Forth quarter and FY 2011 results presentation February 24 th 2012 - PowerPoint PPT Presentation

Forth quarter and FY 2011 results presentation February 24 th 2012

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Nikolai Zelenski Results at a Glance Chief Executive Officer

Summary of Quarterly and Full Year Results FY 2011 vs. FY 2010 Analysis 4Q2011 vs. 4Q2010 Analysis Average realised gold price of US$ 1,567 / oz, up 25% accompanied Average realised gold price of US$ 1,652 / oz, up 19% with the production increase by 28% to 754 koz with moderate accompanied with the production increase by 5% to 204 koz with increase in TCC of 23% and moderate increase in TCC of 12% Revenue of US$ 1,182m, up 57% vs. 2010 (US$ 754m) Revenue of US$ 385m up 43%, vs. 4Q2010 (US$ 269m) EBITDA of US$ 574m, up 55% vs. 2010 (US$ 370m) EBITDA of US$ 195m, up 43% vs. 4Q2010 (US$ 136m) Cash and equivalents slightly increased compared to 2010 (US$ Bissa project construction in Burkina Faso progressing rapidly 217m vs. US$ 212m) providing the comfortable liquidity cushion with engineering works mostly completed; on track to deliver first gold in early 2013 Gold equivalent resources of over 24 moz with further growth anticipated after new MER released in March/April 2012 Gross project in Russia on track to complete pre-feasibility in May/June 2012 Successful listing of GDRs on the London Stock Exchange in January 2012 (ticker: NORD) with 10.6% free float 4

Robust Production Growth FY2010-FY2011 Production Bridge Key FY2011 Production Highlights » 2011FY production at 754 koz, 28% higher than last year and on 800 the upper end of the guidance 2 750 14 5 5 5 36 » 2011 production growth was primarily driven by the consolidation 700 of the LEFA mine coupled with the higher productivity at key 650 122 mines – Berezivovy and Neryungri 600 754 » Targeted 2012 production of of 800 – 850 koz 550 500 589 » Key 2012 growth drivers: further debottlenecking of LEFA 450 coupled with the operational improvement and productivity 400 increase of Russian mines FY2010 LEFA Taparko Suzdal Neryungri Aprel- Berezi- Buryat- FY2011 kovo tovy zoloto 4Q 2010 – 4Q 2011 Production Bridge 4Q 2011 Production Highlights » 4Q production at 204 koz gold equivalent ounces, 14% ahead of 0 200 1 2 13 3Q 2011 and 5% up form 4Q 2010 6 15 9 » 180 Production decline on the West African mines in 4Q 2011 compared to 4Q 2010 was more than compensated by the growth on Russian and Kazakhstan assets 160 204 194 » Our African operations showed a sensible decrease during Q4 140 2011  Guinean LEFA mine faced lower grades and associated 120 decrease in recoveries 100  Production volumes were also affected by repair works in Q42010 LEFA Taparko Suzdal Neryungri Aprel- Berezi- Buryat- Q42011 December at our Taparko mine located in Burkina Faso kovo tovy zoloto 5

Financial Performance Indicators Average realized gold price (US$ /oz) +25% +19% » Growing gold demand from the developing economies and 1,652 1,567 unstable macroeconomic environment were the key drivers 1,384 1,251 for the gold price rally observed in 2011 » Average realized gold price was up 25% in 2011 versus 2010 reaching US$ 1,567 / oz 4Q 2010 4Q 2011 FY2010 FY2011 Revenue (US$ m) » 2011 revenue of US$ 1,182m was up 57% from 2010 (US$ 754m) driven by a higher realised gold prices and increased +57% production of 754k oz (up 28% year-on-year) +43% 1,182 » In 2011 54% of revenue was originated outside of Russia, 754 with Africa as main contributor with 43%, compared to 34% 385 269 in 2010 4Q 2010 4Q 2011 FY2010 FY2011 Revenue Breakdown (US$ m) FY2010 by geography FY2011 by geography 100%=US$ 754m 100%=US$ 1,182m Kazakhstan Kazakhstan Russia 11% Russia 14% Burkina Faso Burkina Faso 17% 46% 21% 52% 13% 26% Guinea Guinea 6

Financial Performance Indicators EBITDA (US$ m) +55% » Continued success in driving mine efficiency and +43% operational improvement resulted in an EBITDA increase 574 of 55% in 2011 to US$ 574m 370 195 136 » TCC increase was compensated by the growing realised gold prices and supported industry-high EBITDA margin 4Q 2010 4Q 2011 FY2010 FY2011 » EBITDA Margin Cash costs has moderately increased in 2011 as a result of increase in production cash costs at Lefa and Suzdal 51% 51% mines embittered with the fixed costs incurred by low 49% 49% production volumes. Cash costs were considerable effected by full year consolidation of higher cost Lefa mine 4Q 2010 4Q 2011 FY2010 FY2011 Total Cash Cost (US$ /oz) +23% +13% 715 687 636 557 4Q 2010 4Q 2011 FY2010 FY2011 7

Financial Performance Indicators Operating Cash Flow(US$ m) +60% +80% » The business continues to generate significant cashflows 398 reflecting healthy and efficient underlying operations. In 249 2011 operating cashflow increased by 60% to a record 184 US$ 398m 102 » 4Q 2010 4Q 2011 FY2010 FY2011 Strong cashflow is central to our longer term strategy enabling us to efficiently fund mine expansions and value Capital expenditures (US$ m) accretive acquisitions, whilst also maintaining the capacity to return surplus cash to shareholders as appropriate +87% +118% 319 » Nordgold has a focused capex strategy which aims to deliver growth from both existing and new assets. In 2011, 170 123 capex was US$ 319m, with a particular focus on 56 204 83 105 Nordgold’s key development projects: LEFA, Gross and 33 Bissa 4Q 2010 4Q 2011 FY2010 FY2011 Other Capex Exploration Capital Expenditures Breakdown (US$ m) FY2010 by objective FY2011 by objective 100%=US$ 168m 100%=US$ 319m 32% 35% 39% 36% 29% 29% Safety, facilities balancing, replacement of equipment Development 8 Exploration and evaluation

Operational Update

Diversified Production Base Key Production Highlights FY2010-FY2011 Production Breakdown » We continue to follow global diversification path with a 2010 2011 particular focus on Russia, CIS and West Africa 754 koz 589koz Celtic & » Traditionally most of the production is concentrated in Russia Celtic & Semgeo Semgeo 11% and CIS region (c. 57% in 2011) Buryatzoloto Buryatzoloto 15% 18% 23% » Share of the West African business has significantly increased LEFA Taparko 12% 17% for the past year (from 34% in 2010 to 43% in 2011) Berezitovy Berezitovy 12% » Launch of the key Nordgold’s growth projects Bissa and Gross 14% Taparko as well as further debottlenecking of LEFA mine will further 22% Neryungri & Aprelkovo LEFA drive production shift to West Africa leading to a more Neryungri & 16% 26% Aprelkovo balanced geographical structure 14% 4Q 2010-4Q 2011 Production Breakdown 4Q 2010 4Q 2011 204koz 194koz Celtic & Celtic & Semgeo Semgeo Buryatzoloto 15% Buryatzoloto 8% 18% 19% LEFA Berezitovy 28% 8% LEFA 24% Berezitovy 14% Neryungri & Taparko Aprelkovo 19% 18% Taparko Neryungri & 13% Aprelkovo 16% 10