Nordic Mining ASA (OAX:NOM) - Interim report per 30 June 2019

Enclosed please find Nordic Mining’s interim report and company presentation for the second quarter of 2019. The interim report and company updates will be presented today, Friday 23 August 2019 at 10.00 (CET) in the company’s office (address details below). A presentation and Q&A session will be held in English and transferred via webcast (details for the webcast below).

Important events in the second quarter of 2019 and year-to-date:

ENGEBØ RUTILE AND GARNET PROJECT (100% ownership)

•  Additional milestones reached in the definitive feasibility study

In August, the mining optimization work was completed and potential to increase the mineable ore volume significantly has been identified. Strategic scheduling and stockpiling of ore resources will be applied to optimize the mining operation. The updated operating plan reduces the amount of waste rock and extends the open pit period by minimum 5 years compared to the prefeasibility study.

All major test work has been completed and the process flow sheet has been optimized with respect to the dual product combination. The repeatability demonstration program confirms that the flow sheet can be replicated for full-scale production.

The Company is currently in the procurement stage of the feasibility study with requests for quotations issued to potential suppliers. The supplier feedback will assure quality in the capital cost estimates for the definitive feasibility study and enable an efficient move forward into the project execution phase.

•  Detailed regulation plan approved

In August, Naustdal municipality approved the detailed regulation plan which leaves the regulation plan for water supply as the only outstanding approval required to commence construction. A resolution on water supply is expected in the near future.

•  Application for operating license issued for public hearing
   

In February, Nordic Mining filed an application for operating license for the Engebø rutile and garnet project with the Norwegian Directorate of Mining. The public hearing process is scheduled to end in mid-September. Approval is expected within 12 months of initial filing. The operating license will regulate operational scope, methodology and procedures to secure safe and efficient production of the mineral resources.

•  Agreement with Japanese trading house on offtake and construction financing
   

In January, Nordic Mining signed a Heads of Agreement with a Japanese trading house relating to long term offtake for rutile and participation with a substantial portion of the construction financing for the Engebø project. Offtake on rutile is complementary to the Heads of Agreement previously entered into with the Barton Group relating to offtake and commercial cooperation for garnet from Engebø. Nordic Mining continues constructive dialogues with both parties.

•  Engagement of financial advisor for the Engebø construction financing

In January, Nordic Mining entered into an agreement with Northcott Capital Ltd for provision of financial advisory services for the debt financing of the Engebø project. Initial meetings with potential lenders and guarantors have commenced.

KELIBER LITHIUM PROJECT (18.5% ownership)

•  Progressing towards construction

Keliber targets to start the preparatory works for construction in the Syväjärvi mining area in the second half of 2019 and announced engagement of several key management positions in August. In June, Keliber received a permit to initiate the preparatory work of the mining operations in Syväjärvi and secured the rights to use the land for the purpose assigned in the mining permit previously granted by the Finnish Safety and Chemicals Agency.

•  Increase in resource base

Over the last years, Keliber has consistently increased the resource base for its project. The most recent resource update was completed in June and increased the estimates for Syväjärvi by about 10%. Keliber has continued its drilling program in the Rapasaari area and intends to provide an update of the resource estimates in the second half of 2019.

•  Optimizing the business case
   

Keliber’s definitive feasibility study (“DFS”), which was published in June 2018, confirmed a profitable business case based on production of lithium carbonate. Following an increasing market demand for lithium hydroxide for use in cathodes for lithium-ion batteries in electric vehicles, Keliber completed a test program for production of lithium hydroxide which significantly improves project economics and will form the basis for the project development. Keliber published an updated DFS based on lithium hydroxide in February 2019, outlining an increase in post-tax NPV@8% by more than 70% to EUR 384 million and IRR of 24%.

•  Gain of NOK 98m reflecting increased values in Keliber  

In February, Keliber raised EUR 10 million from existing shareholders to finance ongoing development work and other pre-construction activities. The implied value in the capital raise exceeded the book value recorded by Nordic Mining by NOK 98 million which was recognized as a gain in the consolidated financial statements for the first quarter of 2019. The gain is not subject to tax. Following the share issue in Keliber, Nordic Mining’s shareholding in Keliber is approximately 18.5% with a current book value of NOK 113 million.

CORPORATE

•  NOK 27.5m capital raise completed

In May, Nordic Mining completed a private placement of 12 950 000 shares at a subscription price of NOK 2.125 per share, raising gross proceeds of approximately NOK 27.5 million. The proceeds will be used primarily to finance the Company's ongoing definitive feasibility study of the Engebø project and general corporate purposes. Offtake partner Barton Group and Verdipapirfondet Nordea Avkastning both increased their positions and announced holdings in excess of the notifiable threshold of 5% following the allocation.

•  Rights issue of NOK 35 million proposed

On 23 August, the Company issued a notice for an extraordinary general meeting to resolve on, inter alia, a rights issue of NOK 35 million. The main purpose of the rights issue is to continue the development of the Engebø rutile and garnet project through the completion of the DFS and into the Front End Engineering and Design (FEED) phase. In addition, proceeds from the rights issue will be used for general corporate purposes. 

The second quarter presentation will be held today, Friday 23 August 2019 at 10:00 (CET) in Nordic Mining’s office at Vika Atrium, Munkedamsveien 45 (Entrance A, 5th floor), N-0250 Oslo.

The presentation and Q&A session will be held in English and transferred via webcast. You will have the opportunity to post questions online throughout the webcast session. The webcast will be available on: https://webtv.hegnar.no/presentation.php?webcastId=98043137  

For further information, please contact CFO Birte Norheim, telephone +47-95293321.


Oslo, 23 August 2019
Nordic Mining ASA



Nordic Mining ASA (www.nordicmining.com) 

Nordic Mining ASA (“Nordic Mining” or the “Company”) is a resource company with focus on high-end industrial minerals and metals. The Company’s project portfolio is of high international standard and holds significant economic potential. The Company’s assets are in the Nordic region.

Nordic Mining is undertaking a large-scale project development at Engebø on the west coast of Norway where the Company has rights and permits to a substantial eclogite deposit with rutile and garnet. Nordic Mining also holds 18.5% of the shares in Keliber Oy, which is developing a lithium project in Finland to become the first European producer of battery grade lithium hydroxide.

In addition, Nordic Mining holds interests in other initiatives at various stages of development. This includes patented rights for a new technology for production of alumina, and exploration of seabed minerals, high-purity quartz, nickel and PGE.

Nordic Mining is listed on Oslo Axess with ticker symbol “NOM”.