Nord Gold to mine 1 mln oz after Bissa, Gross reach capacity
MOSCOW. March 5 (Interfax) - Nord Gold N.V., the gold mining company spun off from Russian steel major Severstal , plans to increase production to 1 million ounces of gold per year once its Bissa mine in Burkina Faso and Gross mine in Yakutia reach design capacity, CEO Nikolai Zelensky said in a conference call on Monday.
"If Bissa and Gross will operate at full capacity, we will reach the target of 1 million ounces. The launch of Gross will be the main milestone on this path," Zelensky said.
Bissa was launched at the beginning of 2013 and Nord Gold plans to produce up to 100,000 ounces of gold at this mine this year. It plans to produce the first gold at the Gross mine, which is still under construction, in the fourth quarter of 2013 and production there for the year could total about 15,000 ounces.
The company's earlier production guidance for 2013 was 770,000-850,000 ounces of gold.
Zelensky said the company can support further growth through development of existing assets and acquisition of new ones, but prefers the former. "The alternative to exploration is purchase of developed and conveniently located resource bases, but we are of course intent on organic growth," he said.
The company has two "attractive projects" that could become mines - Uryakh in Irkutsk Region and Bouly in Burkina Faso, Zelensky said. The resources of Bouly are estimated at 1 million ounces of gold with a grade of 0.77 g/t Au, while Uryakh has resources of 800,000 ounces and a grade of 1.74 g/t Au.
The Uryakh and Bouly projects are still at the exploration stage. "We plan to begin pre-feasibility studies based on the exploration results of this year if the results confirm our expectations," Zelensky said.
Nord Gold plans to spend about $100 million on all exploration in 2013, down from $120.3 million in 2012.
Exploration expenditures could be reduced further in 2014. "Next year they might decrease further. But I don't think they will amount to less than $50 million per year, because we are intent on developing new projects," Zelensky said.
