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Summary of important events in the first quarter of 2022 and year to date:
KEY EVENTS
· Ministry of Trade, Industry and Fisheries confirms Engebø operating license
· Permit for groundworks at Engebø approved by Sunnfjord Municipality
· Landowner properties acquired and early construction work started at Engebø
· Keliber’s Lithium Project value increases by 220% to EUR 1.2 billion
CORPORATE
New Commercial Director appointed to strengthen Group Management
In March, Nordic Mining appointed Maurice Kok as new Commercial Director
effective from 1 August 2022. Mr. Kok has broad and international experience
from sales and marketing of alloys and mineral products from Elkem, TiZir/Eramet
and Kalbar Operations. In addition to sales management, Mr. Kok has specific
experience from the mineral sands industry as well as business development and
has been involved with mining projects at an early stage ahead of operations
commencing.
Milestone first part of project financing for the Engebø Rutile and Garnet
Project completed
In January 2022, Nordic Mining completed the first part of the project financing
equity for the Engebø Rutile and Garnet Project of NOK 132.5 million from a
group of local Sunnfjord investors led by two of the Engineering, Procurement
and Construction (“EPC”) partners for the Engebø Project.
The equity contribution is structured as a loan with conversion rights to shares
in Nordic Mining ASA, with certain obligations on specific terms and milestones
as the project development progresses. The convertible loan will upon conversion
contribute as part of the equity for the project financing package for the
Engebø Project.
The loan was resolved by the Extraordinary General Meeting (“EGM”) on 4 February
2022.
The Group is progressing its assessment of several financing structures, with
discussion on possible participation in the project financing from selected
strategic investors in final stages. The remaining project financing package is
expected to be in excess of USD 250 million comprising debt, equity and
potential hybrid capital or royalty. Financial close is targeted before end H1
2022, pending continued constructive progress on various workstreams and
receptive capital market conditions.
ENGEBØ RUTILE AND GARNET PROJECT (100% ownership)
Ministry of Trade, Industry and Fisheries confirms Engebø operating license
In May 2022, the Ministry of Trade, Industry and Fisheries (“MTIF”) confirmed
that Nordic Mining’s operating license is maintained as granted with full rights
to the Engebø deposit, supporting the resolution from the Directorate of Mining.
The decision from the MTIF is final and cannot be appealed. The resolution from
the Ministry includes requirements related to operations and environment:
· Maximize resource utilization and minimize waste based on Best Available
Technologies
· Mine plans for underground to be approved by Directorate of Mining latest
one month before start of underground operations and optimizing possible
backfill
· Utilize a fossil free mining fleet based on available technology and
implement goals for reduction of climate gas and waste
The requirements are to a large extent already part of the current permits and
operational plans for Engebø.
Nordic Mining starts early construction work at Engebø
In April 2022, Nordic Mining started early construction works at Engebø after
closing of the acquisition of the main properties at Engebø. The early works
includes preparing the properties for construction, continuation of detailed
project planning and process for procurement of critical process equipment, and
commencement of groundworks on process plant area and preparatory works for
tunnelling. The early works is expected to secure important project developments
that enables optimizations of the construction schedule. In preparation for
start of construction Nordic Mining has undertaken initial environmental
monitoring, which will continue throughout construction and will form the basis
for a new environmental baseline for start of operations.
Superior carbon footprint at Engebø
In March 2022 SRK Consulting (UK) Ltd, conducted an analysis to compare the
Green House Gas (“GHG”) emissions associated with the Engebø Project, with
existing operators in the global titanium value-chain. The comparative study
shows that Engebø Rutile and Garnet has the lowest carbon footprint compared to
five major operators. The annual GHG footprint of the Engebø project is 3,058
tons of CO2e with an estimated carbon intensity of 0.01 tCO2e per ton finished
product, which is one to two orders of magnitude lower than comparable
operators.
Permit for groundworks at Engebø approved by Sunnfjord Municipality
In February 2022, Sunnfjord Municipality approved the building permit for all
infrastructure groundworks for the Engebø Rutile and Garnet Project. The permit
is fully in line with the UDFS and the EPC contracts.
The approved building permit by the municipality together with already approved
demolition permit for existing buildings and agreement with county road
authority, completes the formal requirements for starting construction work at
Engebø. Permits for general and process plant buildings will be applied for in
due course according to finalization of detail engineering by the EPCs.
