Interim Report January – September 2016
Significant events during the second quarter 2016
- The geotechnical logging continued
- Income amounted to SEK 0 million (0)
- Earnings after tax amounted to SEK – 2.0 million (–2.6)
- Investments in the period July - September totalled SEK 0.5 million (0.7)
- Basic earnings per share were SEK –0.06 (–0. 17)
Third quarter, 1 July – 30 September 2016Interim period, 1 January – 30 September 2016
- Income amounted to SEK 0 million (0)
- Earnings after tax amounted to SEK –6.8 million (–10.7)
- Investments in the period July - September totalled SEK 3.4 million (9.5)
- Basic earnings per share were SEK –0.19 (–0.74)
- Cash and cash equivalents on 30 September 2016 amounted to SEK 1.9 million (1.1)
Significant events after the end of the period
- A bridge loan was granted by major owners
The Market for Iron Ore Advances Strongly:
The iron ore market price for 62%Fe iron ore has made a major surge again to well over $70/t (See figure below).
Source:- The Steel Index
Many observers are still puzzled. but the following facts have contributed to the maintaining the strength of iron ore prices.
- Closure of iron ore mines in China
- Continued growth in iron ore imports to China. the rate is a record level at over 1bn tonnes/year
- As NIO management have stated many times the big 3 or 4 iron ore suppliers have control of the markets and are beginning to throttle back supply
- The big three suppliers have reduced capital spend and investment and the consequence is that they are either incapable of meeting targets or are (deliberately??) missing production targets because of over optimism. Vale for instance targeted 400Mt in 2016 and it is now expected to produce 340-350Mt in 2016.
- Less likelihood of Roy Hill starting up – delayed until 2017 officially
More telling is the fact that the iron ore futures have been rising steadily over the past few months in defiance of what many of the analysts have been predicting. The 2019 calendar year average has risen almost 30% and shows little sign of returning to unrealistically low values seen previously.
Quality premiums, in Asia in particular. are seen to be rising, with an increase in values rising as high as $9/t between the 62%Fe fines and 65%Fe – values not seen for some years. Furthermore, premiums for other high quality or value-added iron ore products are reaching the highest levels seen for some years.
These increases in the premiums for quality iron ore products potentially provide NIO with improved profit margins and reinforce the general view that continued shortages of quality ores will continue to maintain these premiums for some time.
All of this evidence is beginning to reinforce a case for investment for the future.
NIO continues to carry out the next step of the feasibility study by the appointment of specialist consultants for the geotechnical and hydrogeological assessment as a precursor for the mine design and scheduling phase of the study.
However, this work requires additional financing and the board is presently evaluating alternatives to raise the funding needed
Paul Marsden
Managing director
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.
