Interim Report January – September 2021

  Significant events during the third quarter 2021

• A cooperation agreement was signed with ABB.
• A short-term loan facility amounting to SEK 10.5 million was extended to the year end.
• The board decided upon a set off issue of shares against short term loans

Third quarter, 1 July – 30 September 2021

• Income amounted to SEK 0 million (0)
• Earnings after tax amounted to SEK – 1.9 million (–2.4)
• Investments in the period July - September totalled SEK 0.7 million (1.5)
• Basic earnings per share were SEK –0.06 (–0.08)

Interim period, 1 January – 30 September 2021

• Income amounted to SEK 0 million (0)
• Earnings after tax amounted to SEK –6.8 million (–6.9)
• Investments in the period July - September totalled SEK 1.7 million (2.4)
• Basic earnings per share were SEK –0.21 (–0.23)
• Cash and cash equivalents on 30 September 2021 amounted to SEK 2.1 million (8.1)

Significant events after the end of the period

• The decided set-off issue increases the number of shares by 3,552,062.
• The short-term loan facility will be extended until the end of the first half of 2022.
• The Board begins to seek a successor to the CEO.
   

A dramatic quarter in the iron ore market

During the third quarter, we experienced what must be described as a collapse for the price of iron ore. The main reason for this has probably been the stops for steel production that the Chinese government introduced in an attempt to avoid a crude steel production for the whole of 2021 that exceeds the record level of 2020, achieve environmental goals and at the same time try to push down iron ore prices. During the first months of the year, Chinese steel production was initially about 12% higher than the year before, despite a first round of production cuts demanded by the government. The cuts in the second half of the year therefore needed to be strong to affect the market. The result was the fastest depreciation of iron ore since 2008. See graph below.

However, the fundamentals of the market do not really support this price fall as sustainable, as much of the slowdown in Chinese demand is also explained by Covid outbreaks and a subsequent slowdown in some infrastructure projects in some provinces. While global iron ore production continues to recover somewhat from a multi-year period of repeated supply problems, the expansion of iron ore production and logistics also continues to suffer from economic problems and a lack of investment. This is now exacerbated as several iron ore mines have closed due to the fall in prices.

Despite the fall in prices, the prices of higher qualities remain more resilient while the price of lower quality products is under pressure. There is no doubt that the demands for global environmental improvements and progress in the production of carbon-free steel will help to maintain good premiums for higher-quality iron ore, i e the type of product that NIO will produce. It is our view that iron ore prices will recover; Chinese production cuts are unlikely to be sustainable, which is why some growth can be expected, which is driving iron ore prices.

Project development

During the period, we entered into a collaboration agreement with ABB to design process control and management systems for a future-proof and digitized mining operation in Blötberget. Together with the cooperation agreement with Epiroc, which was reached during the second quarter, we thus have cooperation with two world-leading companies in modern mining technology. Work on a new simplified design of the future cargo terminal in Skeppmora continued in collaboration with the Swedish Transport Administration, which is responsible for the actual design work.

As I mentioned already in the report for the first quarter, we have contact with globally active players, some of whom have shown great interest in helping us with the project. These negotiations resulted in us receiving a proposal for non-binding declarations of intent on cooperation from a globally reputable group. However, the board decided to evaluate more alternatives before a decision is made. Therefore, the loan facility was extended from the major owners to finance the business until a decision is made.

At the end of the period, two short-term loans matured where the lenders had the right to have the receivable settled with newly issued shares, which they naturally chose over cash repayment.

During the quarter, my employment contract expired due to reaching retirement age. However, I extended the agreement for the rest of the year. The board is looking for successors who I wish good luck with this very exciting industrial project.

For further information please contact:

Lennart Eliasson Managing Director
phone: +46 240 88302

lennart.eliasson@nordicironore.se

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. The Company has all the necessary permits in place for the mine in Blötberget and will be able to produce iron ore of extremely high quality.

For more information, see www.nordicironore.se.

Nordic Iron Ore’s shares and warrants are listed at Nasdaq First North Growth Market. Wildeco is the company’s Certified Adviser (info@wildeco.se tel +46-8-545 271 00).

This information is required and provided by Nordic Iron Ore AB (publ) under the EU Market Abuse Regulation. The information was provided through the agency of the contact person set out above for publication at the date and time set above.