Nord Gold : Nordgold Announces Intention to De-list GDRs

Nordgold Announces Intention to De-list GDRs

· Intention to de-list follows a Board review of the appropriate capital structure of the business

· The Board believes the current equity market capitalisation fails to value Nordgold appropriately, making a premium listing and subsequent equity placing prohibitively dilutive for current shareholders

· Nordgold will continue to implement its international development programme, before a potential return to the public markets in the future as a larger gold producer, subject to market conditions

· GDR holders will be given a choice to exit or stay as shareholders of the Company

· Nordgold will continue to act as a public company committed to high standards of corporate governance, and intends to continue making on-going quarterly operational & financial updates

London, United Kingdom, 9 February 2017- Nord Gold SE ('Nordgold' or the 'Company', LSE: NORD) today announces its intention to cancel the listing of its Global Depositary Receipts ('GDRs') from the official list and from trading on the London Stock Exchange ('LSE') in accordance with Listing Rule 5.2.8.

Nordgold has for some time been examining a number of options to increase its market capitalisation, including as its preferred course of action a premium listing through an equity placing to enhance its free float and liquidity.

During that time, Nordgold has built a track record of strong financial and operational performance, while investing in a major programme of international development and other growth opportunities. It has in the past four years alone launched two separate large scale and highly efficient mining projects - the Bissa and Bouly mines in Burkina Faso - while steadily advancing a series of other exciting projects in Russia, French Guiana and Canada. It has also increased production from 589 thousand ounces ('koz') in 2010 to 869 koz in 2016. Production is expected to be in the range of 900 - 950 koz at all-in sustaining costs of US$900-950 per ounce in 2017.

Nordgold anticipates strong financial results in 2016, including EBITDA of approximately US$490 million and operating cash flow in the range of US$390-395 million. The Company has met its target to achieve positive free cash flow at all its assets. As a result, Nordgold expects significant free cash flow generation of over US$60 million in 2016 despite investments of c. US$120 million in the construction of the new low-cost Bouly and Gross mines during the year. Total capex is anticipated to be approximately US$350 million in 2016 and US$390 million in 2017.

Nordgold has also used its time as a public company to establish itself as a consistent dividend payer. In November 2013 the Board approved a new dividend policy designed to deliver more frequent dividend payments to shareholders. As a result, the interim quarterly dividend and the targeted payout ratio of 30% of normalised net profit attributable to shareholders were introduced. The Company's dividend payments increased from US$24.3 million in 2013 to US$58.5 million in 2015. Nordgold has paid US$47.9 million in dividends for the first nine months of 2016 while dividends for the fourth quarter of 2016 will be declared later in February 2017 and paid in March 2017.

Despite this strong operating and financial performance and a proven ability to deliver returns to shareholders, enhanced by an extensive GDR buyback programme conducted by Nordgold in 2015 and 2016, the market capitalisation of the Company has failed to increase in line with the market, and in particular against its peers, during a period of a major gold price rally. As a result, the Board believes the market capitalisation does not accurately reflect the true value of Nordgold. The Directors believe that the principal reason for this undervaluation is the very low trading volumes and general lack of liquidity in the GDRs, caused by the Company's capital structure, and that any changes in its performance are unlikely to overcome this structural disadvantage.

The Board's decision to de-list comes having carefully considered these facts and that an equity placing, even at the current price, would result in the unacceptable dilution of current shareholders. The Board has agreed a key objective for the de-listing is therefore to eliminate the current public market value benchmark, which it believes does not fully reflect the fundamental value of the Company and to consider re-listing in the future, subject to market conditions.

Tender Offer

While the de-listing does not require shareholder approval, in keeping with its strong commitment to good corporate governance and fair treatment of minorities, the Company is proposing a plan for de-listing that will enable minority shareholders to choose whether to exit prior to de-listing or to retain their investment in Nordgold after de-listing. To effect this, the Board has agreed to make a tender offer that will provide the Company's minority shareholders the ability to choose, at their discretion between:

i. tendering their GDRs to Nordgold at US$3.45 per GDR (representing the 5-day VWAP for the 5 trading days preceding this announcement) at any point from 9 February 2017until 12.01 am on 16 March 2017 (being five trading days after the anticipated date of the De-listing) (the 'GDR Tender Offer'); or

ii. remaining a member of the de-listed Company and:

a. receiving the benefit of its consistent returns in the form of dividends, as well as the benefit of any potential re-listing of the Company that might occur in future, which the Board believes will value the Company more accurately, and:

b. have the additional protection of the right to tender their shares back to Nordgoldat US$3.45 per share (representing the 5-day VWAP for the 5 trading days preceding this announcement) on four occasions following the de-listing: after the announcement by the Company of its financial results for each of the half years ended 30 June 2017 and 2018 and for each of the full years ended 31 December 2017 and 2018 (the 'Share Tender Offers').

