Fri, 17 Nov 2017 14:15:16 +0100

Interim Report January – September 2017

  Significant events during the third quarter 2017

  • DMT finalised and released an updated Mineral Resource Estimate, which increased resources by around 15%.
  • The application for an extension of the mining concession in Blötberget was granted by Bergsstaten.

Third quarter, 1 July – 30 September 2017

  • Income amounted to SEK 0 million (0)
  • Earnings after tax amounted to SEK – 2.2 million (–2.0)
  • Investments in the period July - September totalled SEK 3.6 million (0.5)
  • Basic earnings per share were SEK –0.02 (–0. 06)

Third quarter, 1 July – 30 September 2017Interim period, 1 January – 30 September 2017

  • Income amounted to SEK 0 million (0)
  • Earnings after tax amounted to SEK –7.1 million (–6.8)
  • Investments in the period July - September totalled SEK 7.6 million (3.4)
  • Basic earnings per share were SEK –0.08 (–0.19)
  • Cash and cash equivalents on 30 September 2017 amounted to SEK 5.6 million (1.9)
  • There are no significant events after the end of the period to report.

  Significant events after the end of the period

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

Mine Design Nears Completion

During the third quarter we continued with advancing the feasibility study with the mine design phase. The main mine design and production scheduling design for the mine, are expected to be completed in December. This process has taken longer than expected as the geological structures highlighted in the block models have required us to examine more than one mining technique, identify the OPEX costs and then optimise the design. This will provide the feasibility study with a credible basis for cost evaluations in the feasibility study economic model.

We are also pleased to successfully have our application for the NE extension to the mining concession for Blötberget approved and this is now formally incorporated into the latest MRE.

Regarding the mining concession application for South Väsman, further discussions have been held between Länstyrelsen and Bergsstaten, but it is hoped that any outstanding matters will be resolved in the near term.

NIO has been working with partners on the applications for approval by the EU to start projects for the development of advanced geological exploration techniques in the region of Ludvika mines; including deep penetration magnetic anomaly measurements, which will be aligned with existing NIO data in order to develop new and accurate instrumentation. These programmes form part of the Horizon 2020 programmes and will ultimately assist NIO with our medium and longer term development plans. The two projects are ERA-MIN 2 - ‘AMTEG’ and Smart Exploration- EAGE project under The Department of Earth Sciences at Uppsala University. Both projects are highly prestigious and will provide significant advantage in data collection and interpretation. 

The Logistic group, consisting of Rail Cargo (RC); the waggon supplier, Innofreight; the port authorities, Oxelösunds hamn and Swedish rail Authorities, Trafikverket continue to develop the final designs for the logistics solutions, particularly relating to the railing solutions, port layout, wagons design and wagon unloading facilities.

Markets

Despite some prediction of iron ore price collapses I have always maintained that the sustainable price for iron ore is likely to be in excess of $65/t for the near term and that the average price of iron ore for 2017 is likely to be over $70/t for the year. So far that would appear to be the case. Changes in the Chinese economic policies continue to haunt the markets, though it does tend to be based on negative assumptions hard to justify.

However, the good news for NIO has been the price premium for quality iron ores. These premiums have remained high now for a reasonable period of time this year, driven primarily by Chinas apparent drive towards reducing pollution and industrial environmental impact. In order to make a dent in the pollution China is closing a number of older steelworks and is also trying to improve the quality of the raw materials fed to the blast furnaces. This and, what is seen as a long term demand from other Asian iron ore importing countries, such as Japan, Korea and India, has driven quality premiums upwards. Many of the ore suppliers and analysts believe that this is a long term feature. Based on recent prices this would add between $15-$25/t to the price of NIO over that of the main IODEX 62%Fe ores.

Imports of iron ore to China recently reached record month levels, suggesting that higher quality ores are replacing many of the lower quality/higher cost Chines domestic supply.


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.

Q3 2017