Diversified gold producer Nordgold achieved a 67% year-on-year increase in adjusted earnings before interest, taxes, depreciation and amortisation to $433.2-million for the first half of this year.

The improvement was driven by a more favourable gold price environment, as well as higher production and lower costs.

Nordgold, which operates mines in Russia, Kazakhstan, Guinea and Burkina Faso, states that the Covid-19 pandemic has made gold’s relevance as a hedge more apparent, supporting its price performance.

The average realised gold price tracked market dynamics and increased by 27% year-on-year, resulting in an increase in revenue of $179.2-million.

Higher production contributed an additional $43.5-million to revenue growth for the period under review.

The miner also reports that its net profit increased to $218.2-million, mainly owing to higher revenue and a lower impairment loss compared with the first half of 2019.

Nordgold’s free cash flow increased to $177.5-million, from $6.4-million in the prior comparable period, mainly as a result of lower capital expenditure and higher operating cash flow, with the Gross mine being the main contributor.

The miner’s refined gold production increased by 8% year-on-year, to 507 300 oz, mainly driven by strong operating performances at the Gross, Taparko, Irokinda, Berezitovy and Suzdal mines.

Nordgold says the higher production more than offset lower production at Bissa and Bouly.

The Gross mine increased production by 26% to 130 500 oz in the first half, mainly driven by higher ore processed volumes and recovery rates.

Taparko almost doubled gold production during the period, mainly owing to 2019 investment in 35-5 pit cut-back development, and subsequent completion of waste stripping, resulting in access to higher-grade ore, and additional oxide ore mined from the Goengo pits for optimal blending in processing.

At the Suzdal mine, gold production increased by 15% year-on-year, driven by an improved performance across the main production stages, including higher ore processed volumes, grade and recovery.

Production at Bissa, however, decreased mainly as a result of lower production in the first quarter as ore mined at lower-grade pits was processed until mining commenced at the higher-grade Samtenga pit. In the second quarter, Bissa increased production by 40% quarter-on-quarter, driven by higher grade and ore processed volumes.

The Bouly mine’s production decreased in the first half, mainly as a result of lower heap leach stacking volumes related mainly to repairs of conveyor belts and agglomerator equipment.

In the second quarter, total gold output increased by 25% quarter-on-quarter as the group’s nine mines increased production, except for the Berezitovy mine, where lower volumes of ore processed caused a slight quarter-on-quarter production decrease.

All-in sustaining costs decreased by 4% year-on-year, to $1 028/oz, mainly attributable to higher gold production from the Gross mine, as well as lower costs at the Taparko, Lefa, Buryatzoloto and Suzdal mines.

Meanwhile, Nordgold also reports that it opened its unconditional on-market cash offer to acquire all of the ordinary shares in Cardinal Resources that it does not already own on July 30.

Nordgold’s offer, which has already received all required regulatory approvals including in both Australia and Ghana will remain open until the close of trading on September 10, unless further extended or withdrawn in accordance with the Corporations Act.

During the first six months of the year, Nordgold was also affected by the Covid-19 pandemic with operations at the Bissa-Bouly and Irokinda processing plants being temporarily suspended.

The Bissa plant was shut down for three days, while the Bouly plant lost nine days and the Irokinda plant seven days. The other seven Nordgold mines operated without interruptions during the first half.

Nordgold CEO Nikolai Zelenski says the miner’s performance is testament not only to the quality of its assets, but . . . the huge efforts of its people around the world, who have adapted with speed and diligence to a new working environment and the associated changes it has implemented.

“Our Gross mine continues to exceed expectations and perform on a world class level and is our largest and most efficient asset. We also had a very strong performance at the Taparko mine where production doubled over the period,” he says.