NORD GOLD CPR Report on the Assets of Nord Gold for Burkina Faso, Guinea, Kazakhstan and the Russian Federation
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NORD GOLD CPR Report on the Assets of Nord Gold for Burkina Faso, Guinea, Kazakhstan and the Russian Federation January 2011 Wardell Armstrong International Wheal Jane, Baldhu, Truro, Cornwall, TR3 6EH, United Kingdom Telephone: +44 (0)1872 560738 Fax: +44 (0)1872 561079 www.wardell-armstrong.com 27 January 2011 The Directors Nord Gold N.V Strawinskylaan 3105, 1077 ZX Amsterdam, The Netherlands Dear Sirs Nord Gold N.V. – Competent Person’s Report Background Nord Gold N.V. (the “Client” or “Nord Gold”) commissioned Wardell Armstrong International Ltd ("WAI") to prepare a Competent Person’s Report (the “CPR”) on its gold mining, development and exploration assets. WAI understands that the CPR will be included as part of a prospectus (the "Prospectus”) to be published in connection with a proposed offering of ordinary shares by Nord Gold to be admitted to the premium listing segment of the Official List of the United Kingdom Financial Services Authority and to trading on the main market for listed securities of the London Stock Exchange Main Listing (together, “Admission”). WAI hereby consents to the inclusion of this letter and the CPR in the Prospectus, with the inclusion of its name, in the form and context in which it appears in the Prospectus, to be published in connection with Admission. For the purposes of Item 1.1 and 23.1 of Annex I and Item 1.1 and 10.3 of Annex III to Commission Regulation (EC) No. 809/2004 of 29 April 2004 (the “Prospectus Directive Regulation”) WAI is responsible for this letter and the CPR as part of the Prospectus and declares that it has taken all reasonable care to ensure that the information contained in this letter and the CPR is, to the best of its knowledge, in accordance with the facts and contains no omission likely to affect its import. This declaration is included in the Prospectus in accordance with Item 1.2 of Annex 1 and 1.2 of Annex III to the Prospectus Directive Regulation. The principal Mineral Assets in which the Client is interested comprise Taparko, Bissa and other exploration assets in Burkina Faso, Lefa in Guinea, Suzdal, Zherek and Balazhal in Kazakhstan, and Berezitovy, Irokinda, Zun-Holba,Tabornoe,Aprelkovo,Gross,Prognoz,Nercha,andUryakhinRussia. In the CPR “Aprelkovo” means “Pogromnoe occurrence”, “Irokinda” means “Irokindinskoe gold deposit”, “Zun- Holba” means “Zun-Holbinskoe gold deposit”, “Nercha” means “Nerchinskaya perspective field”, “Berezitovy” means “Berezitovoe deposit”, “Suzdal” means “Suzdalskoe gold deposit”. These projects are at various stages of exploration and development, all of which are discussed in detail in the CPR. WAI considers that the relevant areas have sufficient technical merit to justify proposed programmes and associated expenditures. ENERGY AND CLIMATE CHANGE ENVIRONMENT AND SUSTAINABILITY Wardell Armstrong International is the trading name of Wardell Armstrong International Limited, INFRASTRUCTURE AND UTILITIES Registered in England No. 3813172 LAND AND PROPERTY Registered office: Sir Henry Doulton House, Forge Lane, Etruria, Stoke-on-Trent, ST1 5BD, United Kingdom MINING, QUARRYING AND MINERAL ESTATES UK Offices: Stoke-on-Trent, Cardiff, Edinburgh, Greater Manchester, Liverpool, London, Newcastle upon Tyne, Sheffield, Truro, West Bromwich. International Offices: Almaty, Beijing WASTE RESOURCE MANAGEMENT The Prospectus contains an appropriate summary of each of the assets, and WAI is satisfied with the integrity of the information contained in the Prospectus based on the limited validation work performed by WAI, but more importantly, reliance on the legal due diligence performed by Nord Gold and its subsidiaries in the projects geographical locations. For the purposes of Item 1.1 and 23.1 of Annex I and Item 1.1 and 10.3 of Annex III to Commission Regulation (EC) No. 809/2004 of 29 April 2004 (the “Prospectus Directive Regulation”) WAI is responsible for this letter and the CPR as part of the Prospectus and declares that it has taken all reasonable care to ensure that the information contained in this letter and the CPR is, to the best of its knowledge, in accordance with the facts and contains no omission likely to affect its import. This declaration is included in the Prospectus in accordance with Item 1.2 of Annex 1 and 1.2 of Annex III to the Prospectus Directive Regulation. The principal Mineral Assets in which the Client is interested comprise Taparko, Bissa and other exploration assets in Burkina Faso, Lefa in Guinea, Suzdal, Zherek and Balazhal in Kazakhstan, and Berezitovy, Irokinda, Zun-Holba,Tabornoe,Aprelkovo,Gross,Prognoz,Nercha,andUryakhinRussia. In the CPR “Aprelkovo” means “Pogromnoe occurrence”, “Irokinda” means “Irokindinskoe gold deposit”, “Zun- Holba” means “Zun-Holbinskoe gold deposit”, “Nercha” means “Nerchinskaya perspective field”, “Berezitovy” means “Berezitovoe deposit”, “Suzdal” means “Suzdalskoe gold deposit”. These projects are at various stages of exploration and development, all of which are discussed in detail in the CPR. WAI considers that the relevant areas have sufficient technical merit to justify proposed programmes and associated expenditures. The Prospectus contains an appropriate summary of each of the assets, and WAI is satisfied with the integrity of the information contained in the Prospectus based on the limited validation work performed by WAI, but more importantly, reliance on the legal due diligence performed by Nord Gold and its subsidiaries in the projects geographical locations. Requirement and Structure of the CPR WAI has prepared the CPR in accordance with the requirements set out in article 23(1) of the Prospectus Directive Regulation and item 133 of CESR’S Recommendations for the consistent implementation of the European Commission’s Regulation on prospectuses No 809/2004 (the “CESR Recommendations”). WAI has reviewed the resources and reserves as presented by Nord Gold and in many cases prepared independent resource and reserve estimates in accordance with the 2004 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (the "JORC Code"), all of which are shown in the CPR. dŚĞWZŚĂƐďĞĞŶƐƚƌƵĐƚƵƌĞĚŽŶ̌ƚĞĐŚŶŝĐĂůĚŝƐĐŝƉůŝŶĞďĂƐŝƐŝŶƚŽƐĞĐƚŝŽŶƐŽŶ'ĞŽůŽŐLJ͕DŝŶĞƌĂůZĞƐŽƵƌĐĞƐĂŶĚ Ore Reserves, Mining Engineering, Mineral Processing, Infrastructure, Occupational Health and Safety, Environmental Management, and a Financial Assessment for each of the Mineral Assets. Site visits were made by WAI to all the assets mentioned above with the exception of Prognoz in Russia. sĞƌŝĨŝĐĂƚŝŽŶ͕sĂůŝĚĂƚŝŽŶ̌ŶĚZĞůŝĂŶĐĞ The CPR is dependent upon technical, financial and legal input. The technical information as provided by Nord Gold to, and taken in good faith by, WAI has not been independently verified by means of re- calculation, but all reserve and resource estimates have been substantiated, or re-modelled, by evidence from WAI’s site visits and observations, are supported by details of exploration results, analyses and other evidence and take account of all relevant information supplied by Nord Gold. WAI has conducted a review 2 and assessment of all material technical issues likely to influence the future performance of the Mineral Assets which included the following: x Inspection visits to the mining operations, processing facilities, surface structures and associated infrastructure, undertaken in the last two quarters of 2009 the second quarter 2010 and first quarter 2011, with: o discussion and enquiry following access to key on-site and corporate personnel; o an examination of historical information and results made available by Nord Gold in respect of the Mining; o a review of Nord Gold's resource estimates with re-modelling where appropriate; and o a review of Nord Gold's production forecasts and costs. x undertaken all necessary investigations to ensure compliance with the Prospectus Directive Regulation in conjunction with the CESR Recommendations and the JORC Code (where appropriate) in terms of the level of disclosure. The majority of the resource and reserve estimates presented in the CPR have been prepared in accordance with JORC Code by WAI or other international consultants, with the remainder classified under the Russian system upon which WAI has made comment. WAI has placed reliance on Nord Gold that the following information provided by Nord Gold to WAI is both valid and accurate for the purpose of compiling the CPR: x all technical information; and x that the legal ownership of all mineral and surface rights has been verified and save as disclosed in the CPR that no significant legal issues exists which would affect the likely viability of a project and/or the mineral resources and ore reserves as reported herein. Limitations, Declarations, Consent and Copyright Limitations Nord Gold has confirmed to WAI that to its knowledge the information provided by Nord Gold was true, accurate and complete and not incorrect, misleading or irrelevant in any aspect. WAI has no reason to believe that any facts have been withheld. The achievability of production forecasts and costs are neither warranted nor guaranteed by WAI. The forecasts as presented and discussed herein have been proposed by Nord Gold management and adjusted where appropriate by WAI, based on up-to-date reserve estimates, and cannot be assured. They are necessarily based on economic assumptions, many of which are beyond the control of Nord Gold. Declarations WAIwillreceiveafeeforthepreparationoftheCPRinaccordance with normal professional consulting practice. This fee is not contingent on