Financial development

Second quarter, 1 April - 30 June 2023

  • Sales amounted to SEK 0 million (0)
  • Earnings after tax amounted to SEK -2.8 million (-3.2)
  • Investments amounted to SEK -0.5 million (-2.0)
  • Earnings per share before and after dilution amounted to -0.08 SEK (-0.09)
  • Cash and cash equivalents amounted to SEK 1.0 million (4.3) on June 30, 2023.

First half-year, 1 January – 30 June 2023

  • Sales amounted to SEK 0 million (0)
  • Earnings after tax amounted to SEK -5.5 million (-4.9)
  • Investments amounted to SEK 0.7 million (4.3)
  • Earnings per share before and after dilution amounted to -0.15 SEK (-0.13)

Significant events during the second quarter 2023

  • In order to strengthen working capital, the company extended its credit facilities with SEK 3 million with the company’s two largest shareholders Bengtssons Tidnings AB and Ludvika Holding AB. The loan extension has the same terms as prior loans. The credit facilities thereby amounted to a total of SEK 24.5 million.
  • Exploration activities conducted by Nordic Iron Ore have shown promising results with high grades of rare earth elements (“REE”) within and in close proximity of the iron ore at the Blötberget mine. A recently performed exploration campaign, in which older drilling samples were analysed, confirmed high grades of REE. The total rare earth elements grade amounts to a maximum of 6,574 ppm (0.66%). Nordic Iron Ore will proceed with additional testing in order to improve understanding of the extent of REE mineralization.
  • Nordic Iron Ore AB prolongs short-term loans of SEK 24.5 million with the company’s three largest shareholders and a former board member. The repayment period has been prolonged by 1.5 months and the loans are now due for repayment on November 15, 2023.

Significant events after the period

  • Nordic Iron Ore and Cargill Metals entered a collaboration agreement through which Cargill Metals undertakes to purchase 25 Mt of high-grade iron ore concentrate from the Blötberget mine in Dalarna, Sweden. In addition to the supply agreement, the collaboration includes conditional funding commitments from Cargill, in total amounting to SEK 307 million. The supply agreement is estimated to generate SEK 35 billion in total revenue during an estimated period of at least 15 years of production.

CEO comments

Dear Shareholder,

Intensive work enabled us to secure a long term supply contract, after the period, for the company’s future production of iron ore concentrate. The agreement with Cargill Metals is a true milestone for Nordic Iron Ore, in which Cargill Metals undertakes to purchase 25 Mt of high-quality iron ore concentrate, an agreement valued at SEK 35 billion in total sales during at least 15 years’ production. Having sold the future production from Blötberget means that we now can initiate development of Blötberget into a modern, electrified and green mine.

Nordic Iron Ore has worked intensively for a long time to secure a long-term supply contract and an investor that has both financial strength and industrial expertise, which Cargill Metals clearly has. The supply agreement means that Cargill Metals undertakes to purchase 25 Mt of high-quality iron ore concentrate from the company’s mine in Blötberget which values the contract ot SEK 35 billion based on the prevalent market price and exchange rates at the time of signing. As part of the collaboration, Cargill Metals has also made a conditional funding commitment of SEK 307 million, through which Cargill Metals initially will invest SEK 60 million in a directed issue and thereafter its pro rata portion of the capital required for the construction of the Blötberget mine, up to a maximum of USD 23 million (approximately SEK 247 million).

Work on the directed issue, in which Cargill Metals undertakes to invest SEK 60 million, is ongoing in order to secure additional participation from other external investors. Once the directed issue is completed we are planning to carry out a preferential rights issue of at least SEK 50 million.

During the quarter the company has continued to work on the Environmental Permit has continued its dialogue with the County Administrative Board concerning clarification of certain terms in the Environmental Permit and handle identified changes. Additionally we have also made an application to the Land and environmental court for an extended working time regarding water operations. To summarize, the company continues to work on securing and updating the Environmental Permit in order to meet requirements of our operations.

A lot of the infrastructure is already available through close access to the grid and the railway that will transport the iron ore concentrate to Oxelösunds harbour. Swedish electricy, electrical equipment and rail access to harbour are important reasons for why Nordic Iron Ore will be able to produce iron ore with exceptionally low CO₂ emissions, corresponding to only a few kilos of carbon dioxide equivalents per tonne iron ore concentrate.

Important preparations remain before actual construction of the new mine can begin. Through the announced rights issues we will shortly accelerate strengthening of the organization, both through recruitments and consultants, and secure agreements with partners and suppliers to complete necessary construction and development planning.

Our goal remains to initiate iron ore mining late 2026 but it will require intensive and hard work during coming years to realize that goal. I look forward to keeping you posted on our progress and challenges of this exiting journey.

Ronne Hamerslag
CEO
Nordic Iron Ore AB (publ)

For additional information, please contact:
Ronne Hamerslag
Verkställande Direktör, Nordic Iron Ore AB
Telefon: 0240 88 301
E-mail: ronne.hamerslag@nordicironore.se

About Nordic Iron Ore
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 high quality. For more information, see www.nordicironore.se.

Nordic Iron Ore’s shares are listed at Nasdaq First North Growth Market. Wildeco is the company’s Certified Adviser.

This information is information that Nordic Iron Ore is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 2023-08-24 11:00 CEST.

Attachments
Nordic Iron Ore Interim Report Q2 2023

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