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Severstal's Gold Unit Ebitda Margin Slips On Lower Grades, Inflation
Ð?АÐ? Severstal (RTS:CHMF)
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Today : Wednesday 31 August 2011


Nord Gold NV (NORD.LN), the gold-mining unit of Russian billionaire Alexei Mordashov's steelmaker OAO Severstal (CHMF.RS), said Tuesday its margins slipped in the second quarter on lower grades and inflation pressure.
However, the company said it saw an improvement in the second half on the growth in the gold price.
Severstal publishes detailed financials of its gold division separately from its own results. Nord Gold postponed its initial public offering at the London Stock Exchange in February citing poor market conditions, but Severstal didn't rule out it could come back to the idea.
"Our Ebitda margins remain high despite being impacted by lower head grades and recoveries at some of the mines, foreign exchange and inflation pressure and the cost of two major maintenance repairs at the Lefa mine," Nord Gold's Chief Executive Nikolai Zelenski said.
Nord Gold's second-quarter margin on earnings before interest, tax, depreciation and amortization was at 44.5%, down from 54% a year earlier. The miner's total cash cost per metric ton shot up to $719 in the second quarter from $467 a year earlier.
Nord Gold's second-quarter net profit was at $45.4 million, up 74% on year. Revenue stood at $299.4, up 81% on year. Ebitda was at $133.4 million, up 50%.
Nord Gold, which mines gold in Russia, Kazakhstan, Burkina Faso and Guinea, produced 372,285 troy ounces in the first half of the year, a 51% increase from a year earlier. The company said it was still on track to produce between 800,000 and 840,000 troy ounces in 2011.
-By Nadia Popova, Dow Jones Newswires; [phone], [e-mail]

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