The GDR Tender Offer is expected to close on 16 March 2017, following which the Company will acquire and then immediately surrender the GDRs to the depositary in return for the underlying ordinary shares which will then be cancelled. The timetable for each Share Tender Offer will be announced by the Company in advance of the Share Tender Offer.

Q4 2016 Dividends

The record date for the fourth quarter 2016 dividend payment is set at 2 March 2017. All GDR holders registered on the record date will be entitled to receive the dividend, irrespective of whether they subsequently tender their GDRs in the Tender Offer or not, ensuring the fair treatment of all holders.

Strategy

The decision to de-list does not represent a change in strategy, management or direction for the Company, nor its commitment to deliver value for shareholders. Nordgold will remain absolutely focused on the safe, efficient performance of its current assets, while continuing the development of its international development pipeline, starting with the forecast launch of the Gross mine in Russia in 2018, which will make Nordgold a larger gold producer.

After de-listing, Nordgold intends to continue paying dividends to shareholders. In line with Nordgold dividend policy, the Company intends to distribute 30% of normalised net profit attributable to shareholders as dividends on a quarterly basis.

Nordgold will also maintain its commitment to a high standard of corporate governance and will retain its existing governance structure, meaning an independent international Board chaired by David Morgan will be overseeing the decisions made by the management team, led by Chief Executive Officer Nikolai Zelenski. It intends to remain focused on building strong relationships with investors and broader international investment community. It will continue to publish annual reports and provide updates on its performance to the market, in the form of quarterly combined operating and financial results.

The listing of the Company's bonds will be unaffected by this decision.

David Morgan, Chairman of Nordgold commented:

'We have made significant progress in building a strong track record and have generated considerable goodwill amongst the international investment community. We have successfully positioned Nordgold as a truly international, consistent, pure play gold producer with a proven record of delivery and an extensive pipeline for further growth. However, despite this strong performance, our commitment to good corporate governance and what we believe is a very strong reputation in the investment community, the fact is our GDRs have never reflected the true value of the business. As a result, a premium listing at current market values would be highly dilutive to current investors and therefore not in the interests of all shareholders. A period away from the public markets will enable us to both progress our development pipeline and de-couple from a deep discount on the public markets. We expect to return to the public markets in the coming years as a larger, more profitable business and one which we believe will be better suited to a listing.'

General Meeting

Following the GDR Tender Offer close on 16 March 2017 the Company will acquire and then immediately surrender the acquired GDRs to the depositary in return for the underlying ordinary shares. The receipt by the Company of the underlying ordinary shares will constitute an off-market purchase of ordinary shares under the UK Companies Act 2006 and will require shareholder approval. The Company will seek the necessary shareholder approval (the 'Resolution') at a general meeting, which will be held at the Fetcham Park House, Lower Road, Fetcham, Leatherhead, Surrey KT22 9HD on Monday, 27 February 2017 at 10 am GMT (the 'General Meeting').

Each Share Tender Offer is also conditional upon the passing of a shareholder resolution at the relevant time.

The Board considers the De-listing and the Resolution to be in the best interests of the Company and its shareholders as a whole and the Board unanimously recommends that shareholders vote in favour of the Resolution to be proposed at the General Meeting.

Ocean Management Sarl, the majority shareholder of Nordgold beneficially owned by Mr Mordashov, with an aggregate stake of 90.73 per cent in the Company, has undertaken not to tender any securities in the tender offer. In addition, Ocean Management Sarl has undertaken to vote in favour of the Resolution and in favour of all future shareholder resolution required for the Share Tender Offers.

Detailed information on the de-listing, the Resolution and the tender offer can be found in the shareholder circular dated today. The notice of General Meeting and related documents (including proxy forms) are now available on the Company's website atwww.nordgold.com.

Nordgold has submitted the shareholder circularand proxy forms to the UK National Storage Mechanism.

It is expected that trading in the GDRs on the main market will cease at the close of business on 8 March 2017 and the cancellation of admission of the GDRs to the official list will take effect from 8.00 am GMT on 9 March 2017. In parallel, the GDR Tender Offer at a price of US$3.45 per GDR will be open from 9 February 2017until 12.01 am on 16 March 2017.

Citigroup Global Markets Limited acted as a financial advisor to Nordgold.

Termination of GDR Programme

Shortly following the de-listing Nordgold intends to terminate its GDR programme. Minority shareholders who elect to retain ordinary shares in the Company following the de-listing should present their GDRs to the Depositary for cancellation prior to the GDR termination date (currently expected on 21 March 2017). Details of the process to be followed by such shareholders are set out in the deposit agreements. GDR holders should be aware of the consequences of not tendering their GDRs for cancellation, which are set out in detail in the shareholder circular.

