of the new low-cost Bouly mine with production expected to start in Q3 2016.

·   Cash and cash equivalents as at March 31, 2016 were US$365.3 million with net debt of US$588.2 million, compared with US$361.7 million cash and cash equivalents and net debt of US$584.0 million as at December 31, 2015.

Outlook

·    Nordgold reiterates 2016 full year production guidance of 950 - 1,010 koz.

·    The Company will maintain its low-cost performance by continued focus on efficiencies and reiterates FY 2016 AISC guidance of US$800/oz - US$850/oz.

·    2016 capex is now anticipated to be approximately US$360 million, US$10 million less than initial capex guidance of US$370 million due to lower construction capex of the Bouly project.

 

1.    For detailed definition, please see "Non-IFRS Financial Measures".

2.    Normalised Net Profit attributable to shareholders adjusted for the non-current assets and inventories impairment or utilisation of impairment.

3.    For detailed definition, please see "Non-IFRS Financial Measures".

 

For the full report, please follow the link:

 

http://www.rns-pdf.londonstockexchange.com/rns/2780Y_-2016-5-15.pdf

 

Telephone Conference and Q&A Session

Nikolai Zelenski, Chief Executive Officer of Nordgold, Dmitry Guzeev, Chief Financial Officer and Louw Smith, Chief Operating Officer will present the Company's financial results for Q1 2016 on a conference call to be held on Monday, 16 May 2016 at 2.00 pm BST (4.00 pm Moscow time). The presentation will be followed by a Q&A session. To participate in the telephone conference, please register in advance.

Registration Details

Conference Title: Nordgold's Presentation of Q1 2016 Financial Results

To participate in the telephone conference, please dial:

Great Britain
+44 (0) 203 043 2441

0808 238 1775

 

USA
+1 855 402 7761

 

Russia
+7 495 705 9472
 

Webcast

The presentation will be broadcast live over the Internet and will also be available as a recording after the conference.


To participate in the webcast please follow the link:

 

http://www.anywhereconference.com?UserAudioMode=DATA&Name=&Conference=135301215&PIN=37874087

 

Materials

The Company's financial and operating results for the first quarter ended 31 March 2016 and associated presentation materials will be available on the Company's official website: www.nordgold.com on 16 May 2016.

 

Enquiries

 

Nordgold

 

Valentina Bogomolova
Head of IR

Tel: +7 (495) 644 4473
[email protected]

Olga Ulyeva
Head of Media Relations

Tel: +7 (495) 644 4473
[email protected]

Powerscourt

 

Ian Middleton
Giles Read
Tessa Berry

Tel: +44 (0) 20 7250 1446

 

For further information on Nordgold please visit the Company's website - www.nordgold.com

Notes to Editors

About Nordgold

Nordgold (LSE: NORD) is an internationally diversified low-cost gold producer established in 2007 and publicly traded on the London Stock Exchange. Nordgold has a proven track record of operational excellence and benefits from a significant international development pipeline. The Company is relentlessly focused on shareholder value, committed to running safe, efficient, profitable operations, which enable it to generate strong cashflows and in turn, continue to invest in its pipeline of new growth opportunities while generating returns for investors. In 2015, Nordgold produced 950 koz of gold with all-in sustaining costs of US$793 per ounce, maintaining its position at the lower end of the global cost curve.

Nordgold operates 9 mines (5 in Russia, 2 in Burkina Faso and one each in Guinea and Kazakhstan). It has 2 active development projects (Bouly in Burkina Faso and Gross in Russia), 4 advanced exploration projects and a diverse portfolio of early-stage exploration projects and licences in Burkina Faso, Russia, French Guiana and Canada. Nordgold employs over 8,000 people.

 

Cautionary Note Regarding Forward-Looking Statements

Certain information contained in this press release, including any information as to Nordgold's estimates, strategy, projects, plans, prospects, future outlook, anticipated events or results or future financial or operating performance and production may constitute "forward-looking information" within the meaning of applicable securities laws. All statements, other than statements of historical fact, constitute forward-looking information. Forward-looking information can often, but not always, be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", "predicts", "potential", "continue" or "believes", or variations (including negative variations) of such words, or statements that certain actions, events or results "may", "could", "would", "should", "might", "potential to", or "will" be taken, occur or be achieved or other similar expressions concerning matters that are not historical facts. The purpose of forward-looking information is to provide the reader with information about management's expectations and plans. Readers are cautioned that forward-looking statements are not guarantees of future performance.

All forward-looking statements made or incorporated in this press release are qualified by these cautionary statements.

Forward-looking information involves significant risks, assumptions, uncertainties and other factors that may cause actual future realities or anticipated events to differ materially from those expressed or implied in any forward-looking information and, accordingly, should not be read as guarantees of future performance or realities. Material factors or assumptions that were applied in formulating the forward-looking information contained herein include the assumption that the business and economic conditions affecting Nordgold's operations will continue substantially in their current state, including, without limitation, with respect to industry conditions, general levels of economic activity, market prices for gold, competition for and scarcity of gold mine assets, achievement of anticipated mineral reserve and mineral resource tonnages or grades, ability to develop additional mineral reserves, acquisition of funding for capital expenditures, adequacy and availability of production, processing and product delivery infrastructure, electricity costs, continuity and availability of personnel and third party service providers, local and international laws and regulations, foreign currency exchange rates and interest rates, inflation, taxes, and that there will be no unplanned material changes to Nordgold's facilities, equipment, customer and employee relations and credit arrangements. Nordgold cautions that the foregoing list of material factors and assumptions is not exhaustive. Many of these assumptions are based on factors and events that are not within the control of Nordgold and there is no assurance that they will prove correct. The risks and other factors that may cause actual future realities or anticipated events to differ materially from those expressed or implied in any forward-looking information include, but are not limited to Nordgold's ability to execute its development and exploration programs; the financial and operational performance of Nordgold; civil disturbance, armed conflict or security issues at the mineral projects of Nordgold; political factors; the capital requirements associated with operations; dependence on key  personnel; compliance with environmental regulations; estimated production; and competition.

Actual performance or achievement could differ materially from that expressed in, or implied by, any forward-looking information in this press release and, accordingly, investors should not place undue reliance on any such forward-looking information. Further, any forward-looking information speaks only as of the date on which such statement is made, and Nordgold does not undertake any obligation to update any forward-looking information to reflect information, events, results, circumstances or realities after the date on which such statement is made or to reflect the occurrence of unanticipated events, except as required by applicable securities laws. All forward-looking information contained in this press release is qualified by such cautionary statements. New risk factors emerge from time to time, and it is not possible for management to predict all of such risk factors and to assess in advance the impact of each such factor on Nordgold's business or the extent to which any factor, or combination of factors, may cause actual realities to differ materially from those contained in any forward-looking information.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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