NOM - Nordic Mining acquires Finnish lithium project
Nordic Mining acquires 68% of Keliber Oy and confirms its strategy of exploration and production of high-end minerals and metals. Keliber has plans and permits for exploration and production of lithium carbonate in Finland. Keliber will be the first European producer of lithium carbonate, scheduled to start production in 2010. One of the main applications for lithium carbonate is for production of batteries to mobile phones, laptops, electric vehicles, portable tools a.o.. The increasing demand for electric and hybrid cars is boosting production of lithium ion batteries, indicating a positive forecast for lithium carbonate.
Keliber's production plant in Finland is expected to be cost competetive with current production of lithium carbonate and has a "green" profile with regard to both the process itself and the final product. Keliber has initiated cooperation with Outotec Oyj and Lassila & Tikanoja Oyj, leading Finnish corporations within process technology and waste management. This cooperation may also influence the development of related projects within Nordic Mining.
The acquisition of Keliber will give Nordic Mining a strong foothold in Finland, where the mining industry shows significant strong growth. Keliber's founder, being a shareholder and general manager, will continue his employment with the company.
"The realisation of the lithium project will give opportunities of strategic and industrial importance for Nordic Mining", says Ivar S. Fossum, CEO. Lithium is a mineral with advanced forward-looking applications and is in particular attractive as a component in the new generation of batteries. The shareholders of Keliber have build a solid platform for further development in their preparations for the first European production plant for lithium carbonate."
"The cooperation with Nordic Mining represents a new era for our company", says general manager of Keliber, Olle Sirén. "From being a small private company, we are now becoming part of a strong and ambitious Nordic mineral group. We appreciate Nordic Mining's long term perspective in industrially sound projects. This is a good fit with our own philosophy. We believe in increased demand and expanded application for lithium, and the timing of a new production plant in Finland is good. The mining activity and establishment of lithium production will be of significant importance for this region, representing new activity and possible further development. Keliber has in cooperation with the Osterbotten Institute for adult education in Karleby, started training of approximately 30 persons within chemistry and process technology. There is a strong interest in the production of lithium in the Osterbotten region", comments Olle Sirén.
Keliber's lithium project
Keliber Oy has mining concessions, permits and approved plans for exploration of lithium minerals in Kaustinen in the Osterbotten region in Finland. In addition to mining concessions, the plans also includes a new process plant for production of lithium carbonate. (Li2CO3). Total investments are estimated to EUR 40 - 45 million. Keliber has carried out project development for several years and the company is ready to enter into contracts for civil work, construction and erection once financing has been established. Nordic Mining will play a key role in the financing of the project and will commence preparations for this in the first half of 2008.
Production is scheduled to commence in 2010. Production will initially be based on a resource of spodumene ore of approximately 3 million tons with a grade of 0.92% lithium oxide. The spodumene ore also contains economical grades of tantalumpentoxide and quartz-feldspar. The planned production from this resource represent a sales value of approximately USD 250 million at current market prices for lithium carbonate. In addition, Keliber has exploration licences for two spodumene deposits which at a later stage might be processed in the same plant.
Keliber's production plant is based on technology developed in cooperation with Outotec Oyj (www.outotec.com), an internationally leading company within process technology for mining and metallurgical industries. The plant will be located adjacent to a new biogas plant planned by the Finnish environment and waste handling company Lassila & Tikanoja Oyj (www.lassila-tikanoja.fi). Keliber will utilize energy and CO2 from the biogas plant in its production process.
Increasing demand for lithium
Lithium has many industrial application areas and there are several derivaties based on lithium, i.a. lithium carbonate. Lithium carbonate is used for instance in the glass and ceramic industries, for production of lubricants and in pharmaceutical products as well as in various alloys. An important application area for lithium carbonate is in batteries for mobile phones, computers, electric and hybrid cars, electric tools etc.. Lithium has special properties as regards ability to store electric energy, and the battery sector is an important growth area for lithium carbonate.
Increased focus on environmental issues and CO2 emission have already significantly affected the demand for electric and hybrid cars based on lithium ion batteries. The large international car manufacturers have development programs and focus which clearly indicate increased relative importance of these car types in the coming years. Toyota, as an example, has informed of plans to go 100% hybrid by 2020.
Acquisition of 68% of Keliber
Nordic Mining ASA has entered into an agreement with the shareholders of the Finnish company Keliber Oy (Keliber) to acquire 68% of the shares in Keliber (the Shares).
Consideration for the Shares is EUR 4 million of which EUR 2.4 million is cash payment. The remaining consideration will be 5,104,000 shares in Nordic Mining at a subscription price of NOK 2.50 per share. The consideration shares will be distributed among the eight selling shareholders of Keliber. The consideration shares and 34% of the cash amount will be paid on closing of the transaction. The remaing cash amount is due for payment later, partly conditioned on the development of the lithium project.
The cash consideration is financed from existing funds in Nordic Mining.
Conditions and time schedule
The agreement to acquire a majority shareholding in Keliber is conditioned upon due diligence with satisfactory result. The intention of the parties is to complete the transaction by mid-May at the latest after completion of due diligence and verification of current project plans.
Keliber's directors and management
Keliber's board of directors consists of Heli Vuorinen (chairman), Eero Mäenpää, Esa Ojutkangas and Olle Sirén, who is general manager of the company. There are no further employees in Keliber.
The board members together with four additional persons are the shareholders of Keliber. Each of the eight shareholders will hold 4% of the shares in Keliber; in total 32%, when the transaction with Nordic Mining is completed. Consequently, continued participation from the present owners and also project knowledge are secured.
Financial key figures
Key figures from Keliber's annual accounts for the years 2004 - 2006:
(all figures in EUR 1000) 2004 2005 2006
Profit and loss
Sales - 1 -
Other income 78 97 48
EBITDA 26 -7 -90
EBIT -71 -24 -107
Loss for the period -37 -28 -111
Balance sheet
Non-current assets 125 111 96
Current assets 10 4 92
Total assets 135 115 188
Equity 103 -58 -186
Liabilities 32 172 383
Total equity and liabilities 135 115 188
Keliber's shareholders have informed that the company's share capital is lost. In accordance with current regulations, information has been forwarded to the Trade Register in Finland. Refinancing of Keliber will be done in connection with the plan for financing of the lithium project.
Nordic Mining
Nordic Mining is a mining company focusing on exploration and production of high-end industrial minerals and metals. As from September 2007, Nordic Mining is listed on Oslo Axess with ticker code NOM.
Nordic Mining has mining operations in the subsidiary Gudvangen Stein AS (85%) with production of anorthosite from its own deposit in Aurland in Sogn og Fjordane county in Norway. Further, Nordic Mining has mineral rights for a significant resource of rutile (TiO2) at Engebøfjellet, also in Sogn og Fjordane county. In addition, Nordic Mining has exploration rights for i.a. tungsten, molybdenum, thorium and gold.
Further information of Nordic Mining can be found on the company's website www.nordicmining.com. Information regarding Keliber can be found on the website www.keliber.fi.
For questions please contact CEO Ivar S. Fossum on telephon +47 - 930 96 850.
Oslo, 14 January 2008
Nordic Mining ASA