Diversified gold producer Nordgold reports that its adjusted earnings before interest, taxes, depreciation and amortisation increased by 52% year-on-year to a record $1.01-billion in 2020.
This performance was mainly the result of a more favourable gold price environment and a stable cash cost position.
The Covid-19 pandemic made gold’s relevance as a hedge more apparent, thereby supporting its price performance, with the average realised gold price having increased by 27% year-on-year in 2020, driving Nordgold’s revenue up.
Nordgold’s performance was also boosted by other factors including a gain on the sale of the Cardinal Resources shares owned by Nordgold to Shandong Gold, foreign exchange gains and a lower impairment loss than in 2019.
Excluding gains from the sale of Cardinal Resources shares, Nordgold’s free cash flow increased to a record $551.9-million in 2020, mainly a result of lower capital expenditures and higher operating cash flow with the Gross mine, in Russia, the main contributor.
The miner’s refined gold production of 1.045-million ounces of gold equivalent was marginally up on 2019, despite the challenges presented by the unprecedented global Covid-19 pandemic.
The strong production results were driven by the Gross, Taborny (Russia), Taparko (Burkina Faso), Irokinda (Russia) and Berezitovy (Russia) mines, more than offsetting lower production at other mines.
Meanwhile, the miner also managed to make significant progress in the development of the Gross mining district, with an ongoing realisation of $58-million expansion project to increase mining capacity to 18-million tonnes a year from the third quarter of this year.
In addition, the capacity of Taborny mine increased from 5-million tonnes a year to 7.5-million tonnes a year; while rapid development of the Tokko project with a positive preliminary economic assessment confirms a net present value of about $653-million.