1 Nordgold: Montagne d’Or Project Update Igor Klimanov, Development Projects Director April 14, 2016 2 2 Why Guiana Shield 3 3 French Guiana • Part of France, the European Union and euro zone, home of European space center at Kourou • Population 250,000, of which ~50% live in Cayenne • One of the most biodiverse places in the world, most of the country is covered by Amazon rain forest • Hot and humid tropical climate, up to 3,800 mm rain per year • Long history of alluvial gold mining • A number of small scale legal mining companies • French Guiana (“FG”) is the world leader in terms of gold production per capita • Most infrastructure is located along Atlantic ocean, limited infrastructure inland • FG electricity consumption is only 150-170 MW, of which 110-120 MW is supplied by single water dam • Fertility rate (3.5), much higher than in mainland France (2.0), which creates need for more education, jobs and further infrastructure development, similar to Africa • FG receives substantial subsidies from mainland France • While FG has some autonomy, many important decisions, such as mine permitting are made by government in Paris • Currently there is no industrial scale mining in France except for nickel mines in New Caledonia 4 4 Mining Land Zoning BRAZ I L A T L A N T I C O C E A N S U R I N A M E Macouria Cayenne Kaw Ouanary Cacao Kayodé Kayodé Kayodé Kayodé Kayodé Kayodé Kayodé Kayodé Kayodé Saül Saint Elie Montsinéry T. Grand Santi Mofina Antécum Pata Twenké Elaé Maripa Soula Loka Papaïchton Iracoubo Organabo Kourou Apatou Manyan St Laurent Saint Jean Sinnamary Awala Y. Javouhey Mana Trois Sauts Roura Régina Camopi St Georges Matoury Rémire Montjoly 45 kilometres Mining Land Zoning Mining Activity is Authorized Mining Activity is Banned Except for Underground Mining and Airborne Surveys Mining Activity is Banned Project Boundary Main Roads Departmental Roads Main Hydrographic Network Communal Limits Administrative Centres Main Villages NB: The protected areas covering the towns along the Maroni and the inselbergs to protect are not included on this map • 2012: legislation defining zones where mining is authorized • Montagne d’Or deposit is located in the permitted open-pit mining area 5 5 Montagne D’or Project Overview • Gold project in French Guiana • Jointly developed by Columbus Gold and Nordgold • Historic production since 1875 (estimated 2 Moz) • NI 43-101 resources 3.8 Moz at 2.14 g/t (SRK, April 2015), including: – 2.9 Moz at 2.15 g/t Indicated – 0.9 Moz at 2.11 g/t Inferred – Pit constrained at US$1,300/oz, 1.0 g/t cut-off grade • Project infrastructure: – Exploration camp (Camp Citron), incl. diesel generated electricity and internet – All-season road for heavy vehicles – Air strip for light airplanes • Mostly sulphide ore, minor copper and silver • The deposit is located on the slope of the mountain • Environmentally sensitive area, where significant damage has already been caused by illegal mining. Best available technologies will be used to minimize impact • 2014-2015 exploration and development expenditures of US$18.7 million, excluding US$4.2 million cash consideration • 2016 budget of US$8 million 6 6 Project Timeline 2014 2015 2016 2017 2018 2019 2020 Feasibility Study Environmental Study by Lycopodium (and SRK) by WSP (and Geo+, Biotope, etc.) Resource update and PEA by SRK Permitting Mine Construction 7 7 Drilling Highlights • Drilling confirms rich and consistent ore body 8 8 Current Resource Estimate (SRK, April 2015) • The resources are comprised of Indicated (77%) and Inferred (23%) resources • The resources are pit constrained assuming US$1,300/oz gold price Cut-off, g/t Grade, g/t Tonnage Gold, Ozs 0 0,28 604 913 357 5 181 718 0,05 0,94 176 359 633 5 152 879 0,1 1,12 145 930 904 5 082 027 0,15 1,26 127 945 905 5 017 646 0,2 1,35 117 876 628 4 960 563 0,25 1,40 113 060 220 4 926 920 0,3 1,43 110 370 710 4 905 980 0,35 1,45 108 223 671 4 884 708 0,4 1,48 105 609 432 4 852 244 0,45 1,51 102 146 012 4 807 661 0,5 1,55 98 355 850 4 751 819 0,55 1,60 94 148 268 4 683 442 0,6 1,65 89 895 896 4 606 316 0,65 1,70 85 302 458 4 517 086 0,7 1,76 80 787 678 4 421 451 0,75 1,82 76 330 201 4 320 154 0,8 1,88 72 052 250 4 217 181 0,85 1,94 67 957 162 4 112 974 0,9 2,01 63 961 616 4 004 639 0,95 2,07 60 433 559 3 902 343 1 2,14 57 095 322 3 800 607 • Existence of high grade zones allows mining at various price of gold scenarios 9 9 Block Model Long Section 10 10 Block Model Cross Section 11 11 Exploration Upside • The deposit can grow on strike as follows: – The gold anomaly that hosts the deposit continues east and west for a total of 5km – The IP anomaly that hosts the deposit continues east and west for a total of 1.7km – The favourable geology continues east and west for a total of 2.5 km Hole 48 (700 m from the deposit) 3.5m of 31.94g/t, and 8.8m of 1.16g/t 12 12 Exploration Upside (cont’d) • The deposit can also grow at depth below 200 meters: 13 13 Metallurgical summary • Metallurgical tests proved excellent ore characteristics including very high recovery and low energy requirement • Large-scale gravity + rougher flotation testing on master composite resulted in a combined gold recovery of 96% • Gravity + cyanidation gold recovery on ten variability test composites varied from 93.5% to 97.3%, and averaged 95.8% including 33% gravity recoverable gold • Bond ball mill work index testing of the UFZ and LFZ variability composites confirmed the moderate hardness of the Montagne d'Or rock. The lower than expected hardness has a significant impact on reducing the energy needs for the project Results of comminution tests on master composites: • SG 2.85-2.94 t/m3 Ai 0.09-0.1 • Dwi 7.7-8.8 kWh/m3 Mia 20-22 kWh/t • Bwi 10-12 kWh/t Results of Bond Ball Work Index Variability Tests Results of Cyanidation Variability Tests 14 14 PEA Results Preliminary Economic Assessment (PEA) completed by SRK in July 2015 LoM annual throughput of 4.5 Mtpa, average grade 2.0 g/t in years 1-10 Strip ratio of 5 t/t, metallurgical recovery of 94% LoM total production of 3.05 Moz, LoM annual production of 273 koz in years 1-10 LoM AISC at US$711 per oz Preliminary capex estimate of US$366 million After-tax NPV of US$324 million at 8% discount rate IRR of 23% at a gold price of US$1,200 per oz PEA upside: “tax credit” (capex can be partially reimbursed by the state) and connection to the national grid may significantly improve the project’s economics and will be studied in detail in FS 15 15 Progress Made – Last Twelve Months Preliminary Economic Assessment was completed in July 2015. PEA results were presented to the Minister of Economy and regional stakeholders in August 2015 Feasibility drilling started in August 2015 . The target was to partially convert Indicated resources to Measured, conduct geotechnical and hydrogeological drilling Preliminary Environmental and Social Impact Assessment (ESIA) was completed in Q1 2015 , results were presented to the environmental authority in October 2015. Lycopodium was selected to conduct the definitive Feasibility study. SRK retained as subcontractor, which provides continuity from PEA stage. Study kick-off took place in October 2015 French engineering company Tractebel (part of Engie group, formerly GDF-Suez) selected in December 2015 to conduct PFS and FS of the high voltage (HV) transmission line construction, which will be connected to the national power grid Nordgold became project operator in January 2016 . Columbus Gold remains project shareholder Montagne d’Or power needs (20 MW) were introduced in the mid -term energy balance planning of French Guiana. The document is expected to be approved by the government in Paris in H2 2016 FS drilling was completed in March 2016 The draft PFS for the HV powerline PFS has been received. Significant capex reduction expected By the end of Q1 2016, Nordgold has invested US$23 million in the project 16 16 2016 Plan • Update resource estimate, convert starter pit resources to measured in Q2 • Continue stakeholder engagement activities, start implementation of education and training initiatives • Complete Feasibility Study (FS) in Q4 2016 • Complete ESIA in Q4 2016 • Get State / EDF commitment for the grid connection to reduce environmental impact and further improve project economics • Prepare various permitting applications (construction permit, ICPE, AOTM) based on FS and ESIA to be filed in early 2017 • Get 55% formal ownership of the project by delivering FS and spending US$30 million in total 17 17 Mine Layout Scheme Waste dump Tailing storage facility Mixed use stockpile • Mine layout scheme has been developed as a part of feasibility study • The mine is designed to minimise environmental impact Overflow ore stockpiles Pit Plant 18 18 Project Summary World-class high-grade ore body: 3.8 Moz at 2.14 g/t of in-pit Indicated and Inferred Resources Low stripping ratio Straightforward metallurgy: gravity + cyanidation. Excellent recovery in tests averaged at above 95% Easy access to the project site with all-season road in place Located in politically stable and low-risk jurisdiction Preliminary economic assessment shows robust project economics Significant reserve upside potential at strike and in depth Guiana Shield is a promising geological region Appendix 20 20 Montagne d’Or Ownership • The project is currently 100% owned by Columbus Gold, who was the project operator prior to January 2016 • On March 13, 2014, Nordgold signed a definitive agreement with Columbus. The agreement provides an option for Nordgold to earn 50,01% in the project if certain conditions are met: – Nordgold has to complete BFS by no later than March 13, 2017 (unless force majeure extends the deadline) – Nordgold has to spend at least US$30 m on the project during three years • In January 2016, an additional agreement was signed that increases future ownership to 55.01% and gave Nordgold project operator status starting from January 2016