Internationally diversified gold producer Nord Gold (Nordgold) produced 493 100 oz of gold equivalent in the six-month period ended June 30.

This makes the interim period marginally ahead of plan, albeit 3% lower year-on-year owing to planned production decreases at the Gross, Suzdal, Taparko and Lefa mines, offset by strong production performances at the Bissa-Bouly, Taborny and Irokinda mines. 

The Russia-based Gross mine’s expansion project continues to progress on time and on budget, Norgdold said on September 8, noting that the two-phase project will result in ore processing capacity increasing from the current level of 16-million tonnes a year to 18-million tonnes a year this year in the first stage and to 26-million tonnes a year in early 2024 in the second stage of development.

Work on the feasibility study for the second stage of expansion is on schedule and expected to be completed by the end of this year. The Gross mine is expected to achieve the 18-million-tonne-a-year ore processing rate from the third quarter of this year. 

Post-period end, during August, the Lefa team started mining operations at the new satellite Diguili deposit in the Republic of Guinea. The Diguili deposit was significantly expanded after a successful regional exploration programme. 

Overall, Nordgold said gold prices remain relatively resilient, albeit still volatile and below the recent highs of early June after bullish comments from the US Federal Reserve on the post-Covid recovery outlook.

The company delivered better than planned all-in sustaining costs of $1 049/oz for the first half of the year.

This was, however, only 2% higher on the same period last year owing to higher costs at the Gross, Suzdal, Bouly and Taparko mines, but partially offset by substantial cost improvements year-on-year at the Bissa and Taborny mines, mainly driven by head grade improvements, as well as planned lower sustaining capital expenditure at the Berezitovy, Bissa and Taborny mines year-on-year.

Adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) increased by 6% year-on-year to $458.9-million for the first half of 2021, and were driven by a more favourable gold price environment and margin improvement initiatives. 

Net profit increased by 9% year-on-year to $237.1-million for the period, and was mainly driven by top line growth.

Strong free cash flow generation was $179.5-million, 2% above the same period in 2020, and was driven by higher earnings which were partly offset by net working capital changes and higher income tax paid year-on-year.

Nordgold said its financial position remained strong, with net leverage close to zero at the end of the second quarter.

CEO Nikolai Zelenski commented that the company continued to consolidate its position in the Gross region, in Russia.

“Our two-phase Gross mine expansion project is progressing rapidly, with Phase 1 on track to be completed this year, and Phase 2 in early 2024. Together these will add about 130 000 oz/y to gold production by increasing ore processing capacity,” he said.

The Tokko project, which is adjacent to the Gross mine, also has the potential to become Nordgold’s third low-cost mine in the region, and the miner expects to complete the project feasibility study this year, with construction to start in 2022.

In addition to the Gross mine, Nordgold also owns and operates the Taborny, Berezitovy and Buryatzoloto mines, in Russia, as well as the Suzdal mine, in Kazakhstan.

Its operations in Africa include Lefa, in Guinea, and the Taparko, Bissa and Bouly mines, in Burkina Faso.