Taking action to ensure sustainability at Engebø
Nordic Mining is taking a proactive approach to ensure that the Engebø project
will be developed based on high standards for sustainability. A comprehensive
Environmental and Social Management System (“ESMS”) is currently being
implemented for the Project. Important management plans that have been finalized
in Q1 2022 are Extractive Waste Management plan, Construction Environmental
Management Plan (“CEMP”) and a Conceptual Closure and Rehabilitation Plan.
Further, a Biodiversity Action Plan is being developed together with DNV. The
Group has set an ambitious goal of biodiversity net-gain for the Engebø Project
over life of mine. The plan includes measures to continuously work to reduce,
restore, and compensate biodiversity loss at the mine site.
An environmental monitoring program using state of the art technology has been
put in place at Engebø to monitor environmental effects from construction
activities. The aim is to supervise potential effects related to airborne dust,
vibrations and noise, and risk for emissions to fjord surface water and
freshwater bodies.
Tightness in supply for high-grade feedstock - significantly increase in rutile
prices through Q1 2022
Record high titanium dioxide demand for pigment production continues to
exacerbate tight supply of rutile feedstocks, with prices expected to rise
further in 2022.The tightness in supply for high-grade feedstock is expected to
continue driven by uncertainties over supply from major producers, including
Iluka, Tronox and Rio Tinto, and no new major sources of supply likely to impact
the market. Declining ore grades at Richards Bay Minerals in South Africa
require investment from Rio Tinto, but protest and violence at the site in
recent years have disrupted production, including over the summer, and the
expansion is on hold. Major western pigment producers have reported that a lack
of titanium feedstock is limiting their production rates and inhibiting their
ability to meet demand from their end customers. Rutile prices increased
significantly through the first quarter, with reported rutile prices in excess
of USD 1,500/mt FOB in March 2022.
Nordic Mining progressing negotiations with potential partners for long-term
offtake of garnet. Product samples has been supplied for testing, with results
that compare well with industrial reference qualities.
KELIBER LITHIUM PROJECT (12.0% ownership)
Keliber’s Lithium Project value increases by 220% to EUR 1.2 billion
In March 2022, Keliber released the Updated Definitive Feasibility Study
(“UDFS”) for the Lithium Project in Central Ostrobothnia, Finland. The UDFS to
produce battery-grade lithium hydroxide (“LiOH”) confirmed a solid financial and
technical feasibility of Keliber’s project, with significant improvements in the
key financials compared to the Definitive Feasibility Study from 2019.
Key economic figures from Keliber’s UDFS (numbers in brackets relate to the
comparable numbers from DFS from 2019):
· Post-tax NPV@8% of EUR 1,228 million (EUR 384 million)
· Post-tax IRR 31% (24%)
· Payback period (from start of production) 3.5 years (4.1 years)
Nordic Mining owns 12.0% of the shares in Keliber. See Financial Performance and
note 3 on fair value assessment of the investment in Keliber as per 31 March
2022.
Keliber’s lithium hydroxide will have a smaller C02 footprint than majority of
competitors’ products
In March 2022 Keliber released the results of two emission analysis undertaken
by the consulting company Wood Mackenzie based on analysis of seven existing or
planned global lithium chemicals production chains and a Life Cycle Assessment
(“LCA”) undertaken by Vahanen Environment Oy, a Finnish environmental
consultant. The comparative study indicates that Keliber’s lithium hydroxide
will have a smaller carbon footprint than most of the competitors’ products,
with the lowest emission intensity of 4.38 tonnes of CO2/produced tonne of
lithium hydroxide monohydrate (LiOH?H2O). Keliber’s total carbon footprint
measured in the LCA is 10.0 t CO2-eq/produced tonne of LiOH.H2O. The LCA is
according to Keliber a cradle-to-gate analysis that covers all production stages
from the mine to a finished product leaving the lithium chemical plant. The
production from Keliber is planned to begin in 2024.
Sibanye-Stillwater closes last EUR 5 million tranche of equity investment in
Keliber
In February 2021 Keliber Oy and Sibanye-Stillwater Limited (“SSW”) entered into
agreement for an initial phased equity investment of EUR 30 million. In line
with the agreement the final tranche of SSWs initial investment was closed on 14
March 2022 with SSW subscribing for 125,000 shares for EUR 5 million.
Nordic Mining owns 12% of the shares in Keliber after SSWs last tranche of the
initial phased EUR 30 million investment.
Oslo, 10 May 2022
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 12.0% 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 Euronext Expand Oslo with ticker symbol “NOM”.
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