Fri, 08 May 2015 16:58:03 +0200

Year-end Report January – December 2014

Significant events during the fourth quarter 2014

  • Test enrichment on a pilot scale of about 20 tonnes of crude ore from Blötberget by GTK in Finland revealed very good enrichment properties.
  • In order to safeguard the Company’s ability to ride out the very weak economic cycle for iron ore, it was decided to initially complete only the most essential parts of the feasibility study.
  • Convertible loans were converted to shares via an offset issue. Liabilities of SEK 13,617,500 were thereby converted to equity capital and 666,875 new shares were issued.

Fourth quarter, 1 October – 31 December 2014

  • Income amounted to SEK 0 million (0)
  • Earnings after tax amounted to SEK -3.1 million (-3.7)
  • Investments during the period October – December totalled SEK 14.5 million (4.3)
  • Basic earnings per share were SEK -0.23 (-0.33)

The whole year, 1 January – 31 December 2014

  • Income amounted to SEK 0 million (0)
  • Earnings after tax amounted to SEK -22.5 million (-15.8)
  • Investments during the period January – December totalled SEK 29.8 million (14.4)
  • Basic earnings per share were SEK -1.88 (-1.38)
  • Cash and cash equivalents on 31 December 2014 amounted to SEK 19.7 million (6,0)

Significant events after the period end

  • The results of test enrichment on a pilot scale of crude ore from Blötberget were announced. The tests show that NIO will be able to produce a concentrate with a single iron content of approximately 70%.

Key ratios (Group)

 Amounts in SEK 2014   
Oct - Dec
2013  
Oct - Dec
2014    
      Jan - Dec
2013    
       Jan - Dec
The group
Equity/asset ratio (%) 81,60% 67,60% 81,60% 67,60%
Earnings per share -0,23 -0,33 -1,88 -1,38
Equity per share 6,82 4,80 6,82 4,80
Quick ratio (%) 208,07% 45,31% 208,07% 45,31%
No of shares 14 510 712 11 492 738 14 510 712 11 492 738

Comments from the CEO

Successful tests and a difficult market situation

The market for iron ore continues to be under pressure. This is due mainly to the oversupply of low-grade iron ore, mainly from Australia, which continues to affect prices. In December Northland went bankrupt, which is naturally most unfortunate, mainly for the local community, which has had high expectations of the growth and security that a mining project normally brings. The absence of prospects for further operation of the mine also demonstrates how important logistics are for an iron ore project.

Northland is not alone, however; for example, many high-cost mines in West Africa, Australia and Canada, which produce products that have a low iron content, have been forced to close and by and large all iron ore projects in West Africa and Canada are on hold. These projects are characterised by very large capital requirements for investments in logistical solutions for transporting the ore to a port. In the prevailing situation only cost-effective projects with low investment costs will be able to attract financing.

One of the biggest comparative advantages that our project has is simple and effective logistics, with a rail link from the mining area to a functioning bulk port in Oxelösund – an advantage that is hard to beat. The second advantage, as the pilot tests in Finland show, is the high product quality that is obtainable with a simple process flow. This results in lower enrichment costs than we had previously anticipated.

The cost of the mine is our biggest single expense, although even here we can see that our earlier calculations continue to hold.

Work on the feasibility study continues apace in those parts of it that are most important for future investors.

I can also note that the current strengthening of the dollar and an expectation of low energy costs are improving the relative competitiveness of our project. There is even a reduction in the geographical disadvantage we face in relation to the Asian markets, since the shipping costs are expected to be low, which partly makes up for the lower price of iron ore.

The prevailing market situation is very challenging; nevertheless, we believe there may be interest on the part of financiers in what is probably one of the world’s best iron ore projects under way. The difference from previous booms is that investors are now generally more careful when evaluating mining projects, and this favours our well-defined project in Blötberget.

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.

Year end report 2014