Third quarter and first nine months 2008 report for IGE Nordic AB
IGE Nordic AB (“IGE Nordic” or the “Company”) announced today results for third quarter ended September 30, 2008. For the quarter, IGE Nordic reported a net result of SEK -3,645 thousand or
SEK -0.14 per share. Since the Company was founded in the fourth quarter of 2007, there are no meaningful results for the same period in 2007. Exploration expenditures during the third quarter of 2008 totalled SEK 12,751 thousand. At September 30, 2008 the Company had cash and cash equivalents of SEK 59,588 thousand, and no interest-bearing debt.
For the period ending September 30, 2008, the Company reported a net result of SEK -1,647 thousand or SEK -0.06 per share. Exploration expenditures in the first nine months of 2008 totalled SEK 18,584 thousand.
International Gold Exploration IGE AB offers to acquire all outstanding shares in IGE Nordic
On October 30, 2008 International Gold Exploration IGE AB (publ.) (“IGE”), which currently holds 20,000,000 shares or 74.6 percent of the outstanding shares in IGE Nordic, declared its intention to make a voluntary offer to acquire all the outstanding shares in IGE Nordic. The acquisition will be made through an all share offer, giving the shareholders in IGE Nordic 4 new shares in IGE for each share held in IGE Nordic (“Offer”). The Offer is for the 6,816,042 shares held by other investors.
Following the announcement, the Board of IGE Nordic decided to establish an independent Committee. The Committee will evaluate all aspects of IGE's offer and make such decisions that the situation may require. The Committee has retained EVLI BANK PLC as financial advisor to provide a fairness opinion and Eversheds Law Firm as legal advisor.
Update on the 2008 work program
During the third quarter, based on the encouraging drill results, IGE Nordic refocused its exploration program on Rönnbäcken and as a consequence, exploration at the other properties has been scaled back.
In 2008, the Company is expecting to complete approximately 23,000 metres of diamond drilling costing SEK 28 million. In the first nine months of 2008, roughly SEK 18.6 million was spent.
Please note that some of the activities described below have occurred after 30 September 2008.
Rönnbäcken nickel project (IGE Nordic 100%)
As a result of the current drilling program, IGE Nordic has substantially increased the exploration target from 130 – 170 million tonnes to 180 – 220 million tonnes at a grade of 0.10 to 0.15% nickel in sulphide. These are preliminary numbers and further work needs to be carried out before the mineral resource can be estimated.
Highlights of the Rönnbäcken Project and from the additional drill results reported on 19 November 2008:
1. IGE Nordic now has complete assay results from 33 out of 88 holes. Another 22 holes are partly analysed and the results will be released soon.
2. The results to date are encouraging as they are consistent with the assays from the surface sampling program that was done previously. The drilling shows that the mineralization extends at depth and along strike.
3. The drilling at the southern part of Rönnbäcksnäset indicates a sub-horizontal structure of nickel-bearing serpentinite that is at least 150 m thick and is open down dip and along strike.
4. IGE Nordic increased its exploration target to 180 – 220 million tonnes grading 0.10 to 0.15% nickel in sulphide from the previous target of 130 -170 million tonnes.
5. Several outcropping serpentinite lenses, with similar proportion of nickel in sulfides to total nickel, require drill testing.
6. The current drill program indicates that the nickel in sulphides are homogenous over wide intervals with values of 0.10-0.15% and a total nickel content of 0.17-0.20%.
7. The analytical results for nickel in sulphide correlate well between the primary and secondary laboratories.
8. Scott Wilson Roscoe Postle Associates Inc (“Scott Wilson RPA”) has been retained to provide a NI 43-101 mineral resource estimate and prepare a Scoping Study, which is expected to be completed by the second quarter of 2009.
9. Previous metallurgical large scale pilot tests by Boliden in the mid seventies has shown that a 25-35% nickel in concentrate can be produced
10. The project has well established nearby infrastructure; a stable economic and political environment and well defined legal framework; potential future capital costs could be low relative to laterites; conventional mining and milling methods could be used; and it should not have any significant acid mine drainage from the pits, waste rock or tailings.
