Interim Report January – June 2017
Significant events during the second quarter 2017
- A Letter of Intent was signed with Rail Cargo, a subsidiary of Austrian state owned ÖBB, regarding future logistics between the mine and harbour.
- Consultants were contracted and work commenced with the mine planning and production scheduling for the feasibility study. As part of that work the geotechnical data generation was completed and the report is expected in August. The data and models generated from the geotechnical and hydrogeological data have been used to set the parameters for the mine (stope) design and the mine schedule.
Second quarter, 1 April – 30 June 2017
- Income amounted to SEK 0 million (0)
- Earnings after tax amounted to SEK –2.6 million (–2.4)
- Investments in the period April–June totalled SEK 3.1 million (0.8)
- Basic earnings per share were SEK –0.02 (–0. 07)
Interim period, 1 January – 30 June 2017
- Income amounted to SEK 0 million (0)
- Earnings after tax amounted to SEK –4.9 million (–4.8)
- Investments in the period January–June totalled SEK 4.0 million (2.9)
- Basic earnings per share were SEK –-0.06 (–0.13)
- Cash and cash equivalents on 30 June 2017 amounted to SEK 10.6 million (4.3)
Significant events after the end of the period
- DMT finalised and released an updated Mineral Resource Estimate, which increased resources by around 15%.
- A mining concession for an extension to the NE of Blötberget was granted by Bergsstaten.
Iron Ore Prices return to volatility.
Following a reasonably stable iron ore price of around $80-90/t IODEX 62%Fe, the second quarter of the year returned to more volatile downward prices, with the price plunging from over $90/t to below $55/t in a matter of days. This was a reaction to renewed investor interest in the iron ore sector and an unjustified fear of gross oversupply in the market. It had the effect of closing a few marginal operations in places like China, India and Iran in particular until the balance was redressed. However, as NIO has always maintained, the sustainable price for iron ore is in excess of $65/t in our view and that the average price of iron ore for 2017 is likely to be over $70/t for the year.
NIO management continue to believe that the annual average prices will provide an attractive margin of profit for NIO’s first Phase, the reopening of the Blötberget mine and that the following developments, Phases II and III, will add to increasing the profitability and the NPV of the company as it moves towards being a >4Mt/y producer.
A recent meeting with all those involved with the NIO logistics solutions was held in port of Oxelösund. This included port of Oxelösund authority, state owned Austrian company Rail Cargo, the wagon supplier, Innofreight and Trafikverket . It was agreed that the port authority and Rail Cargo/Innofreight would start the final design for the rail wagons, the desired loading specification, the rail schedules, the unloading equipment and methodology at the port. NIO has existing Letters of Intent with these service suppliers, where it should be noted that NIO does not have any capital requirements for the completion of the products logistics delivery solution, but will include the fees for the service as an operating cost. This will finalise the logistics part of OPEX costs for NIO and will be matched with the mine production schedule.
NIO recently received and published (on NIO web pages) an updated Mineral Resource Estimate (MRE) which advanced our resources by over 15%. The geological models constructed for these increased resources will provide the basis for a key aspect of the feasibility study, the mine design, the mine schedule and the mineable “Reserves”. These form the defining components to start the final design of the processing plant and to update all the costs required by a Definitive Feasibility Study. Once costs have been assessed to an acceptable level the Company will then be able to declare its Phase I assets as “Mineable Reserves”.
These activities demonstrate that NIO is approaching the conclusion of the feasibility study and that the higher levels of accuracy in design are reducing the project execution risks for potential investors.
For further information please contact:
Paul Marsden Managing Director
phone: +44 7776 180 988
Nordic Iron Ore Group is a mining company with the ambition to revive and develop the iron ore production of Ludvika Mines in Blötberget and Håksberg. The company also intends to expand its mineral resources, and upgrade them to ore reserves, primarily through exploration and other studies of the connecting Väsman field. For more information, see www.nordicironore.se.