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As a consequence of the COVID-19 pandemic and uncertainties related to the
markets for rutile and garnet, and the opportunities for securing project
financing, Nordic Mining decided in spring 2020 to undertake a Value Engineering
review to make the Project more resilient.
The updated study documents Engebø as a sustainable and economically robust
mineral project with reduced financing risk, improved financial resilience, and
attractive financials returns.
The key results are provided in this release and in the attached UDFS Executive
Summary. The Executive Summary and the UDFS presentation will be available on
www.nordicmining.com.
At 10.00 (CET) today, Nordic Mining will host a webcast presentation of the
UDFS. Further details regarding the presentation and the webcast are provided
below.
The main improvements and risk-reducing measures in the UDFS are:
· Reduced environmental footprint; 99% reduction in consumption of approved
chemicals in the production process (compared with the 2016 environmental
permit), around 80% reduction of CO2 emissions and approximately 40% reduction
of the process plant facilities footprint compared with the DFS
· Contract and execution strategy based on EPC partnerships and early vendor
engagement
· Stick-build construction methodology and improved ore flow logistics
· Reduced initial investment needed to realize the project from USD 311
million to USD 218 million, maintaining a Run-of-Mine (ROM) of 1.5 Mtpa
· Reduced process operating cost by more than 25% following from flowsheet
optimizations, including reduction in energy costs from use of electrical dryers
for drying of minerals
· Improved mining design for open pit and underground focusing on practical
and cost-effective operations. Mining schedule in open pit has been optimized
for the initial years and the underground mining schedule targets higher grades
and a simplified infrastructure
· Reduced market risk based on post-pandemic market forecasts for rutile and
garnet, retaining flexibility to increase garnet production in line with
increasing demand
· Attractive project economics with considerable reductions in market,
financing, and execution risks
Key economic figures:
·
· Pre-tax NPV@8% of USD 355 million
· Pre-tax IRR 22.5%
· Post-tax NPV@8% of USD 260 million
· Post-tax IRR 19.8%
· High-margin cash flow and short pay-back support bankability:
· Initial capital investment of USD 218 million
· Life of Mine EBITDA of USD 2.1 billion, corresponding to an EBITDA-margin
of 68%
· Life of Mine Operating Cash Flow of USD 1.7 billion
· Free Cash Flow the first 10 years of full operations of USD 51 million per
annum
· Pay-back period of 4.4 years from start of production
· Optimized schedule and dual mineral production provide competitive strength:
· Outcropping and geotechnically stable orebody
· Low stripping ratio (waste to ore ratio) of 0.6 in open pit
· High-grade rutile and garnet
· Short distance and gravity supported ore transportation minimize
transportation
· 1st quartile revenue-to-cash cost position for rutile
· Optimized mining plan and scheduling support an initial 39 years Life of
Mine:
· 15 years of open pit mining and high-grade processing, and stockpiling of
medium/low-grade ore
· 19 years underground production
· 6 years production based on stockpiled ore
· Extension of Life of Mine expected based on substantial inferred resources
· All permits granted:
·
· Extraction permits for the whole deposit
· Operational license for open pit and underground mining
· Landowner agreements for open pit, infrastructure, and
process plant areas
· Detailed zoning plan
· Environmental permit
· High environmental and social standards in accordance with IFC Performance
Standards and relevant Equator Principles
Comments from Nordic Mining
CEO Ivar S. Fossum comments:
"The UDFS summarizes significant improvements and de-risking of the Project that
will make it an attractive, long-term investment. The combination of reduced
financing needs and environmental improvements underpins a sustainable project.
Engebø will enable strategic market positions in both titanium and garnet.
The Project will be developed in accordance with high international standards
for environment, health, and safety. We have taken initiatives to strengthen
stakeholder dialogues and to monitor and mitigate environmental effects."
Activities going forward
Dialogues with market partners for rutile and garnet are proceeding towards
finalization of offtake agreements on bankable terms and conditions. Subject to
financing, construction will start in the second half of 2021.
UDFS webcast presentation and Executive Summary
The UDFS will be presented today at 10.00 (CET) followed by a Q&A session.
The presentation and Q&A session will be held in English and transferred via
webcast. There will be opportunity to post questions online throughout the
webcast session. The webcast will be available on:
https://channel.royalcast.com/landingpage/hegnarmedia/20210511_12/
For questions, please contact CEO Ivar S. Fossum, telephone +47 930 96 850.
Oslo, 11 May 2021
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 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 14.3% 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 Euronext Expand with ticker symbol “NOM”.
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