The Pre-Feasibility Study on Dannemora confirms viable possibilities for “green” iron ore production

Grängesberg Exploration Holding AB - GRANGEX - presents the results of the completed Pre-feasibility study (PFS) of the conditions for the recommencement of production in the Dannemora mine. The key objective for the PFS has been to investigate the possibility to develop Dannemora as a carbon-free mine operation. The PFS confirms the possibility of producing a high-grade iron ore concentrate with a much-reduced carbon footprint and that the project should be taken to the final feasibility study stage. The study is a continuation of the Scoping Study presented in May 2021 and shows improvements on many levels. Golder Associates ("Golder") has compiled the PFS report.

"This is promising news for GRANGEX shareholders, the local and regional community, as well as the Swedish mining community, and in fact historical. Through the dedicated and successful process development, Dannemora can be transformed from low quality to a high-quality iron ore producer. The study shows that Dannemora mine has, subject to the environmental permitting process, good possibilities to enter the market in 2025 and be a high-quality iron ore producer with a very low carbon footprint, possibly with a potential future green premium. This just in time to be part of the accelerating sustainable transition of the European steel industry and meeting the market demand of green steel", says Christer Lindqvist, CEO of the GRANGEX group.

Highlights of the report:

• The financial evaluation of the project carried out as part of the PFS has estimated pre-production capital expenditure of US$ 131 M, (MSEK 1,179), sustainable investments during life of mine of US$ 52.1 M (MSEK 468,9), and closure costs of US$ 3,9 M (MSEK 34.9) giving a total capital expenditure during the life of mine of US$ 187 M (MSEK 1,683). An operating cost, FOB, of US$ 44.7/dmt for production of 68% iron ore concentrate and based on a product price FOB of US$ 125/dmt and 9.00 SEK/US$ give the following financial results, pre-tax[1];
  • Net Present Value at 8% discount rate; US$ 319 million (MSEK 2,869)
  • Internal Rate of Return (IRR) 51 %
  • Payback time less than 3 years, from production start.
     
• The annual run-of-mine (ROM) rate has been calculated to 3 Mt resulting in a production of 1.1 Mt (equivalent dry weight) 68 % iron ore concentrate, meeting the requirements for direct reduction iron (DRI) and thus green steel production.
• A key conclusion of the PFS work is the possibility that the Dannemora mining project can be a high-grade iron ore producer with a very low carbon footprint by operating a fully electrified underground mining and beneficiation process while producing a high-grade magnetite concentrate with Green Steel credentials. Thus, have possibilities to become a preferred supplier in the emerging transition of the steel industry towards the production of green steel.
•  An updated JORC 2012 compliant Mineral Resource Estimate of the mine amounts to 28.19 Mt, at 36.54% Fe, Measured and Indicated; and 5.82 Mt at 33.61% Fe, Inferred[2].
• The Probable Ore Reserves for Dannemora Mine, on 31st December 2021, is estimated to be 25.36 Mt, with 33.44% Fe at a cut-off grade of 15%, gives a Life of Mine of approx. 9 years.
• Furthermore, once in operation, the immediate area surrounding the mine has the potential for further development of additional mineral resources, as several of the mineralised bodies are open at depth. There is also a possible resource in the underground deposited tailings from the latest production period.
• The possibility of extending the life of the mine has been studied and a total of seven different areas in the mine have been identified as exploration targets. These exploration targets have been estimated at 20 to 35 Mt with iron content between 34 and 39%.

Competent Person (CP) for Mineral Resources and Ore Reserves:

Mr. Thomas Lindholm, GeoVista AB, who is a Fellow of the Australasian Institute of Mining and Metallurgy, is the CP responsible for the Resource Estimate for Dannemora based on his training and experience in exploration, mining and mineral resource estimation of iron ore, base and precious metals. The Mineral Resources and Ore Reserve are reported following the guidelines of the JORC Code, 2012 edition.

Qualified Person (QP) for Processing:

In terms of Processing, Bo Arvidson (PhD) of Bo Arvidson Consulting LLC, is the Qualified Person (QP) under NI 43-101 responsible for the process development and the conceptual process flowsheet design.

The Executive summary of the Pre-feasibility study Is published on the company website.

CONTACT PERSON

Christer Lindqvist, CEO, phone. +46 70 591 04 83.

This information is such information that Grängesberg Exploration Holding AB is obliged to publish following the EU Market Abuse Regulation. The information was submitted, through the agency of the above contact person, for publication on January 19, 2022, at 08.45 (CET).

ABOUT GRANGEX, GRÄNGESBERG EXPLORATION HOLDING AB (publ)

Grängesberg Exploration Holding AB (publ) is a group that investigates the conditions for sustainable extraction of identified mineral projects. The company's business concept is to, first and foremost, prospect and develop sustainable and high-quality apatite and iron ore deposits and become a sustainable raw material supplier to European industry in the ongoing climate change. GRANGEX intends that the Dannemora mine at the start of operations will be the first carbon dioxide-free iron ore mine, and that the GRANGEX Apatite project in Grängesberg will be the first fossil-free producer of apatite.
The Company's share (GRANGX) Is traded on NGM Nordic SME.
ISIN-code: SE0007789417
FISN-code: GRANGESBER/SH
Instrument-ID: 9XX
Legal Entity Identifier (LEI) number: 549300MZ7HL7X6AXMC13.

More information www.grangesbergexploration.se