Nord Gold : Q2 and H1 2016 Financial Results

Nord Gold SE reports financial and operating results for the second quarter and six months ended 30 June 2016

London, United Kingdom, 30 August 2016

Nord Gold SE ('Nordgold' or the 'Company', LSE: NORD), the internationally diversified low-cost gold producer, announces a 29% increase in net profitto US$53.1 million in Q2 2016 compared with Q1 2016.

Highlights:

· Net profit up 29% quarter-on-quarter ('QoQ') to US$53.1 million in Q2 2016. Net profit was US$94.1 million in H1 2016.

· EBITDAin Q2 2016 flat QoQ at US$118.8 million. EBITDA was US$238.1 million in H12016.

· Refined gold production in Q2 2016 increased by 2% QoQ to 213.1 thousand gold equivalent ounces ('koz'). H1 2016 gold output was 422.6 koz.

· All-in sustaining costs ('AISC') was US$878/oz in H1 2016 and US$930/oz in Q2 2016.

· Operating cash flow was US$80.2 million in Q2 2016 and US$160.7 million in H1 2016.

· Q2 2016 total debt down to US$905.3 million and net debtdown QoQ to US$562.5 million.

· Nordgoldreiterates its FY 2016 AISC guidance of US$800/oz - US$850/oz based on an expected stronger H2 2016 operational performance.

· Nordgold reduces 2016 full year production guidance to 880-930 from 950 - 1,010 koz due to lower than planned production in H1 2016 at our flagship Bissa and Berezitovy mines as well as anticipated suspension of production at Aprelkovo in H2 2016.

Highlights	Q2 2016	Q2 2015	Change, YoY	Q1 2016	Change, QoQ	H1 2016	H1 2015	Change, YoY
Gold production, koz	213.1	240.8	(12%)	209.5	2%	422.6	507.5	(17%)
Average realised gold price per ounce sold, US$/oz	1,265	1,200	5%	1,189	6%	1,227	1,205	2%
Revenue, US$m	269.9	289.0	(7%)	250.5	8%	520.4	640.3	(19%)
EBITDA, US$m	118.8	146.6	(19%)	119.3	0%	238.1	332.1	(28%)
Net profit, US$m	53.1	50.4	5%	41.1	29%	94.1	134.7	(30%)
AISC, US$/oz	930	769	21%	825	13%	878	722	22%
LTIFR	1.21	1.79	(32%)	1.49	(19%)	1.41	2.35	(40%)

Message from the CEO

'We delivered a solid financial performance in the second quarter, with net profit up sharply while we have also reduced our net debt. We have remained focused on increasing efficiency at our operational assets with the launch of our HiTeCC technology at Suzdal and pushing ahead with the development of our pipeline with the imminent launch of our Bouly mine in Q3 this year. While we have trimmed our full year production target after a lower than forecast first half, we still expect to achieve our AISC guidance of US$800/oz - US$850/oz. Nordgold is in a strong position to take advantage of improvements in market conditions with our portfolio of high-quality mines, a strong development pipeline of significant growth opportunities and a proven operational and financial track record. I am confident our company will continue to generate consistent growth for the benefit of its shareholders.'

Nikolai Zelenski, Chief Executive Officer, Nordgold

Operating Highlights

· Refined gold production in Q2 2016 increased by 2% QoQ to 213.1 koz. H1 2016 gold output was 422.6 koz.

· In Q2 2016, refined gold production increased QoQ at Taparko, Buryatzoloto, Neryungri and Aprelkovo mines and doré output grew at Bissa.

· Bouly construction is completed and the mine is currently in commissioning phase with the launch scheduled for Q3 2016. Bouly is expected to produce on average 120 koz per year for 10 years at AISC of US$730/oz.

· HiTeCC technology launch at Suzdal mine, expected to increase Suzdal production output by 9 -14 koz of gold doré per year for 10 years, or 90 -140 koz over the period.

· Gross development accelerated: construction commenced in early June 2016 with production expected to start in early 2018.

Financial Highlights

· Average realised gold price in Q2 2016 increased by 6% QoQ to US$1,265 per oz. In H1 2016, average realised gold price increased by 2% to US$1,227 per oz

· Revenue in Q2 2016 increased by 8% QoQ to US$269.9 million compared with US$250.5 million in Q1 2016. In H1 2016, revenue was US$520.4 million.

