Northland Cancels Announced Equity Issue and Bond Tap Issue, Continues to Explore Alternative Financing
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Luxembourg, February 5, 2013 – Northland Resources S.A. (TSX: NAU, OSL: NAUR, Frankfurt: NPK, Nasdaq OMX/First North: NAURo – “Northland” or the “Company”) announces (with reference made to the Company’s press releases dated January 25 and 29, 2013) that the previously announced contemplated USD 250 million equity issue and USD 125 million tap issue have been cancelled. The Company continues to engage in constructive discussions with a number of investors, including bondholders, creditors and other stakeholders in order to present a sustainable long-term financial solution.
As disclosed in the press release dated January 25, 2013, Northland intended to raise USD 250 million in an equity issue (the “Equity Issue”) and USD 125 million in a tap issue on the existing USD 350 million bond (the “Tap Issue”, and together with the Equity Issue, the “Offerings”) to fund capital and operating expenditure related to its Kaunisvaara project and the associated logistic chain, as well as for general corporate purposes (including the Hannukainen project and transaction costs). As announced on Tuesday January 29, 2013 the subscription period for the Equity Issue was extended to Monday February 4, 2013 at 4:30 pm CET.
It became apparent to the Company and its advisors Arctic Securities ASA and Pareto Securities AS (the “Advisers”) that the Company is not in a position to conclude the Offerings at the end of the subscription period. The Company and its Advisers are engaged in discussions with a number of potential investors regarding the Company’s capital needs and a long-term financial solution. On this basis, the Company has concluded that it is in the best interest of the Company, its shareholders, bondholders, creditors and other stakeholders, to cancel the Offerings. The Company will update the market on developments in due course.
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For further information on the Company, the Kaunisvaara Project, and the background for the additional funding need, please refer to the press releases dated January 24, 25, and 29 2013, which have been posted on the Company’s website: www.northland.eu.
[ON BEHALF OF THE BOARD]
President & CEO, Northland Resources S.A.
For more information, please contact:
Karl-Axel Waplan, President and CEO: +46 705 104 239
Peder Zetterberg, Acting CFO, +46 708 652 120
Anders Antonsson, Vice President – Investor Relations: +46 709 994 970
Or visit our website: www.northland.eu
Northland is a producer of iron ore concentrate, with a portfolio of production, development and exploration mines and projects in northern Sweden and Finland. The first construction phase of the Kaunisvaara project is complete and production ramp-up started in November 2012. The Company expects to produce high-grade, high-quality magnetite iron concentrate in Kaunisvaara, Sweden, where the Company expects to exploit two magnetite iron ore deposits, Tapuli and Sahavaara. Northland has entered into off-take contracts with three partners for the entire production from the Kaunisvaara project over the next seven to ten years. The Company is also preparing a Definitive Feasibility Study (“DFS”) for its Hannukainen Iron Oxide Copper Gold (“IOCG”) project in Kolari, northern Finland and for the Pellivuoma deposit, which is located 15 km from the Kaunisvaara processing plant.
This press release may include “forward-looking” statements within the meaning of applicable securities laws. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believes”, “estimates”, “anticipates”, “expects”, “intends”, “may”, “will” or “should” or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are expectations concerning, among other things, Northland’s results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which it operates, projected capital and operating expenditures, production and price forecasts, assumed exchange rates and the company's anticipated funding requirements and sources thereof. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Such factors include, among others, those factors discussed in the section entitled “Risk Factors” in the Company’s annual information form dated March 23, 2012, and the management’s discussion and analysis of results of operations and financial condition (“MD&A”) for the year ended December 31, 2011, and the MD&As for subsequent interim periods. Readers are cautioned that forward-looking statements are not guarantees of future performance and that Northland’s actual results of operations, financial condition and liquidity, and the development of the industry in which it operates may differ materially from those made in or suggested by the forward-looking statements contained in this press release. In addition, even if Northland’s results of operations, financial condition and liquidity, and the development of the industry in which Northland operates are consistent with the forward-looking statements contained in this press release, those results or developments may not be indicative of results or developments in subsequent periods.
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