Nordic Mining ASA (OAX:NOM) - Interim report per 30 June 2018

Enclosed please find Nordic Mining’s interim report for the second quarter 2018 and a separate presentation. The interim report and company updates will be presented today, Friday 17 August 2018 at 10.00 (CET) in the company’s office (address details below). The presentation and Q&A session will be held in English and transferred via webcast (details for the webcast below).

Important events in the second quarter 2018 and year-to-date 2018:

Important events in the second quarter 2018 and year-to-date 2018:

Engebø rutile and garnet project

• Agreements with the main landowners at Engebø signed
  The agreements with the landowners regulate Nordic Mining's acquisition of the area for the planned mineral processing plant, including the existing deep-water harbour facility, and compensation to the landowners for extraction and sale of all mineral products from the Engebø deposit. The mining area comprised by the agreements covers the open pit production phase as well as the service and rock storage areas. The extraction permits granted to Nordic Mining also include the adjacent area for the subsequent underground mining, and Nordic Mining will initiate necessary activities also for this phase.
   
• Permits granted
  Nordic Mining holds all rights and permits necessary for its current operations related to the Engebø project. This includes extraction permits for rutile (state mineral) which, generally, also imply the right to extract garnet and possible other minerals (landowners’ minerals) in connection with the rutile extraction. The zoning plan for the mining and processing areas and the environmental permit for the project are fully granted. The Engebø project will be developed in accordance with high international standards for environment, health and safety.
  
  
• Positive market development and outlook for rutile and garnet
  Price increases for rutile have been observed in the first half of 2018 following from higher demand and reduced stockpiles. Prices have been reported in the range USD 1,000 – 1,050 per tonne. Going forward, rutile production from current producers is expected to decrease due to depletion of operating deposits. The attractiveness of high-grade titanium feedstock for pigment production and the manufacturing of titanium metal is expected to persist.
  
  There is no production, or planned production of garnet in Europe today, apart from Engebø. The current global supply of high-quality garnet for high-end applications is short of the increasing demand.

        Dialogues relating to offtake agreements for rutile and garnet are ongoing.

• Good progress on the definitive feasibility study
  The main purpose of the definitive feasibility study is to qualify the project for construction financing with a combination of debt and equity. This implies that the quality of the technical assessments and financial analysis will increase further from the prefeasibility study. The definitive feasibility study is progressing well and targets high-quality assessments and de-risking of all important aspects of the project.
  
  Certain aspects of the mineralogy and texture of the Engebø deposit is complex, and the ongoing process testwork is comprehensive and thorough. Several positive clarifications and verifications have been achieved related to configuration of the rutile and garnet processing circuits. Testwork activities, including bulk sample testing, continues in the third quarter.
  
  It is crucial to have the assurance of an optimised, cost efficient and robust process flowsheet as the basis for the engineering and the detailed design. Certain engineering tasks related to crushing and storage have commenced, and others will start when the testwork program is completed. The timeline for completion of the definitive feasibility study will be reaffirmed when the process flowsheet has been finalised. The current estimate is completion mid-year 2019.

• Infrastructure and execution planning
  Various other development activities are ongoing in parallel with the definitive feasibility study. This include i.a. assessments related to supply of process water and electricity, detailed planning of the process plant and mining areas, archaeological investigations, and preparation of a comprehensive monitoring program for environmental aspects. Bulk solids flow testwork for determination of bin and chute designs is also in progress. Dialogues have been initiated with various Norwegian contractors for the civil and underground development contracts.  Development of “expression of interest” bidders lists and documentation for critical packages such as the modular plant and mining are in progress.
  
  
• Increased resource estimates
  The Engebø resource model and classifications were updated in June 2018 by Competent Person Adam Wheeler. The limited drilling program in January/February 2018 resulted in an increase of the estimated mineral resources in the measured and indicated categories (JORC Code 2012) by around 5%, to approximately 98 million tonnes, based on a cut-off of 3% TiO2. The average grade of rutile and garnet is 3.87% and 44.4%, respectively.
  
