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Important events in the second 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. As a result of the substantial uncertainties in the global and
national economies imposed by the Coronavirus pandemic, the Company is
progressing development activities for the Engebø project cautiously and
strategically, with a focus to improve project resilience, retain financial
flexibility and reduce risk. Nordic Mining has no interest-bearing debt and is
adequately financed well into 2021 based on current forecasts and work plans.
Strengthening of Management
The Group’s new CFO Christian Gjerde took up his position effective from 1
August 2020.
ENGEBØ RUTILE AND GARNET PROJECT (100% ownership)
Definitive Feasibility Study completed
In January 2020, the Company published the results of the Definitive Feasibility
Study (DFS) for the Engebø project. The study reinforces Engebø as a world class
rutile and garnet project and outlines the execution plan for the project.
Elevated global uncertainty necessitates project re-assessment
Due to substantial uncertainties in the global and national economies imposed by
the unprecedented Coronavirus pandemic, the Company has adjusted progress plans
and is undertaking a comprehensive project review with the purpose to increase
the project’s robustness to future market conditions. Whilst forecasting is
difficult in a time with possibly the biggest economic uncertainty in decades,
the Company assumes that the economic recovery from the pandemic can be slow and
that the economic fallout may be more substantial than previously
experienced. The ongoing project review includes revisions of market scenarios
and strategies, as well as updates of sales projections for rutile and garnet.
The global consulting and engineering company Ausenco has been engaged to do a
value engineering assessment of the Engebø project based on a fit-for-purpose
strategy. Preliminary indications have revealed attractive potential and
opportunities for improvement of plant lay-out and configuration as well as mine
methodology and scheduling. Nordic Mining will evaluate the opportunities from
Ausenco and establish plans for further project progress. The DFS and the time
schedule for the project going forward is under revision based on results from
the ongoing review process.
Operating license granted
On 17 June, the Directorate of Mining granted the operating license for the
Engebø project. The license is granted for the life of mine of the project which
includes an open pit and underground phase. The license regulates operational
scope, methodology and procedures to secure safe and efficient production of the
mineral resources and follows the strict regulation practice for Norwegian
mining operations which implies high standards for environment, health and
safety. The operating license completes the main regulatory permits for the
project.
Sustainability at the core of the strategy
Nordic Mining is continuously investigating measures to further improve the
environmental aspects of the Engebø project. In June 2020, an application was
submitted to the Environment Agency for substitution of chemicals that will be
used in ore processing. The planned consumption is a 99% reduction compared with
the granted chemicals in the environmental permit of 2015. Further, Nordic
Mining will evaluate (renewable) electric drying instead of natural gas to
reduce climate footprint from the mineral processing. Additionally, the ongoing
assessments of plant lay-out and configuration may further reduce the physical
footprint of the project.
Comprehensive planning is ongoing 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.e. advanced environmental monitoring programs to ensure adherence to
permits and to mitigate environmental effects.
Market outlook and dialogues
Generally, the market outlook for rutile and garnet is uncertain due to the
impact of the Coronavirus pandemic. For rutile, expected reduced supply and
retained attractiveness in various industrial applications indicate a positive
fundamental long-term outlook. The average rutile price in the first half of
2020 is reported around USD 1,240 per tonne (FOB Australia). This is around USD
100 per tonne higher than the price assumption used in the Engebø DFS. The
dialogue with the Japanese trading house, with which a Heads of Agreement
related to rutile offtake and participation in project financing was signed in
2019, is proceeding constructively, with target to finalize the terms and
conditions for a long-term offtake agreement.
The demand for garnet is affected from reduced economic activity caused by the
Coronavirus pandemic and the reduced oil price. The main production countries
for garnet are Australia, China, India and South-Africa. Currently, there is no
production of garnet in Europe and a long-term source of supply of high-quality
garnet from Engebø is regarded to be attractive.
KELIBER LITHIUM PROJECT (16.3% ownership)
Significant market drivers
Keliber’s updated DFS for the lithium project was presented in February 2019
based on production of lithium hydroxide. Since then, the global lithium market
has softened due to temporary lower demand and weak spot prices in Asia. The
long-term outlook is positive related to accelerated electrification of
transportation and transition of energy production towards renewable sources. A
substantial recovery is expected in the lithium market in the coming years.
Comprehensive activities are ongoing related to increasing production capacities
for lithium batteries in Europe. Also, in the Nordic countries significant
battery initiatives are being developed. Keliber’s targeted position as a low
-cost producer and the first producer in Europe of battery grade lithium
hydroxide is expected to be an advantage when it comes to future sales to
European battery manufacturers.
Ongoing project update and reviewKeliber continues to advance the lithium
project in various fields including technical planning, permitting, ore
potential, market assessments and financing. This also includes activities to
optimize the business case compared with the updated DFS published in February
2019. Decisions have been taken to increase the production capacity for lithium
hydroxide from 12,000 to 15,000 tonnes per year. Further, the concentrator plant
will be moved closer to the main spodumene deposits to increase efficiency and
reduce environmental footprint.
Oslo, 18 August 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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