Wed, 01 Feb 2012 21:55:00 +0100

Nordic Iron Ore to be listed on NASDAQ OMX First North

NOT FOR DISTRIBUTION OR PUBLICATION, DIRECTRLY OR INDIRECTLY, IN OR INTO AUSTRALIA, HONG KONG, CANADA, JAPAN NEW ZEELAND, SOUTH AFRICA OR THE UNITED STATES. OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR PUBLICATION VIOLATES APPLICABLE RULES IN SUCH COUNTRY. ADDITIONAL RESTRICTIONS APPLY. PLEASE SEE IMPORTANT INFORMATION AT THE END OF THE PRESS RELEASE.

The Board of Nordic Iron Ore AB ("Nordic Iron Ore" or the "Company") has applied for listing of its shares on NASDAQ OMX First North, and has in connection herewith decided to, with deviation from the current shareholders' preferential rights, conduct an issue of new shares in Company("Offer") at a value of SEK 140 million.

Nordic Iron Ore is a mining and exploration company founded in 2008 aiming at resuming mining operations in Blötberget and Håksberg and exploring the possible intermediate expansion potential of the Väsman field – all together forming the Ludvika Mines in Dalarna, in the central part of Sweden. Nordic Iron Ores establishment and expansion plan is justified by strong demand for steel and favourable iron ore prices as well as economies of scale as the Company will become the first player ever to integrate the major iron ore deposit in the Ludvika region.

In order to harness the potential of Ludvika Mines, Nordic Iron Ore has carried out geological, technical and environmental studies after its formation in 2008, applied for and been granted mining concessions for the mineralisation in Blötberget and Håksberg [1] and conducted a preliminary economic assessment (PEA). The study was reported in December 2011 with promising results. The Company intends to submit an environmental permit application for the planned mining operations to the Environmental Court in the first quarter of 2012. The Company has also conducted new magnetic measurements over the Väsman field in addition to those made by Ställbergsbolagen during the 1950’s and 1960’s. The interpretation of the magnetic measurements will form the basis for a core drilling campaign that is scheduled for spring 2012. In order to secure Nordic Iron Ore’s financing ahead of the next phase of project development at the Ludvika Mines and to broaden the shareholder base of the Company, the Board of Directors of Nordic Iron Ore has decided on February 1, 2012 to conduct an issue of new shares in Nordic Iron Ore, with deviation from the current shareholders’ preferential rights, in the form of an offer directed to the public and institutional investors in Sweden and selected institutional investors outside of Sweden (”the Offer”). The Offer includes shares at a value of SEK 140 million.

The Offer in brief:

  • The Offer to subscribe for shares in the Company is directed to the public and to institutional investors in Sweden and selected institutional investors outside of Sweden.
  • The subscription price is determined through a tender in the range of SEK 23-29 per share. The subscription price of the Offer will not exceed SEK 29 per share.
  • The new share issue comprises no more than 6,086,957 shares in Nordic Iron Ore. The value of the Offer will be SEK 140 million before transaction costs.
  • The application period for the public is February 2 - February 14, 2012 (3 PM CET). The application period for institutional investors is February 2 - February 15, 2012 (3 PM CET). Expected first day of trading on NASDAQ OMX First North is February 16, 2012.
  • The prospectus is available on the Company’s website (www.nordicironore.se) and on ABG Sundal Collier’s website (www.abgsc.se).

Ulf Adelsohn, chairman of the board, comments:
"Since ancient times, there has been iron ore mining in the Ludvika region. It is with genuine commitment and pride we have decided to take the next step towards resuming iron ore mining in Bergsslagen."

Christer Lindqvist, president and CEO, comments:
"We have defined mineral resources, the ability to produce high quality iron ore products and a central location with unusually good access to rail with good standard. Moreover, we may have a unique opportunity for expansion thanks to the potential in the intermediate Väsman field where we accelerate the pace of exploration in order to, as soon as possible, define potential mineral resources that may enhance the profitability of the project as a whole."
 

PRESS CONFERENCE, 2 February, 2012, 9 AM CET
Nordic Iron Ore is organising a press conference at Summit, Grev Turegatan 30 in Stockholm, on Thursday 2 February at 9 AM CET. CEO Christer Lindqvist, other executives and the Chairman of the Board Ulf Adelsohn presents the Company and its future plans.
 

