JOHANNESBURG (miningweekly.com) - Diversified low-cost gold producer Nordgold’s net profit for the six months ended June 30 was down 30% year-on-year to $94.1-million, compared with the corresponding period in 2015, while half-year revenue decreased by 19% to $520.4-million for the year ended June 30.
This could be attributed to lower sales volumes and higher costs, as well as lower-than-planned production at the company’s flagship Bissa and Berezitovy mines in the period under review, which is expected to continue into the third quarter, along with the anticipated suspension of production at Aprelkovo in the second half of the year.
With this in mind, the company has lowered its 2016 full-year production guidance to between 880 000 oz and 930 000 oz from 950 000 oz to 1.01-million ounces.
CEO Nikolai Zelenski noted, however, that while Nordgold had trimmed its full-year production target after a lower-than-forecast first half, it still expected to achieve an all-in sustaining cost (AISC) guidance of between $800/oz and $850/oz.
Nordgold’s half-year earnings before interest, taxes, depreciation and amortisation decreased by 28% to $238.1-million, while gold output for the half-year was about 422 000 oz – a 17% reduction year-on-year.
The group’s average realised gold price in the first half of 2016 increased by 2% to $1 227/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," noted Zelenski.
The company reiterated its 2016 full-year capital expenditure of about $370-million, which will include investments in the construction of two mines, exploration costs, development and maintenance costs and capitalised stripping.
Meanwhile, Nordgold advised that construction on its Bouly mine, in Burkina Faso, had been completed and was currently in commissioning phase, with the launch scheduled for the third quarter of the year.
Bouly is expected to produce an average of 120 000 oz a year for ten years at an AISC of $730/oz.
The company also launched new HiTeCC technology at Suzdal mine, in Kazakhstan, which is expected to increase production output by between 9 000 oz and 14 000 oz of gold ore a year for the next ten years.