Issued capital

At the day of this notice, the Company has an issued capital of EUR 370,396,229, consisting of 370,396,229 Ordinary Shares. GDRs have been issued by the Depositary representing 51,336,304 Ordinary Shares, of which 17,006,851 are held by the majority shareholder of Nordgold. Consequentially, the total number of GDRs and/or Ordinary Shares that may be tendered in the tender offer is 34,329,453, representing 9.27% of the Company's issued Ordinary Share capital as at the date of this document.

Telephone Conference and Q&A Session

A conference call and webcast for investors and analysts will be held today at 12.30 pm GMT (3.30 pmMoscow time). The presentation will be followed by a Q&A session. To participate in the telephone conference, please register in advance.

Great Britain

[phone]

0808 238 1775

USA
[phone]

Russia
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Webcast

The presentation will be broadcast live over the Internet and will also be available as a recording after the conference.

To participate in the webcast please follow the link:

http://event.onlineseminarsolutions.com/r.htm?e=1364519&s=1&k=49DE14D17C27880FA52D9760E351E27C

About Nordgold

Nordgold (LSE: NORD) is an internationally diversified gold producer established in 2007 and publicly traded on the London Stock Exchange. Nordgold has a proven track record of operational excellence and benefits from a significant international development pipeline. The Company is relentlessly focused on shareholder value, committed to running safe, efficient, profitable operations, which enable it to generate strong cashflows and in turn, continue to invest in its pipeline of new growth opportunities while generating returns for investors. In 2016, Nordgold produced 869 koz of gold.

Nordgold operates 9 mines (4 in Russia, 3 in Burkina Faso and one each in Guinea and Kazakhstan). It has one project in construction phase (Gross in Russia), several prospective projects in feasibility study, preliminary economic assessment and advanced exploration phase and a diverse portfolio of early-stage exploration projects and licences in Burkina Faso, Russia, French Guiana and Canada. Nordgold employs over 8,000 people.

For further information on Nordgold please visit the Company's website: www.nordgold.com

Enquiries

Cautionary Note Regarding Forward-Looking Statements

The accompanying document has been prepared by Nord Gold SE, a company existing under the laws of the United Kingdom (the 'Company' or 'Nordgold' and, together with its subsidiaries, the 'Group'), and is for informational purposes only. While information in this document is obtained from sources believed by the Company to be reliable, the Company has not undertaken an independent verification of such information, and no assurance can be provided as to the accuracy or completeness of any such information.

Certain statements in this document are not historical facts and constitute 'forward-looking' statements regarding future events or the future financial performance of the Group, including within the meaning of Section 27A of the United States Securities Act of 1933, as amended and Section 21E of the United States Securities Exchange Act of 1934, as amended. Such forward looking statements may be identified by terms such as 'expect', 'believe', 'estimate', 'anticipate', 'intend', 'will', 'could', 'may', or 'might', the negative of such terms or other similar expressions. These forward-looking statements include matters that are not historical facts and statements regarding the Group's intentions, beliefs or current expectations concerning, among other things, the Group's results of operations, financial condition, liquidity, prospects, growth, strategies, and the industry in which the Group operates. By their nature, forward-looking statements involve risks and uncertainties, because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance, and the Groups' actual results of operations, financial condition, liquidity, prospects, growth, strategies and the development of the industry in which the Group operates may differ materially from those described in or suggested by the forward-looking statements contained in these materials. In addition, even if the Group's results of operations, financial condition, liquidity, prospects, growth, strategies and the development of the industry in which the Group operates are consistent with the forward-looking statements contained in these materials, those results or developments may not be indicative of results or developments in future periods. Any such statements speak as of the date on which they are made, and the Company does not undertake any obligation to update any such statements to reflect information, events, results or circumstances after the date on which it is made or to reflect the occurrence of unanticipated events, except as may be required by applicable law. Many factors could cause the actual results to differ materially from those contained in forward-looking statements of the Company, including, among others, general economic conditions, the competitive environment, risks associated with operating in the states where the Group operates, changes in the world gold market, as well as many other risks specifically related to the Group and its operations. Many of these assumptions are based on factors and events that are not within the control of Nordgold and there is no assurance that they will prove correct. New risks and uncertainties emerge from time to time, and it is not possible for management to predict all of such risk factors and to assess in advance the impact of each such factor on Nordgold's business or the extent to which any factor, or combination of factors, may cause actual realities to differ materially from those contained in any forward-looking information. Actual performance or achievement could differ materially from that expressed in, or implied by, any forward-looking information in this document and, accordingly, investors should not place undue reliance on any such forward-looking information.

The information in these materials is provided as at the date hereof, and is subject to verification, completion and change. Accordingly, no representation or warranty, express or implied, is made or given by or on behalf of the Company or any of its shareholders, directors, officers or employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in these materials, and no reliance may be placed for any purposes whatsoever on the information contained in this presentation or on its completeness, accuracy or fairness. None of the Company or any of its shareholders, directors, officers or any other person accepts any liability whatsoever for any loss howsoever arising from any use of the contents of these materials or otherwise arising in connection therewith.