Nordic Iron Ore in brief
Nordic Iron Ore has, since its foundation in 2008, carried out geological, technical and environmental studies, applied for and during 2011 been granted mining concessions for the mineralisation in Blötberget and Håksberg [2] and conducted a preliminary economic assessment (PEA). In total, the Company controls indicated mineral resources of 39 million tonnes (with an iron content between 36 and 43 percent) and inferred mineral resources of 22 million tonnes (with an iron content between 36 and 43 percent) in accordance with the NI 43-101 standards. The Company intends to submit an environmental permit application for the planned mining operations to the Environmental Court in the first quarter of 2012. The Company also has conducted new magnetic measurements over the Väsman field that complements those made by Ställbergsbolagen during the 1950s and 1960s. In total, this magnetite mineralization preliminary estimates a tonnage in the range of 600-650 million tonnes. The iron content is calculated to vary from 19 to 47 percent, which represents a weighted average grade of 29 percent. The interpretation of the magnetic measurements will form the basis for the core drilling campaign scheduled to start in spring 2012.

Nordic Iron Ore aims to resume mining operations at Blötberget and Håksberg by 2015 with an expected annual output at full production of approximately 2.2 million tonnes of enriched and final product. Production could be increased if exploration results show that the intermediate Väsman field is viable for mining. In addition, the Company intends to continuously explore, evaluate and maintain other permits for any future development and mining. Nordic Iron Ore has a financial target of, two years after the start of production, achieving a sustainable level of profitability after financial costs at least in line with the industry average.

On December 5, 2011 Nordic Iron Ore announced the results of a preliminary economic assessment (PEA) for its projects for the resumption of mining operations at Blötberget and Håksberg [3]. The results show that the Company’s project has a potential net present value of SEK 2,907 million (USD 415 million) [4] and an internal rate of return (IRR) of 24 percent before taxes and interest. The payback period is 6 years. The projected average product price (FOB Swedish port) used in the PEA is 121 USD/dmt. Total operating expenses per tonne of dry ore concentrate (dmt [5]) shipped free on board (FOB) in the selected Swedish port is estimated to average 362 SEK/dmt (52 USD/dmt), indicating a good margin in the project even at lower iron ore prices.

Background and reasons
In order to harness the potential of the Ludvika Mines, Nordic Iron Ore after its formation in 2008 carried out geological, technical and environmental studies, applied for and was granted mining concessions for iron ore occurrences in Blötberget and Håksberg and conducted a preliminary economic assessment (PEA). The results of the Company's PEA, together with the mineral resources of the Nordic Iron Ore so far has shown – with a relatively limited investment – that the company is on the right track. The good opportunities for, in short time and with relatively limited efforts, resuming a profitable iron ore mining and increasing the mineral resources, is the main motive for the Offer, which aims to secure the financing of the Nordic Iron Ore’s future development activities and preparations for resuming mining activities at Blötberget and Håksberg.

Use of proceeds
The Board of Directors’ objective is for the Company to raise at least SEK 129 million through this Offer after deducting the cost of the Offer[6]. The Offer is, post the repayment of the outstanding loan of SEK 4 million to Bengtssons Tidnings AB and Kopparberg Mineral AB, primarily intended to finance the planned feasibility study (including additional geological surveys and test mining) associated with mining operations in Blötberget and Håksberg. The Company estimates that the cost of this will be about SEK 56 million. Other project expenses, including expenses for ongoing management of the environmental permit application, amounts to about SEK 7 million. In addition to these expenditures, the Company plans for exploration activities of the Väsman mineralisation which is estimated to require about SEK 30 million. Furthermore, the Company will have expenses related to management and administration estimated at around SEK 23 million over the next eighteen months. The remaining SEK 9 million of the proceeds is intended to be used as a buffer for unexpected costs and delays.

It is the Board's assessment that the funds raised through this Offer are sufficient to meet Nordic Iron Ore’s capital needs until the existing project with Blötberget and Håksberg is faced with the decision on future mining operations, whereupon additional capital will need to be raised for the Company.

Listing on NASDAQ OMX First North
In connection with the Offer, the Board of Directors at Nordic Iron Ore has applied for and obtained approval[7] for admission to trading on NASDAQ OMX First North. Listing is important as the confidence of customers, suppliers, distributors and partners is expected to grow with the quality marking the Company receives as a result of the listing. A liquid share, which can be used as payments for acquisitions, is part of the reason for a listing as well as the long-term access to the capital market. The Board of Directors also sees improved prospects of recruiting and retaining skilled employees as an important reason for a listing.

