Dannemora reduces need for additional financing

In Dannemora Mineral's interim report for the third quarter of 2011, the Company announced that additional investments of SEK 120 million in new, safer and more efficient ramp systems in the Dannemora iron ore mine had been approved. The report also announced increased costs of SEK 22 million related to consulting support in the Company's investment project and an increase in tied-up working capital of SEK 20-30 million due to the construction of a quality assurance store over in Hargshamn. 

 Since then the Company has been actively working to reduce the need for additional financing. This has led to shifts in non-time-critical investments and various measures to free up working capital.

The fact that Dannemora's investment project has progressed  without disruption or cost overruns and the production start-up date will be met also means the Company will quickly arrive at a situation of positive cash flows.
It is Dannemora Mineral's assessment that the Company's additional capital requirement for financing the Dannemora iron ore mine in the period until a positive cash flow is achieved amounts to approx. SEK 100 million. The Company does not expect this need for additional financing to arise until some time after commercial operation has started at the Dannemora iron ore mine.
Dannemora Mineral also believes that the capital requirement should be funded by equity. Consequently, Dannemora Mineral plans to implement a new share issue of approx. SEK 100 million sometime during the next 6-month period, when the capital market is considered beneficial. The new share issue is likely to be implemented without preferential rights for existing shareholders

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