JOHANNESBURG (miningweekly.com) – Aim-listed gold miner Nordgold produced 225 100 gold-equivalent ounces in the first quarter of this year – a 6% year-on-year and 10% quarter-on-quarter decrease.

Revenue increased by 2% year-on-year to $300-million for the period, as a result of of the higher average realised gold price, but decreased by 6% quarter-on-quarter, owing to lower sales volumes.

Nordgold’s first-quarter earnings before taxes, depreciation and amortisation of $126-million were lower year-on-year and quarter-on-quarter as a result of higher costs.

Net profit for the period was $42.4-million and normalised net profit attributable to shareholders was $37.4-million.

Capital expenditure (capex) increased by 96% year-on-year to $121.3-million, as a result of the investments into the construction of the Gross mine, in Russia, and higher capitalised stripping.

All-in sustaining costs (AISC) were up by 19% year-on-year and 12% quarter-on-quarter to $1 001/oz in the first quarter, owing to the higher capex.

Nordgold CEO Nikolai Zelenski commented that, as expected, this has been a softer quarter for the company, as it is mining lower-grade blocks at its larger mines – in line with the mine plan – and continuing to invest in the construction of its next major project – the Gross mine.

“The Gross mine construction is on time and on budget. We expect to begin production later this year and for the mine to make a meaningful contribution to overall production in the second half of 2018.

“Our next major greenfield project, Montagne d’Or, in French Guiana, is also progressing well,” he noted.

Nordgold will apply for mining and construction approvals for the project this year.

“Montagne d’Or has the potential to be an outstanding asset and significant contributor for the French Guiana economy, both in terms of employment and taxes, as well as generating value for Nordgold shareholders,” said Zelenski.

The company’s production guidance for the full year is expected to be in the range of 950 000 oz to one-million ounces at an AISC of $900/oz to $950/oz.

Full year capex is anticipated to be about $390-million, including investments in the construction of the Gross mine, exploration, development and maintenance, as well as capitalised stripping.

Nordgold operates three mines in Africa, in addition to its operations in Russia and Kazakhstan.