Tue, 13 Feb 2018 13:20:10 +0100

Year-end Report January – December 2017

Significant events during the fourth quarter 2017

  • The Mining Inspectorate granted the mining concession for the South Väsman Field
  • A draft report was presented on the mine design

Fourth quarter, 1 October – 31 December 2017

  • Net income amounted to SEK 0 million (0)
  • Earnings after tax amounted to SEK -2.0 million (-1.9)
  • Investments during the period October – December totalled SEK 1.2 million (0.7)
  • Basic earnings per share were SEK -0.02 (-0.05)

The whole year, 1 January – 31 December 2017

  • Net income amounted to SEK 0 million (0)
  • Earnings after tax amounted to SEK -9.1 million (-8.7)
  • Investments during the period January – December totalled SEK 8.8 million (4.1)
  • Basic earnings per share were SEK -0.09 (-0.24)
  • Cash and cash equivalents on 31 December 2017 amounted to SEK 2.4 million (1.0)

Significant events after the end of the period

  • There are no significant events after the end of the period to report.

Mine Design and provisional “reserves” defined 

During the fourth quarter we completed the mine design and have the preliminary (non JORC compliant) mineable reserves of 35Mt. The final mineable reserves will be confirmed towards the end of the feasibility study when the final specifications of the equipment have been made and the quotations completed. The production schedule will be detailed during the early New Year so that the detailed specifications for the process plant can be calculated. The production schedule will also confirm the output from the mine and the product specifications. This will reinforce the credibility of our calculations and estimations for revenues to be received during the life of mine.

Nordic Iron Ore's application for a mining concession relating to iron ore resources in the southern parts of Lake Väsman has been granted by the Mining Inspectorate. The decision is an important step in Nordic Iron Ore's preparatory work for the resumption of iron ore production in the Ludvika mines. This supports NIO’s plans for a 3 Phase development of the resources in the Ludvika locality and allows NIO to progress to the next step expansion of the mineable resources in the region.  

The first of the EU sponsored research programmes that NIO is a member of, Smart Exploration; formally started on December 1st 2017 after the application for EUR 5.4M was granted. The project is headed by Uppsala University and NIO joins 27 other partners, including Ludvika Kommun, as part of the Horizon 2020 programme. NIO is hosting a venue where advanced exploration equipment and techniques will be demonstrated. This work will ultimately provide NIO and its staff with training in advanced exploration techniques and access to data that will be highly advantageous to the (re)development of its mines.

The second project, Leading Edge exploration is a complimentary exploration programme using alternative equipment and should provide a wider range of information over the local region. This project has been granted funding and is expected to start in May 2018.

The Markets

The markets for iron have continued to surprise many of the analysts by remaining relatively high in recent months, largely above $70/t for the IODEX 62%Fe ores. However what is clearly happening now, driven largely by China’s recent policy to reduce industrial emissions and pollution across the country, is that there is a “disconnect” between the low quality iron ores (i.e. < 63%Fe) and those iron ores above 65%Fe. This is clearly demonstrated by the rise in the premiums paid for the higher quality ores as China and the rest of Asia close mines and steelworks that produce or use lower quality ores and coals. The net outcome of this is reflected by the increase in the indices for 65%Fe ores, which currently suggests that there is a premium of between $4-6/tonne/1%Fe content. This means that according to the indices NIO products (average 69%Fe) could command a $24-42/t premium over standard ores delivered into China.

The policies of China would support this premium being maintained at a relatively high level for some years, as it is clear that there are very few high quality iron ore mines in the development pipeline, reflecting a strong opportunity for NIO to take advantage.

Whilst there has been little in the way of interest from investors in iron ore projects in recent years, there is little doubt that the market is beginning to awaken and there are some signs that investors may be prepared to return to the high quality iron ore sector.

For further information please contact:

Paul Marsden Managing Director
phone: +44 7776 180 988

paul.marsden@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.

Q4 2017