Northland Announces Third Draw Down from its Bond Loan
Luxembourg, November 29, 2012 – Northland Resources S.A. (TSX: NAU, OSL: NAUR, Frankfurt: NPK, STO: NAURo – “Northland” or the “Company”) has received the Norsk Tillitsmann’s confirmation to execute its third draw down. Following this draw down of USD 25 million, the Company has USD 67 million remaining of its USD 350 million bond loan facility.
“I am very pleased with the continued robust development of our Kaunisvaara project”, said Karl-Axel Waplan, President & CEO of Northland Resources. “The report from the independent engineer, Royal HaskoningDHV, is again a strong validation of the project management team’s capacity to meet the tight deadlines in a professional manner. This third drawdown, in combination with other financial facilities provided by a group of international institutions, is expected to ensure that Northland has enough funding to start production and initiate the shipments to customers in the early part of the first quarter 2013”.
In February 2012 Northland issued a corporate bond of USD 350 million. The funds are available on an escrow account with Norsk Tillitsmann ASA as the trustee. Northland Resources is entitled to draw down from the escrow account only after a Cost-to-Complete test performed by Royal HaskoningDHV (formerly known as Turgis Consulting Ltd) has been conducted.
Norsk Tillitsmann, in agreement with Northland, has appointed Royal Haskoning to act as independent engineer to monitor Northland until maturity of the bond in 2017. Since Royal HaskoningDHV now has confirmed the satisfactory results of Northland’s third Cost-to-Complete test, Northland has executed its third draw down of about USD 25 million. The previous draw downs of in total USD 240 million were announced on July 2 and September 17, 2012.
The Northland bond has a 13% coupon rate which is payable in semi-annual installments. As per the bond agreement, the first interest payment on the bond was paid in September 6, 2012. To service the coupon rate for the next three payments, the Company plan to retain the remaining amount on the escrow account.
President & CEO, Northland Resources S.A.
For more information, please contact:
Karl-Axel Waplan, President and CEO: +46 705 104 239
Peder Zetterberg, Acting CFO, +46 708 652 120
Anders Antonsson, Vice President – Investor Relations: +46 709 994 970
Or visit our website: www.northland.eu
Northland is set to become a producer of iron ore, with a portfolio of production, development and exploration mines and projects in northern Sweden and Finland. The first construction phase of the Kaunisvaara Project is near completion and production is expected to start in November 2012. The Company will produce high-grade, high-quality magnetite iron concentrate in Kaunisvaara, Sweden, where the Company will exploit two magnetite iron ore deposits, Tapuli and Sahavaara. Northland has entered into off-take contracts with three partners for the entire production from the Kaunisvaara Project over the next seven to ten years. The Company is also preparing a Definitive Feasibility Study (“DFS”) for its Hannukainen Iron Oxide Copper Gold (“IOCG”) project in Kolari, northern Finland and for the Pellivuoma deposit, which is located 15 km from the Kaunisvaara processing plant.