· EBITDA in Q2 2016 remained flat QoQ at US$118.8 million mainly due to higher sales volumes and increased gold price partially offset by higher costsand mining taxes as well as strengthened local currencies against the US dollar. In H1 2016, EBITDA decreased by 28% YoY to US$238.1 million due to lower sales volumes and higher costs.

· Net profit increased by 29% QoQ and 5% YoY to US$53.1 million in Q2 2016. Net profit for H1 2016 was US$94.1 million, down 30% YoY.

· Normalised net profit attributable to shareholders in Q2 2016 increased by 73% QoQ and 32% YoY to US$68.1 million. In H1 2016, normalised net profit attributable to shareholders decreased to US$107.5 million from US$132.1 million in H1 2015.

· In H1 2016, 3 089 057 of Detour shares were sold for US$58.6 million.

Focus on costs

· In H1 2016, AISC increased by 22% YoY to US$878/oz mainly due to higher total cash cost ('TCC') and increased capitalised stripping at West African mines and Berezitovy mine in Russiato facilitate pits cutbacks for future ore supply partially offset by significant cost reductions recorded at Suzdal (down 40%), Neryungri (down 14%) and Buryatzoloto (down 12%) mines.

· AISC increased by 13% QoQ and 21% YoY to US$930/oz in Q2 2016. QoQ AISC increase mainly related to higher maintenance and exploration capex in Q2 2016.

· In Q2 2016, TCC increased by 18% or by US$103/oz QoQ to US$682/oz mainly due to lower grade and higher stripping ratio, higher materials and spare parts consumption as well as third party services costs and strengthened local currencies, against the US dollar, partially offset by higher processing volumes, lower staff and general and administrative expenses ('G&A') expenses.

· In H1 2016, TCC was US$631/oz, a 13% increase over H1 2015. We continue to implement cost optimisation and operationalimprovement programmes at all our mines. We expect lower costs in H2 2016 based on a stronger H2 2016 operational performance.

Cash generation

· In Q2 2016, Nordgold generated US$80.2 million of cash flow from operating activities (after interest and income tax paid) compared with US$80.5 million in Q1 2016. In H1 2016, cash flow from operating activities was US$160.7 million, compared with US$252.1 million in H1 2015.

· H1 2016 capital expenditure ('capex') was on budget and increased by 49% YoY to US$159.9 millionas planned. We expect higher capex in H2 2016 mainly due to the acceleration of the Gross mine construction in Russia. Capex in Q2 2016 increased by 7% QoQ to US$82.7 million.

· In Q2 2016, Nordgold generated free cash flow of US$4.6 millionwhile investing in the construction of the new low-cost Bouly and Gross mines.In H1 2016, free cash flow was US$17.9 million.

· Cash and cash equivalents as at 30 June 2016 were US$342.8 million with net debt of US$562.5 million, compared with US$365.3 million cash and cash equivalents and net debt of US$588.2 million as at 31 March 2016.

Outlook

· Nordgold reduces 2016 full year production guidance to 880 - 930 koz from 950 - 1,010 koz due to lower than planned production in H1 2016 at our flagship Bissa and Berezitovymines, which is expected to continue in Q3 2016, as well as anticipated suspension of production at Aprelkovo in H2 2016.

· Nordgold will maintain its low-cost performance by continued focus on efficiencies. The Company reiterates its FY 2016 AISC guidance of US$800/oz - US$850/oz driven by an expected stronger H2 2016 operational performance.

· Nordgold reiterates FY 2016 capex of approximately US$370 million, including investments in construction of two mines, exploration, development and maintenance, as well as capitalised stripping.

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/3766I_-2016-8-30.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 Q2 and H1 2016 on a conference call to be held on 30 August 2016 at 3.00 pmLondon time (5.00 pmMoscow 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 Q2 and H1 2016Financial Results

To participate in the telephone conference, please dial:

Great Britain

[phone]

0808 238 1773

USA
[phone]

Russia
[phone]

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://event.onlineseminarsolutions.com/r.htm?e=1242916&s=1&k=EB5A260837D5DD1342F1F6841AAB5AFD

Materials

The Company's financial and operating results for the second quarter and six months ended 30 June 2016 and associated presentation materials will be available on the Company's official website:www.nordgold.comon 30 August 2016.

Enquiries

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.