HomeGoldNordgold to double reserves in next four years

Nordgold to double reserves in next four years

Severstal Steel “’
spinning off its Nord
Gold gold mining division
Moscow, Russia — 13 March 2012 – Nordgold NV “’ the Russian gold mining company spun off from OAO Severstal this year “’ plans to double reserves in the next four years, and is looking for emerging market acquisitions as it raises output worldwide.

Bloomberg News quotes CEO Nikolai Zelenski as saying the gold producer will invest US$800 Severstal’ million between now and 2015 to increase reserves from the current 8.2Moz by 60%.

“We don’t have an immediate goal to become a top-10 company, but we don’t rule out any large merger in the future,” Zelenski said in an interview here. “While existing reserves are sufficient to ensure future output, organic growth is only the base case,” he said.

About US$470 million of the company investments are planned for this year, mostly on construction at new mines and geological studies. Output is forecast to climb 13% to 850,000oz this year from 754,000oz last year.

“Nordgold will spend its own funds on capital expenditures during the next four years and doesn’t plan to raise debt beyond the US$400 million it owes Severstal,” Zelenski said.

“We’re in talks with Russian and international banks on refinancing this debt as soon as possible, and we think we will be able to get a lower rate than the 7 % we are now paying to Severstal,” he added.

“Nordgold will consider acquisitions from early Greenfield projects to producing assets,” Zelenski continued. “We are mostly interested in high quality deposits in emerging markets such as Africa, Russia, Latin America and South-east Asia,” he said. It is hard to find good assets in South Africa, the U.S. and Canada at attractive prices, he pointed out.

Source: Bloomberg News. For further details click here.