Nordgold invested $4.9 million in Berezitovy Rudnik in January-March

26 May 2016

Capital investments of Berezitovy Rudnik LLC (part of Nordgold) amounted to 4.9 million dollars in the first quarter of 2016 which is 63% more than in the same period last year, the company’s press-service reports. Funds are invested in maintenance of production facilities, in exploration and estimation. In particular, the company carries out a complex of design works for the justification of underground mining at the site of 168 thousand ounces (5.2 tons) of gold inferred resources. The program on geological prospecting work has been developed to increase them. The results of it, as well as a feasibility study for underground mining will be submitted to the regulatory authorities this year to process the necessary permits to begin construction of a runaway in 2017. Geological prospecting work at Khayktinskiy area located to the North of the Berezitovy mine is also scheduled for 2016. “In case of promising results, the initial drilling program can also be schedules. It is expected that the field investigation by geologists will begin in June according to the weather conditions,” press release says. During the first quarter of 2016, Berezitovy Rudnik has produced 22.3 thousand ounces (694 kg) of gold, which is 37% lower than a year earlier. “This is a planned decrease in the production process,” explains Marsel Gazizov, company Executive Director, “We were ready to such operating results. The fact is that in the running processing ore with low content of gold from the warehouses, following the completion of mining ore from phase 1 of the quarry. We were ready to such operating results. The thing is that following the completion of mining ore from the first phase of the quarry, ore with low content of gold from the warehouses was under processing. The average gold content in the processed ore decreased to 1.84 g/t, despite the fact that, for example, in the fourth quarter of 2015, the gold content was 2.19 g/t. The gold content is expected to grow in the second half of this year due to the mining of final ore reserves of the first phase of the quarry, which should give a large volume of ore with high gold content.”

The company's revenue from gold sales for January-March amounted to 26.2 million dollars (1.9-fold reduction), on average, Berezitovy received $ 1178 per ounce of gold. At that, the cost of gold production with capital expenses has increased compared to the same period last year by 9.5% to 614 dollars/ounce. EBITDA profitability increased to 64.4% compared with 61.1% for the same period in 2015. Berezitovy Rudnik LLC develops a gold and complex deposit under the same name in Tyndinsky district of Amur Region. Owned by Alexey Mordashov, Nordgold has reduced the total production of gold in Russia and abroad by 21% compared to the same period a year earlier to 209.5 thousand ounces (6.5 tons), according to the results of the first quarter of 2016.

Sourсe: Gold Mining Manufacturers' Reporter