• By early November, a total of 88 holes were drilled for a total of 13,543 metres. The initial drilling program, which was for 8,000 metres, was completed in August. Approval was given for the second phase of diamond drilling. The additional 8,000 metres is expected to cost SEK 9.2 million and be completed by yearend.
• During the quarter, a number of important contracts were signed to support Rönnbäcken’s development. They included:
• Scott Wilson Roscoe Postle Associates Inc. (“Scott Wilson”) has agreed to prepare a NI 43-101 resources estimate and a Preliminary Assessment, including a preliminary open pit mine design, a variography analysis, and an economic estimate. This report is expected in the second quarter of 2009.
• Xstrata Process Support (Canada) has agreed to and has started mineralogical tests using a combination of QEMSCAN and EPMA.
• Outotec Minerals Oy of Finland has been hired and has started metallurgical test work including bench scale rough flotation tests.
• Studies for the location of the tailings pond and the industrial infrastructure have commenced.
• Overall Project Schedule:
• The Company has sufficient capital to complete the Scoping Study which includes the Resource Report and Preliminary Assessment.
o Ni 43-101 Resource Report and Preliminary Assessment is scheduled to be completed in the 2nd quarter of 2009.
o The application for an exploitation concession for Rönnbäcken, including an Environmental Impact Assessment is expected to be submitted by the end of 2009.
o The Company is targeting mid 2011 for the application for an Environmental Permit.
o At the same time, a final bankable feasibility study is expected to be finalized by mid-2011 and project financing by mid 2013.
o With a two and one-half year expected construction period, commissioning is expected at the end of 2014.
Other Exploration Projects
• At the Bidjovagge gold-copper project (IGE Nordic 100%), drilling started at the end of June with two rigs. By the end of September, 4,827 metres out of a 5,000 metre program were completed. The results of the 2008 drilling program demonstrate the possible extension of gold-copper mineralization in the historical mining areas.
o Follow up on area just north of old mine where previous drilling intersected 5.59 g/t Au and 1.54 % Cu over 27 m in 2007 (Drill hole B07-04)
o 11 of 14 holes intersected gold/copper mineralization
B08-01 intersected 24 m grading 2.69 g/t Au and 0.32% Cu
B08-10 intersected 17m grading 0.11 g/t Au and 0.86% Cu
B08-11 intersected 5m grading 3.52 g/t Au and 0.43% Cu
o IGE Nordic holds extensive property with exploration property in the area. However, further exploration work has been deferred in order to focus on Rönnbäcken.
• At the Solvik gold (IGE Nordic 50%, Archelon Mineral AB 50%) and Västansjö nickel (IGE Nordic 100%) projects, exploration work has been deferred in order to focus on Rönnbäcken .
Jointly-owned companies
Uranium: Norrsken Energy Limited
Norrsken Energy Limited is owned by IGE Nordic 49% and Energy Ventures Limited (“EVE”) 51%. EVE is the manager and has committed SEK 5 million to fund the initial exploration programs. The new entity comprises 100% ownership of 16 exploration permits, and comprises an area of about 1,200 km2 in Sweden.
During the quarter, EVE advanced exploration with preliminary field visits to most of the northern project areas. Areas thought to be unprospective were relinquished application fees and application fees were recouped from the Swedish Mining Inspectorate.
Radon cup surveys were planned for the Björkråmyran and Nammejaure projects, where known uranium deposits occur adjacent to the exploration permits and where the trends of the mineralised structures can be reasonably inferred. Work programs have been submitted to the Swedish Mining Inspectorate and work will commence once these programs are approved
Exploration was also progressed on Ardnapuouda, Olserum, Sännsjölandet, Pålänge and Seper projects; primarily at a desk-top compilation and planning stage.
Other Developments
Fred Mellberg joined IGE Nordic as Manager of Mineral Processing and Environment. Fred holds a Masters of Science in Mining Metallurgy from the Royal Institute of Technology in Stockholm, Sweden. He has extensive experience spread over 36 years, working in environmental management, processing and production positions at Zinkgruvan Mining AB under ownership of Vieille Montagne, Union Miniere, North Limited and Rio Tinto Plc. International experience was also gained from participating in Rio Tinto’s Safety Auditing Team as Safety Auditor. He was a member of Swedish Mining Association Environment Committee 1978-2003 and was a Board Member of the LakeVättern Society of Water Conservation 1975 – 2006.
