Northland to Secure Short-term Funding
Luxemburg, March 8, 2013 – Northland Resources S.A. (TSX: NAU, OSE: NAUR, Frankfurt: NPK, First North/Nasdaq: NAURo – together with its subsidiaries, “Northland” or “the Company”) announces an update on the plans for short term and long term financing.
The Company continues to make good progress in its long term financing discussions and has received detailed term sheets from several potential investor groups.
As previously announced the Company has, as a first step, re-phased its capital investment program to a level to better meet its current cash-flow. The assessment of the Board is that this re-phasing will not have any material impact on the Company’s long-term production plan.
Regarding the short-term financing of the reorganization period, the Company is in discussions with the bondholders, as well as its largest suppliers, for additional short-term funding to maintain the present operations of the Company. The additional funding being requested from these stakeholders is approximately USD 20 million including a request to the bondholders to release an amount of up to USD 10 million out of the debt service account. The provision of such funding is expected to allow the Company to continue planned operations beyond mid-April, and the Company believes it is realistic to conclude its long term financing solution by this time.
President & CEO, Northland Resources S.A.
For more information, please contact:
Karl-Axel Waplan, President and CEO: +46 705 104 239
Eva Kaijser, CFO, +46 709 320 901
Anders Antonsson, Vice President – Investor Relations: +46 709 994 970
Web site: 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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