Increased life for Dannemora iron ore mine

Dannemora Mineral's new estimation of the mineral reserves in the iron ore mine was reported in a press release issued on 12 January 2012. The mineral reserves, which are classified under national and international standards based on the Australian JORC Code, have increased by 6.9 million tonnes to a total of 35.1 million tonnes (previously 28.2) and the iron content is estimated to be 35.3% (previously 36.2). The entire Mineral Reserve is classified as probable.

The mining plan for the mine has been adjusted to reflect the new mineral resource estimate. The mine's life expectancy has increased by approx. 2 years to 15 years compared with the previously estimated life of 13 years.

At planned production of approx. 1,500,000 tonnes of iron ore products per year, Dannemora's cash cost (i.e. cost of production plus transportation and all other expenses to the port), is estimated at SEK 265 per tonne of finished product. This corresponds to just under USD 40 per tonne at the current dollar exchange rate (SEK 6.65).

The new expanded mineral reserve is partly the result of the concentrated mine-site exploration the Company has carried out so far. Dannemora has budgeted for ongoing future mine-site exploration throughout the mine's life and considers the prospects for extending the mine's mineral reserves to be very good. Another factor is a change of the cut-off grade to 20 percent iron. The former estimate was based on a cut-off grade of 30 percent iron.

Dannemora Mineral has also designed and dimensioned its new sorting plant and new hoist system (ore skip) for a future annual production volume of 2,000,000 tonnes of iron ore products and when a higher level of production is reached, the Company's cash cost is likely to be lower than the figure mentioned above.

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