Fri, 23 Nov 2012 13:00:00 +0100

Interim report January – September 2012

Significant events during the third quarter of 2012

  • An application for an environmental permit was submitted to the Land and Environment Court
  • Drilling campaigns at the Väsman field and Blötberget commenced

Third quarter, 1 July – 30 September 2012

  • Income amounted to SEK 0 million (0)
  • Earnings after tax were SEK -4.7 million (-1.7)
  • Investments during the period July – September amounted to SEK 11.1 million (4.6)
  • Earnings per share, basic, were SEK -0.60 (-0.22)

Interim period 1 January – 30 September 2012

  • Income amounted to SEK 0 million (0)
  • Earnings after tax were SEK -16.8 million (-3.6)
  • Investments during the period January – September amounted to SEK 14.3 million (12.6)
  • Earnings per share, basic, were SEK -2.16 (-0.48)
  • Cash and cash equivalents at 30 September 2012 amounted to SEK 26.4 million (8.4)

Significant events after the end of the period

  • The convertible loan was converted into 3,708,738 new shares, increasing the number of shareholders to 76 in total

Comments from the CEO
During the period, Nordic Iron Ore accelerated is drilling rate in the planned drilling programmes at Blötberget and the Väsman field which commenced in July and August, respectively. The results of the drilling campaigns will form an important part of the feasibility study currently in progress. At the beginning of July, the Company’s crucial application for an environmental permit was submitted to the Land and Environment Court in Nacka regarding resuming mining operations at Blötberget and Håksberg.

Uncertainties still prevail in our business environment due to the economic climate. Declining iron ore spot rates in the summer were caused by seasonal destocking at Chinese steelworks, and the trend was amplified by lower capacity utilisation at European steelworks. However, the spot rate has recovered to high levels and is currently at around USD 120 per dry metric tonne, which can be considered a sustainable level because it corresponds to the cost of a large proportion of the production of Chinese marginal producers. Until the production of these producers is replaced by more cost-efficient iron ore imports, the costs of marginal production will govern the spot market rate. We also note that many experts continue to believe that there are solid long-term fundamentals for a sustained high iron ore price. The price decline in the summer has brought to light important differences between various iron ore projects currently under way. Compared with a lot of them, there are several factors in our favour. We are located in a politically stable country and, in a global perspective, we have a competitive future mining cost.

Plus, we have the obvious advantage of access to sufficient railway capacity. The government’s infrastructure bill was presented at the beginning of October, and included financing for upgrading the railway to Oxelösund, in which the government will invest around SEK 900 million until 2021 inclusive. This further reduces the risk in the project. To sum up, our project is proceeding well. However, the drawn-out financing process in the spring brought about a certain delay, and we now intend to make up for the lost time. Our plan to start up production in the latter part of 2015 remains in place.

Christer Lindqvist, CEO Nordic Iron Ore

För ytterligare information: Christer Lindqvist, VD 0240-88301
                                           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.