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and Q&A session will be held in English and transferred via webcast at:
https://channel.royalcast.com/webcast/hegnarmedia/20200505_5/
You will have the opportunity to post questions online throughout the webcast
session.
Important events in the first quarter of 2020 and year-to-date:
CORPORATE
Adequately financed well into 2021
In January 2020, Nordic Mining completed an equity issue with gross proceeds of
NOK 57.4 million (ref. note 4). Due to the significant uncertainties in the
global and national economies imposed by the Coronavirus pandemic, the Company
will progress project development activities for the Engebø project cautiously
and strategically with a focus on conservation of funding and retaining
flexibility.
Nordic Mining has no interest-bearing debt and is adequately financed well into
2021 based on current forecasts and adjusted work plans.
ENGEBØ RUTILE AND GARNET PROJECT (100% ownership)
Results of the definitive feasibility study published in January 2020
In January 2020, the Company published the results of the definitive feasibility
study (DFS) for the Engebø project. The updated study reinforces Engebø as a
world class rutile and garnet project and outlines the execution plan for the
project. The main results presented in the updated DFS were:
· Pre-tax NPV@8% USD 450 million
· Pre-tax IRR 21.9%
· Post-tax NPV@8% USD 344 million
· Post-tax IRR 19.8%
· Average annual free cashflow first 15 years of USD 70 million
· Net operating cashflow (undiscounted) of USD 2,160 million
· Initial capex of USD 311 million and deferred capex of USD 25 million
(underground)
· Pay-back period < 5 years
Coronavirus uncertainties necessitate project re-assessment
Due to uncertainties in the global and national economies imposed by the
unprecedented Coronavirus pandemic, the Company will adjust progress plans and
review the Engebø project further with the purpose to increase the resilience to
altered market conditions. Although forecasting under the current circumstances
is extremely difficult, the Company assumes that the economic recovery from the
pandemic crisis will be slow and that the economic aftermath may be more
substantial than previously experienced.
The Company’s adjustments imply that the FEED (front-end engineering and design)
and project financing activities will be delayed and not implemented as
initially planned. The project review will specifically include garnet market
assessments following from Barton’s withdrawal as an offtake partner as informed
to Nordic Mining in February 2020. Because of the revised activities, the time
schedule for construction will be affected.
Sustainability at the core of the strategy
As part of the DFS, a comprehensive plan has been made to develop an
environmental and social management system to ensure environmental and social
issues are managed in accordance with the Group’s standards, permits and
Norwegian regulations. This includes i.a. advanced environmental monitoring
programs to ensure adherence to permits and to mitigate environmental effects.
Dialogue regarding rutile offtake
In January 2019, Nordic Mining signed a Heads of Agreement with a Japanese
trading house relating to long-term offtake for rutile and participation with a
substantial portion of the construction financing for the project. The dialogue
between the parties proceeds constructively targeting to finalize the terms and
conditions for an offtake agreement to secure future cashflows and strengthen
the ability to provide financing for the project.
Operating license expected before the summer
The public hearing process regarding the application for operating license for
the Engebø project ended in the fall of 2019. The previous Askvoll and Naustdal
municipalities, as well as the new Sunnfjord municipality, support the
application. Nordic Mining expects a license approval from the Directorate of
Mining in the first half of 2020. The operating license will regulate
operational scope, methodology and procedures to secure safe and efficient
production of the mineral resources.
KELIBER LITHIUM PROJECT (16.3% ownership)
Valuation of Nordic Mining’s investment confirmed
In March 2020, Keliber raised EUR 5.8 million from existing shareholders to
finance ongoing development work and other pre-construction activities (ref.
note 3). Following the share issue, Nordic Mining was diluted from 18.5% to
16.3% ownership. The implied value as per 31 March 2020 confirms Nordic Mining’s
book value of the investment.
Ongoing project update and review
Keliber’s updated DFS for the lithium project was presented in February 2019
based on production of lithium hydroxide. Since then, and regardless of the
Coronavirus pandemic, the global lithium market has softened due to weak spot
prices. Although the long-term outlook is positive, it is difficult to foresee
how the lithium market will develop in the next couple of years.
During the fourth quarter 2019, Keliber made several positive announcements
including increased mineral resource and ore reserve estimates and improved
processing recovery rates resulting from a comprehensive continuous pilot test
program. However, it also announced that the lithium project will be delayed by
at least one year compared to previous estimates. The softer market situation
has adversely impacted Keliber’s progress on securing offtake directly as well
as driven down the general market sentiment/valuation.
Keliber continues to advance the lithium project in various fields including
technical planning, permitting, ore potential and financing. This also includes
activities to optimize the business case compared with the updated DFS published
in February 2019.
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For further information, please contact Senior advisor Lars K. Grøndahl,
telephone +47-90160941.
Oslo, 5 May 2020
Nordic Mining ASA
Nordic Mining ASA (www.nordicmining.com)
Nordic Mining ASA (“Nordic Mining” or “the Company”) is a resource company with
focus on high-end industrial minerals and metals. The Company’s project
portfolio is of high international standard and holds a significant economic
potential. The Company’s assets are in the Nordic region.
Nordic Mining is undertaking a large-scale project development at Engebø on the
west coast of Norway where the Company has rights and permits to a substantial
eclogite deposit with rutile and garnet. Nordic Mining also holds 16.3% of the
shares in Keliber Oy, which is developing a lithium project in Finland to become
the first European producer of battery grade lithium hydroxide.
In addition, Nordic Mining holds interests in other initiatives at various
stages of development. This includes patented rights for a new technology for
production of alumina and exploration of seabed minerals.
Nordic Mining is listed on Oslo Axess with ticker symbol “NOM”.
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