Dialogue and exchange of views continues with local communities in Northern Sweden with regard to the Rönnbäcken Nickel Project
To raise local awareness and support for the Rönnbäcken nickel project, IGE Nordic has continued its efforts to provide an information update and to consult with all stakeholders in the Storuman area. In early November, several meetings were held.
1. Storuman Municipality
IGE Nordic met with Storuman Municipality to provide an update on exploration and potential development plans for the Rönnbäcken nickel project. This was the third meeting with the Municipality this year where there was an opportunity for dialogue and exchange of views. Of particular interest to IGE Nordic is information on municipal planning, infrastructure, the local employment and the availability of local contractors.
“Mining is one of our strategic areas for the creation of new jobs in the municipality and we welcome projects which can be realized with due consideration to other vital interests, like reindeer herding, environmental protection and tourism. Based on the information received at meetings with IGE Nordic, it is our impression that the Company is working responsibly and is seeking a constructive dialogue with local stakeholders. Therefore, we regard the process positively which the Company is presently following to establish a viable mining operation at Rönnbäcken. If the Company proceeds with permit applications, then we will give our views on the concrete proposals put forward” said Mayor Gunilla Lundgren, Chairman of the Storuman municipal council at the latest meeting.
2. Vapsten Sámi village
IGE Nordic and the Vapsten Sámi village (“Vapsten”) held two days of consultations in Tärnaby as part of a strategy to develop an open and candid relationship.
The parties exchanged views and ideas on the project and discussed alternative solutions to minimize the negative impact of a potential mining operation on the Vapsten’s reindeer herding activities. IGE Nordic and Vapsten have agreed to conduct a study, to be performed by Hifab AB, on how the project might impact reindeer herding. This study will also contain an analysis of its impact on social aspects.
“We appreciate that IGE Nordic has initiated consultations with us at such an early stage. This has provided us with the opportunity to take part in the project from the very beginning and participate in the planning process. IGE Nordic has shown its commitment to maintaining an open and transparent dialogue with us and we regard their initiative as a recommended way of managing mining projects in a Sámi territory”, said Jon Mikael Labba, Chairman of Vapsten.
3. The general public
A public information meeting was held in Tärnaby on 5 November 2008. IGE Nordic management gave an update about the ongoing exploration work and development plans for the mining project. The meeting attracted some 60 participants, including the media. The information was well received.
The above-mentioned meetings with stakeholders are not the only ones taking place. Discussions with others in the area are also being arranged to develop a broad understanding of the potential impact of a mining project at Rönnbäcken.
Reporting period January-September 2008
The reporting period for IGE Nordic is calendar year. This interim statement comprises the period from 1 January to 30 September 2008 and compared with the same period 2007.
Business description
IGE Nordic is an exploration company currently operating in Sweden and Norway. The Company has a large and well diversified exploration portfolio in combination with an experienced team of geologists and field technicians with core competences and a unique expertise in evaluating opportunities in the geological conditions specific to Sweden and Norway.
Investments during the period January-September 2008
Net investments during the period amounted to 19,107 TSEK (34,166 TSEK).
Financial position
Net cash flow for the period January-September 2008 amounted to -34,682 TSEK (1,644 TSEK) and the balance sheet amounted to 135,964 TSEK (45,237 TSEK) at the end of the reporting period. Cash and cash equivalents at period-end amounted to 59,588 TSEK (2,104). Shareholders equity amounted to 127,125 TSEK (44,213) at the reporting date i.e. a solvency ratio of 93.5 % (97.7 %).
Assets pledged and contingent liabilities
Assets pledged are 197 TSEK (104) and contingent liabilities are 0 TSEK (0).
Coming reports
Interim report 2008 February 20, 2009
This interim report has not been audited by the company’s auditors.
Stockholm November 20, 2008
Fredric Bratt
Chief Executive Officer
IGE Nordic AB (publ)