Thu, 23 May 2013 18:30:00 +0200

Interim report January – March 2013

Significant events during the first quarter of 2013

  • Date for finalizing of the application for an environmental permit at the Land and Environment Court was decided
  • Results from drilling campaigns were published – total mineral resources increased by approximately 178%
  • Letter of intent for iron ore deliveries was concluded with the Port of Oxelösund

 Interim period, 1 January – 31 March 2013

  • Income amounted to SEK 0 million (0)
  • Operating profit amounted to SEK -4.8 million (-4.2)
  • Investments during the period January - March amounted to SEK 4.9 million (2.1)
  • Earnings per share before dilution amounted to SEK -0.41 (-0.55)
    • Cash and cash equivalents on 31 March 2013 amounted to SEK 6.6 million (4.2)

Significant events after the end of the period

  • Letter of intent for marketing and deliveries of iron ore products of up to 600,000 tonnes per year was concluded.

Comments from the CEO

The year started with both positive and negative events. It is positive that our project has made tremendous progress. In January we were able to publish a new estimate of the mineral resources. This showed that we almost trebled our indicated and inferred mineral resources to a total of 170 million tonnes with good iron content. For Blötberget this entails an increase of our total mineral resources by approximately 66 per cent compared to the most recent estimate and raises our hopes for further expansion of the resources as a result of the second part of the drilling campaign which is planned for this year.

Unfortunately we have been affected negatively by major problems which have impacted other actors in our industry, which has given the capital market a negative perception of Swedish iron ore projects. This means that similar to other companies which develop iron ore projects, we will be forced to invest significant resources on capital procurement issues – resources which should instead be used to manage projects further.

Fortunately enough we recently concluded our first letter of intent for future ore deliveries. This relates to deliveries of up to 600,000 tonnes of iron ore products per year to Coal and Ore Trading Ltd. Against this backdrop, we are now planning to start production in the Blötberg Mine already during the second half of 2014. The earlier production is planned to take place with simplified methods and the entire work will be outsourced to contract companies. However our original project plan, with the aim of producing 4.4 million tonnes of highly enriched iron ore products per year under personal management from 2018 stands firm.

The production start in the Blötberg Mine constitutes the first stage in a gradual development of the integrated project which covers the deposits in Blötberget, Väsman field and Håksberg. The gradual production start which we intend to conduct aims to totally optimize the project and reduce the risks during the implementation. This also means that the investments can be made in several stages in line with the expansion, which reduces the financing risk in the project.

In conclusion, our project is developing positively, but the financing work has been obstructed and delayed by external factors. Therefore, we are still waiting with the plans for a market quotation of the Company, and are now targeting an offer to a limited circle of investors in order to finance the final feasibility study for the start of stage one in the project Ludvika Mines, the restart of mining in the Blötberg Mine.

             Christer Lindqvist, CEO Nordic Iron Ore

For further information: Christer Lindqvist, CEO +46 (0)240-88301
                                           christer.lindqvist@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. For more information, see www.nordicironore.se.

Interim report Q1 2013