Facts about the Offer
In order to secure the Nordic Iron Ores funding for the next phase of project development of the Ludvika Mines, and to broaden the shareholder base of the Company, the Board of Directors of Nordic Iron Ore has decided on February 1, 2012 to conduct an issue of new shares in Nordic Iron Ore, with deviation from the current shareholders’ preferential rights, in the form of an offer directed to the public and institutional investors in Sweden and selected institutional investors outside of Sweden (”the Offer”). The Offer includes shares at a value of SEK 140 million. The subscription price in the Offer will be determined through a bidding process and will therefore be based on demand and general market conditions. The subscription price will be determined by the Company in consultation with ABG Sundal Collier in the range of SEK 23-29 per share based on the order book built in the bidding process. The interval corresponds to a valuation of the Company of SEK 179-226 million before the Offer. The final subscription price will be the same for both the retail and institutional investors and it will not exceed SEK 29 per share. The final subscription price is expected to be published on or about February 16, 2012.

The Board intends to implement the Offer by deciding on an issue of new shares by virtue of an authorization from the General Meeting of Nordic Iron Ore on June 15, 2011. Full acceptance of the Offer, means that the Company will be transferred SEK 140 before expenses of the Offer[8]. As a result, depending on the issue price determined within the above range, the number of shares may increase with a maximum of 6,086,957[9] from 7,784,000 to 13,870,957 and with a minimum of 4,827,586[10] from 7,784,000 to 12,611,586, which corresponds to 38-44 percent of the capital and votes in the Company, whereby the Company's share capital may increase with a maximum of SEK 1,055,620.75 from SEK 1,349,927.93 to SEK 2,405,548.68 and with a minimum of SEK 837,216.49 from SEK 1,349,927.93 SEK to SEK 2,187,144.43 [11]. A condition for completion of the Offer is that the interest is at least SEK 140 million.

In connection with the Offer, the Board of Directors of Nordic Iron Ore has requested and received approval[12] for admission to trading on NASDAQ OMX First North. The expected first day of trading is February 16, 2012. Bengtssons Tidnings AB, Kopparberg Mineral AB, Arcelon Mineral AB, Christer Lindqvist (through company) and some minor shareholders, representing 79.3 percent of the shares and votes in the Company have each pledged not to, any earlier than 12 months from the first day of trading of the Company’s shares on NASDAQ OMX First North, without the prior written consent of ABG Sundal Collier in each case, dispose shares in the Company. In addition, Nickel Mountain Resources AB (publ), with 3.6 percent of shares and votes in the Company has entered into the same undertaking for a period of 3 months.

ABG Sundal Collier is Lead Manager and Bookrunner in connection with the Offer. Avanza Bank is Retail Selling Agent. The law firm Bird & Bird is legal advisor to the Company and has, together with Cederqvist law firm, acted as legal advisor to the Company in connection with the offer.

Prospectus
Prospectus and application forms may be obtained from ABG Sundal Collier (www.abgsc.se), Nordic Iron Ore (www.nordicironore.se) as well as for customers in Avanza on www.avanza.se.

Timetable
Publication of prospectus:                                February 1, 2012
Application period for the public:                       February 2-14, 2012 (3 PM CET)
Application period for institutional investors        February 2-15, 2012 (3 PM CET)
Expected first day of trading:                            February 16, 2012

For further information, please contact:
Christer Lindqvist, president and CEO of Nordic Iron Ore, tel +46-70-591 0483
Lennart Eliasson, CFO of Nordic Iron Ore, tel +46-70-640 5177

Important information
This press release does not constitute an offer for sale of shares of Nordic Iron Ore (the "Shares") in Australia, Canada, Hong Kong, Japan, New Zealand, South Africa or in the United States. The Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"), or any similar legislation in Australia, Canada, Hong Kong, Japan, New Zealand, South Africa or any other jurisdiction. Accordingly, the Shares may not be offered or sold, directly or indirectly, in the United States of America (as defined in Regulation S of the Securities Act) except in certain transactions exempt from the registration requirements of the Securities Act. Furthermore, until 40 days after the commencement of the offering of any shares, an offer or sale of such shares within the United States by any dealer (whether or not participating in the offering) may violate the registration requirements of the Securities Act if such offer or sale is made otherwise than in accordance with an available exemption from registration under the Securities Act.