  
• Geotechnical assessments confirm important mine plan parameters
  The international mining consultancy company SRK has carried out geotechnical, hydrogeological and structural logging and modelling based on Engebø drill hole data. SRK’s recommendations on slope angles and stability conditions confirm important parameters for the open pit design and mining schedules, including ore and waste rock tonnages. The mine and scheduling plans will be completed when rutile and garnet recovery factors have been determined in connection with the final processing assessments. 
  

Keliber lithium project

• Definitive feasibility study confirms profitable lithium project
  In June 2018, Keliber (Nordic Mining owns approximately 22%) completed the definitive feasibility study for the lithium project in Finland. The study confirms a profitable business case and outlines the plans for execution of the project. The definitive feasibility study has been developed in accordance with the high reliability/accuracy standards for such studies. The main results are summarised in the following:
  

        Strong project financials:
        §   Pre-tax net present value (NPV - 8% discount rate) of EUR 295 million
        §   Post tax net present value (NPV - 8% discount rate) of EUR 225 million
        §   Pre-tax internal rate of return (IRR) of 24%
        §   Post tax internal rate of return (IRR) 22%
        §   Pay-back period: 5.5 years
        Significantly increased mineral resource and ore reserve estimates
        Average battery grade lithium carbonate sales volume of 10,745 tonne/year
        13 years of open pit and underground mining operations followed by 7 years of production based on purchased spodumene concentrate
        Upfront capital cost of EUR 199 million for mines and production facilities; additional capex of EUR 56 million during the production period

• Assessments related to project financing are ongoing
  The definitive feasibility study is expected to provide a solid foundation for project financing required to execute the lithium project. Dialogues with financial institutions to secure financing with a combination of debt and equity are ongoing. In parallel, assessments and dialogues to secure offtake agreements suitable for the project financing are carried out.
  
  
• Permitting process well under way
  Keliber has submitted the permit application for the Syväjärvi deposit. Applications for the Kalavesi concentrator plant and the Kokkola process plant will be submitted in the coming months. To streamline the process, Keliber has obtained a special pre-consultation status for its permitting process which implies that the company interacts closely with the authorities throughout the process.
  
  
• Strong lithium market and outlook
  Generally, the lithium market is developing on a positive note and product prices have increased in the first part of 2018. Contract prices for lithium carbonate doubled in 2017 compared to 2016. Going forward, a continued tight market balance is expected. The fastest demand growth for lithium is related to batteries for electric/hybrid vehicles and energy storage. Several initiatives are ongoing related to battery production in Europe.
  

Corporate

• In January/February 2018, Nordic Mining executed a private placement and a subsequent offering with gross proceeds of NOK 59.6 million.
  
  
• The Group continues to strengthen the organization. CFO Birte Norheim and Project Manager Engebø, Kenneth Nakken Angedal took up their positions effective from 1 August 2018. Recruitment processes have been initiated for various technical disciplines related to the Engebø development.

The second quarter presentation will be held today, Friday 17 August 2018 at 10:00 (CET) in Nordic Mining’s office at Vika Atrium, Munkedamsveien 45 (Entrance A, 5th floor), N-0250 Oslo.

The presentation and Q&A session will be held in English and transferred via webcast. You will have the opportunity to post questions online throughout the webcast session. The webcast will be available on: http://webtv.hegnar.no/presentation.php?webcastId=92029583
  
For further information, please contact CFO Birte Norheim, telephone +47-95293321.


Oslo, 17 August 2018
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 in Norway and internationally. 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. Permits for the project have been granted by the Norwegian government. The definitive feasibility study was initiated directly following completion of the prefeasibility study in October 2017. Nordic Mining’s associated company Keliber completed the definitive feasibility study for its lithium project in Finland in June 2018. Nordic Mining has rights for exploration and production of high-purity quartz in Kvinnherad in Norway. Further, the Company holds exploration rights at Reinfjord in northern Norway where a prospective area of sulphide mineralisation has been discovered. Nordic Mining is also exploring opportunities related to seabed mineral resources.

Nordic Mining is listed on Oslo Axess with ticker symbol "NOM".