Thu, 18 Feb 2021 08:00:00 +0100
Year-end Report January – December 2020
Significant events during the fourth quarter 2020
- The Blötberget optimisation study was reported by Whittle Consulting.
- Private placement of shares to Whittle Equity
Fourth quarter, 1 October – 31 December 2020
- Net income amounted to SEK 0 million (0)
- Earnings after tax amounted to SEK -2.1 million (-2.8)
- Investments during the period October – December totalled SEK 4.9 million (0.1)
- Basic earnings per share were SEK -0.07 (-0.14)
The whole year, 1 January – 31 December 2020
- Net income amounted to SEK 0 million (0)
- Earnings after tax amounted to SEK -9.0 million (-11.2)
- Investments during the period January – December totalled SEK 7.3 million (12.1)
- Basic earnings per share were SEK -0.29 (-0.55)
- Cash and cash equivalents on 31 December 2020 amounted to SEK 5.2 million (13.0)
Significant events after the end of the period
There were no significant events after the end of the period.
A different – yet successful – year for Nordic Iron Ore
Things don't always turn out the way you expect. The year had hardly begun when the pandemic changed the conditions. Work that required physical interaction had to be postponed, and the stock market fell sharply. At the same time, this created a good opportunity for Whittle Consulting to conduct an optimisation study before we continued our efforts to raise capital.
The optimisation study gave us not only extensive verification of the feasibility study but also a basis on which to build as profitable a mine as possible. The work consisted largely of extensive data simulations that were carried out in Australia using Whittle’s in-house software. This was thus very “COVID-19-friendly” since the consultants did not need to travel to Sweden.
We are very satisfied that we commissioned the study. When Whittle Consulting presented the outcome of the optimisation study at the start of the fourth quarter, the profitability figures for the project had improved significantly. Relative to the feasibility study, the net present value increased by more than 50% to USD 172 million, using the same underlying assumptions.
Whittle Consulting noted early that the Company has a very low market value relative to the project value and expressed interest in performing the entire study in exchange for shares. The Board of Directors thus opted to pay the entire amount in shares, which is why Whittle has become the Company's third-largest shareholder at the end of the year at just under 7 per cent ownership. It is gratifying that Whittle has shown its faith in the project’s potential in this way given its considerable experience in mining projects,
It is never easy to predict the market. At the start of the year, we witnessed a sharp drop in prices due to the outbreak of the coronavirus. Problems like these will naturally pass, but that the market would swing so quickly to a sharp price increase was a pleasant surprise. The price for ore with 62% iron content went down during the spring but then showed strength during the remainder of the year. China emerged from its recession early, but there were some problems with deliveries from Brazil and Australia. The price development in China for ore with 62% iron content is presented below:
Source: Trading Economics.com
However, the downturn caused by the pandemic did reduce demand for iron ore, and since steel manufacturers had low capacity utilisation, demand for high-grade ore fell, which resulted in a significant drop in the premium for ore with more than 62% iron content. This trend was reversed, though, in the last quarter when the premium began to rise again. In January 2021, the premium reached USD 8/tonne per percentage point exceeding 62%. This corresponds to a price in China of more than USD 200/tonne for products of NIO’s quality.
Ludvika Mines is the umbrella term for Blötberget, Väsman and Håksberg. We are planning to start with Blötberget and then expand into Väsman and Håksberg.
We want to harness the rapid technological development in the mining industry and create a modern, environmentally friendly mine that uses electricity-based operations to the greatest extent possible. Here, we are aided by the fact that the Swedish mining industry lies at the forefront of and is driving the development together with the Swedish suppliers of mining equipment.
We have a considerable advantage in that we are building a new mine from scratch. Instead of having to modify an existing mine with old solutions, we can design a fully modern mine without having to compromise.
Overall, I am looking to the future with optimism, and once the financing is secured, we will be able to quickly break first ground.
For further information please contact:
Lennart Eliasson Managing Director
phone: +46 70 640 5177
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. The Company has all the necessary permits in place for the mine in Blötberget and will be able to produce iron ore of extremely high quality.
For more information, see www.nordicironore.se.
Nordic Iron Ore’s shares and warrants are listed at Nasdaq First North Growth Market. Wildeco is the company’s Certified Adviser (firstname.lastname@example.org tel +46-8-545 271 00).
This information is required and provided by Nordic Iron Ore AB (publ) under the EU Market Abuse Regulation. The information was provided through the agency of the contact person set out above for publication at the date and time set above.NIO Q4 2020