No communication or information related to the Shares is directed to persons whose participation in the offer requires additional prospectuses, any amendment of or supplement to a prospectus, registration or measures other than those pursuant to Swedish law. No communication or information related to the Shares may be distributed in any country in which the distribution or the offer requires additional measures as outlined above or violates applicable rules in such country. The subscription for or purchase of Shares are subject to specific legal or regulatory restrictions in certain jurisdictions

This document does not constitute or form part of, an offer to sale or a prospectus in connection with an offer of any Shares. Investors must neither accept any offer for, nor acquire, any Shares to which this document refers, unless they do it on the basis of the information contained in the applicable prospectus published or distributed by the Company. This document does not constitute an offer to sell, or a solicitation of an offer to buy or subscribe for, any Shares and cannot be relied on for any investment contract or decision.

This document has not been approved by any regulatory authority. This document is a press release and not a prospectus and an investor should not subscribe for or purchase any Shares referred to in this document except on the basis of information provided in the prospectus to be published by the Company on its website in due course.

In relation to each member state of the European Economic Area (other than Sweden) which has implemented the Prospectus Directive (each a "Relevant Member State"), an offer to the public of any Shares may not be made in that Relevant Member State, except that the Shares may be offered to the public in that Relevant Member State at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State:

(a) to any legal entity which is a qualified investor as defined under the Prospectus Directive;

(b) to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the Company for any such offer; or

(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of Shares shall result in a requirement for the publication by the Company of a prospectus pursuant to Article 3 of the Prospectus Directive and each person who initially acquires Shares or to whom any offer is made will be deemed to have represented, warranted and agreed to and with the Company that it is a "qualified investor" within the meaning of the law in that Relevant Member State implementing Article 2(1)(e) of the Prospectus Directive.

For the purposes herof, the expression "an offer to the public of any Shares" in any Relevant Member State means the communication in any form and by any means of sufficient information of the terms of the offer according the Shares to be offered so as to enable an investor to decide to purchase or subscribe for the Shares, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State. The expression "Prospectus Directive" means Directive 2003/71/EC (and any amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State) and includes any relevant implementing measure in each Relevant Member State, and the expression "2010 PD Amending Directive" means Directive 2010/73/EU.

In the United Kingdom, the following information in this document is being distributed only to, and is directed only at (i) persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, or (ii) who fall within Article 49(2)(a) to (d) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, or (iii) to whom it may otherwise lawfully be communicated (all such persons together being referred to as "Relevant Persons"). The information in the press release must not be acted on or relied on in the United Kingdom, by persons who are not Relevant Persons. Any investment or investment activity to which the information relates is available only within the United Kingdom to Relevant Persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.

The Shares may not be offered or sold, directly or indirectly, in Australia, Canada, Hong Kong, Japan, New Zealand, South Africa or in the United States.


[1] The Mining Inspectorate’s decision to grant a mining concession for Håksberg has not yet become final since the decision has been appealed by local residents in the area. The matter will be decided by the Government. The Company sees no reason that the Government would not confirm the Mining Inspectorate’s previously announced decision.
[2]   The Mining Inspectorate’s decision to grant a mining concession for Håksberg has not yet become final since the decision has been appealed by local residents in the area. The matter will be decided by the Government. The Company sees no reason that the Government would not confirm the Mining Inspectorate’s previously announced decision.
[3]   More detailed information on assumptions and calculation methods for the PEA is found in the prospectus.
[4]   The estimated net present value has been adjusted down with SEK 52 million (USD 8 million) in comparison with the net present value that was presented in a press release on December 5, 2011. The adjustment is due to a calculation error, where parts of the investments towards the end of the life of mine where not included.
[5]   Dmt=dry metric tonnes.
[6]   The costs related to the Offer, charged to Nordic Iron Ore, primarily consists of provision based fees to the Company’s financial advisor, costs related to the Company’s auditors and lawyers as well as costs related to printing. Total costs are estimated to a maximum of around SEK 11 million.
[7]   Provided that the distribution requirement for First North is fulfilled.
[8]   Expenses relating to the Offer to be charged Nordic Iron Ore consists mainly of commission fees to the Company's financial advisor, and costs for the Company's auditors, lawyers and print and is expected to reach a maximum around SEK 11 million.
[9]   At the lowest point of the price range.
[10] At the highest point of the price range.
[11]  For a shareholder who choose not to subscribe in accordance to this Offer, a dilution effect of 38-44 percent will arise.
[12]  Provided that the distribution requirement is fulfilled.

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