Sun, 04 Dec 2011 22:49:00 +0100
Nordic Iron Ore presents positive PEA results on the Blötberget and Håksberg iron ore deposits
Nordic Iron Ore announces the positive outcome of the Preliminary Economic Assessment (PEA) of its brown-field project centred round the reopening of the two mines Blötberget and Håksberg ("the Project") in Ludvika, Sweden.
"The PEA demonstrates that the Project should be financially rewarding, with good operating margins and attractive rates of return, even without additional tonnage from the interconnecting Väsman field", says Christer Lindqvist, CEO of Nordic Iron Ore.
Highlights of the PEA:
- The PEA confirms that the Project, based on made assumptions and defined total mineral resources in Blötberget and Håksberg, is technically feasible and financially positive.
- Using a discount rate of 8%, the Project has a potential net present value (NPV) of SEK 2,959 million (USD 423 million) and an internal rate of return (IRR) of 24% as from the date on which a formal investment decision can be made.
- Subject to securing all relevant permits and financing, the production of iron ore concentrate is forecast to begin in 2015 at a rate of 1.15 Mt per year on a dry basis, increasing to full production by the end of year 2016.
- The Project is estimated to have a 12 year life of mine (LOM) based on current NI 43-101 defined mineral resources (including 38% inferred resources), with up-side potential to better define known occurrences to a higher standard and increase mineral resources.
- Nordic Iron Ore will need to secure financing for the capital expenditures (CAPEX) of approximately SEK 2,368 million (USD 338 million) to first production and revenue.
- Total operating expenditures (OPEX) per dry metric tonne (dmt) concentrate is estimated to average SEK 362/dmt (USD 52/dmt1) during life of mine.
- Thomas Lindholm (QP) at GeoVista was engaged to provide an independent review of both the CAPEX and OPEX figures in the PEA as compiled by Ramböll as well as the financial model, developed by Ramböll and Nordic Iron Ore, which includes presentation of NPV and IRR.
Nordic Iron Ore are encouraged by the PEA results and will now consider the best strategy to secure funding and continue with the Project. The company sees a number of opportunities to expand or redesign the Project to enhance cost efficiency. Such opportunities include the investigation of an accelerated development of the Väsman exploration target in an effort to increase crude ore output and to reduce CAPEX and OPEX per tonne.
Please note that the PEA is preliminary in nature. It includes inferred mineral resources that are considered too geologically speculative to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the Project will be realized as designed and assessed in the PEA.
To read the full pressrelease, please see attached document.
For further information, please contact:
Christer Lindqvist, President and CEO +46-240-88301
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 the ore reserves, primarily through exploration and other studies of the connecting Väsman field. For more information, see www.nordicironore.se.wkr0001.pdf