Northland Studies Possibility of Using Deep Water Port
Luxembourg, July 21, 2010: Northland Resources S.A. ("Northland" or "the Company") is studying the possibility of exporting its iron ore concentrate from the existing Scandinavian port of Narvik, which already handles Cape-Sized dry bulk cargo vessels from its deep water port. Northland also continues to evaluate using the port at Kemi, Finland, and the two port studies will be developed in tandem. The Company is in advanced discussions with potential off-take parties in the Middle East and the Far East for a majority of its 5 Mtpa future production from the Kaunisvaara Iron Ore Project.
"The interest we have received from potential overseas customers makes it necessary to investigate an additional port alternative in parallel to Kemi," stated Karl-Axel Waplan, President and CEO of Northland.
Exporting from a deep water port would provide a great advantage in maximizing the received Free On Board price ("FOB") for overseas demand. The Port of Narvik in Norway is presently used for the shipment of LKAB's (Sweden) iron products. The Port can handle up to 250-300,000 dwt vessels and a substantial amount of the required terminal infrastructure is already in place. This should mean that the required terminal investments in Narvik could be substantially lower than at the Port of Kemi. In addition, the use of the Port of Narvik, compared to the Port of Kemi, should remove transshipment expenses, as the existing Kemi alternative requires the transfer of iron ore concentrate from Handy-Max to Cape-Size vessels. The Port of Narvik will also provide year-round, ice-free export of iron ore concentrate.
As scheduled, the Management team presented the Board of Directors the draft Definitive Feasibility Study (DFS) at the beginning of July. The Board reviewed the results of the study and it was decided to review the possibility of using a deep sea port before finalizing the DFS. Northland expects the studies on the alternative port solutions to be finalized during late summer this year.
To reach the Port of Narvik, the Kaunisvaara concentrate would be trucked 120 km to an existing heavy-haul railway between Sweden and Norway. The existing roads and rail can handle Kaunisvaara's planned production volume. Initial investigations suggest that the added cost of using trucks is more than offset by reduced overall shipping costs to market and the higher received FOB price for deliveries to the Middle East and the Far East markets.
Despite one of the partners in the Kemi Bulk Terminal ("KBT") consortium, Euroports Holdings S.à r.l., withdrawing from the joint-venture, Northland and Havator are continuing with discussions on a co-operation, both in respect of the Kemi option as well as the Narvik option.
Karl-Axel Waplan
President & CEO
For more information please contact:
Karl-Axel Waplan, President & CEO: +46 705 104 239
Anders Hvide, Executive Chairman: +47 92 88 98 58
Or visit our website at: www.northland.eu