Nordgold

History

Nordgold was established as Severstal Gold, a gold producing subsidiary of Severstal, the Russian steel company owned by Alexey Mordashov.

In early 2007, Severstal acquired the Suzdal and Zherek mines in Kazakhstan, as well as the Aprelkovo and Neryungri mines in Russia. In August 2008, Severstal acquired control over the Balazhal mine in Kazakhstan as well as Irokinda, Zun-Holba and Berezitovy mines in Russia and the Taparko and Bissa mines in Burkina Faso. In late 2010 – early 2011, the company acquired control over the Lefa mine in Guinea.

In early 2012, Nordgold separated from Severstal and became a publicly listed company via the listing of Global Depositary Receipts on the London Stock Exchange.

In January 2013, Nordgold launched the new Bissa mine in Burkina Faso.

Operations

Nordgold's production was originally concentrated in Russia and the CIS but later expanded to West Africa. The region generates about half of the company's gold production.

As of 31 December 2015, proven and probable reserves of Nordgold stood at 14.0 Moz of gold while measured, indicated and inferred resources were estimated at 28.5 Moz.

Development projects and exploration

Bouly is the project under constraction located 5 km from Nordgold’s Bissa mine in Burkina Faso. The project represents a large low-grade gold mineralisation, favourable for heap leach treatment. Bouly’s average annual production will be approximately 120 koz over a life of mine of 10 years at AISC of US$730/oz. Bouly production expected to start in H2 2016. Total capex of the project is planned of $155 mln.

Shortly Nordgold will start construction of Gross mine, an all-season open-pit heap leach project located in southwestern Yakutia, Russia, 4 km east of the Neryungri mine. Production is to begin up to two years later. The project will require c. US$250 million of total capital investment during construction. At full production, Gross is expected to mine and process c. 12 million tonnes of ore, producing c. 230 koz of gold per year for 17 years.

The Montagne d’Or gold deposit is the development project of Nordgold located in north-west French Guiana. In January 2016, Nordgold assumed operational ownership of the project. Pursuant to an agreement with Columbus Gold Corp. Nordgold has the right to earn a 50.01% interest in the Montagne d'Or gold deposit, by funding a minimum of US$30 million in expenditures and completing a Feasibility Study by no later than the end of Q1 2017. On top of that in January 2016, Nordgold acquired an additional 5% interest in the project in the form of an advance. Formal acquisition and transfer of the 5% interest will occur along with the initial 50.01% interest. If Nordgold does not earn the 50.01% interest Columbus will be required to refund the advance. The PEA of the project demonstrated positive economic data for an open pit mine with conventional CIL processing technology and average annual production of 273 koz for the first 10 years.

The Pistol Bay Gold Project is a high grade exploration project located in Nunavut Territory, northern Canada, on the west coast of Hudson Bay. Nordgold holds a 51.5% interest in Northquest Ltd. , the owner of the project. The exploration programme at Pistol Bay in 2015 confirmed the project’s potential as a high quality deposit of substantial scale with high grade ore.

Shareholders

As at April 7, 2016, issued share capital consists of 370,396,229 ordinary shares, almost 9.25% of which are listed on the LSE in form of GDRs.

Alexey Mordashov is the principal shareholder of Nordgold with a 90.73% stake in the Company.