Nordgold boosts gold production 9% to 194,000 oz in Q3
MOSCOW. Oct 11 (Interfax) - Nordgold boosted output 9% year-on-year in Q3 to 194,000 gold equivalent ounces, the company said in a statement.
This was 17% higher than in Q2 2012.
Sales revenue grew to $322.5 million in Q3 2012, from $253.4 million a year previously, as gold sales rose 29%, although the sale price of gold fell 2% to $1,670/oz.
The company said it was on track to produce a targeted 720,000-770,000 oz gold equivalent.
Nordgold produced 515,000 oz (16 tonnes) of gold equivalent in January-September, 6% less than in the same period of last year.
Nordgold operating results, by assets:
| '000 oz | Q3 2012 | Q3 2011 | % | 9M 2012 | 9M 2011 | % |
| Lefa | 40,7 | 36,9 | 10 | 124,1 | 146,4 | -7 |
| Taparko | 29,4 | 33,8 | -13 | 91,2 | 105,1 | -13 |
| Suzdal (including (Zherek) | 27,9 | 10,9 | 157 | 65,7 | 52,1 | 26 |
| Buryatzoloto | 24,7 | 33,6 | -26 | 86,6 | 98,1 | -12 |
| Berezitovy | 33,4 | 25,5 | 31 | 79,2 | 77,7 | 2 |
| Neryungri | 23,9 | 26,2 | -9 | 43,9 | 50,1 | -12 |
| Aprelkovo | 13,9 | 11,7 | 19 | 24,3 | 21,3 | 14 |
| Total Nordgold: | 194 | 178,4 | 9 | 515 | 550,7 | -6 |
Nordgold continues to make progress in resolving operational issues across most of its mines with robust production and clearly visible potential for upside for the rest of 2012 and in 2013 at Lefa, Suzdal, Berezitovy and both Russian heap leach operations - Neryungri and Aprelkovo. Head grades at Buryatzoloto and recoveries at Taparko remain an uncertainty.
The Lefa mine in Guinea is showing improvements along a variety of production KPIs. Availability and productivity of mining and processing equipment has strongly improved y-o-y which translated into higher production volumes in Q3 2012. Very importantly, the heavy wet season that peaks in Q3 has had a minimal impact on Lefa productivity due to preparatory measures taken by the mine management. Mine grade in Q3 2012 has been 13% lower than in the previous quarter or a year ago. The geological model indicates that ore grade will start improving in December and better grades will continue in 2013. Gold recovery at Lefa, while better than in Q1 2012 and in line with Q2 2012, is still below target levels. To address this we are in the process of implementing a series of technical improvements, such as upgrading Carbon in Pulp ("CIP") tanks into Carbon in Leach ("CIL") tanks, and erecting new screening systems, and additional elution columns to improve the recovery rate. These improvements are expected to be completed by the end of 2012.
Productivity at the Berezitivy mine in Russia's Amur region increased by 68% y-o-y with record quarterly production volumes of 33.4 koz compared to 25.5 koz for Q3 2011 (31% y-o-y). With the second crusher and new pinion successfully installed in the middle of Q2 2012 we expect strong production performance at the mine in the future. The new heap leach operation on site is on track to start its gold production in Q4 2012.
The Taparko mine in Burkina Faso has been the second biggest underperformer in the Nordgold portfolio relative to last year, with y-o-y production down 13%. Since the beginning of 2012 Taparko has experienced a drop in recoveries to levels below 80%. To address this problem, a regrind mill and two leach tanks were installed at the mine in early August 2012. During the installation, plant productivity reduced, resulting in lower ore processing volumes. Since the regrind mill launch, recoveries at Taparko have started to improve reaching 83% for the quarter. This is however still below our target of 85-90% and mine management continues to optimize milling parameters.
A pre-feasibility study for the Gross mine in Yakutia is being finalized and is expected to be completed in H2 2012; production is expected to commence in Q4 2013, with full scale capacity achieved in 2015.
The construction phase at the Bissa mine is progressing on time and on budget, the arrival of the mining fleet is mostly complete and first production is on track for H1 2013.
Nordgold was split off from Severstal in January 2012. The free float on the LSE has been approximately 10.6% following the exchange of shares owned by minority shareholders for depositary receipts. Alexei Mordashov owns the majority stake.
Nordgold is an established pure-play emerging-markets gold producer, with operations in Burkina Faso, Guinea, Russia and Kazakhstan. Nordgold has eight producing mines, two development projects, five advanced exploration projects and a broad portfolio of early exploration projects and licenses.
Nordgold, which was listed on the London Stock Exchange in January, owns 75.1% of Canada's High River Gold, which controls the Berezitoviy deposit in Amur region, gold mining company OJSC Buryatzoloto (Zun-Holba and Irokinda deposits in Buryatia), 50% of silver deposit Prognoz in Yakutia, together with Somita in West Africa's Burkina-Faso, which works at the Taparko deposit and the Bissa geological exploration project (production to start in 2013). Nordgold owns Neryungi-Metallik in Yakutia, Aprelkovo in Trans-Baikal territory, it consolidated 100% of Canadian company Crew Gold, working at the Lefa deposit in Guinea (West Africa) and three companies in Kazakhstan - Suzdal, Zherek and Balazhal
