Nordic Iron Ore AB Interim Report Q2, April-June 2024

Second quarter, 1 April – 30 June 2024

• Sales amounted to SEK 0 million (0)
• Earnings after tax amounted to SEK -4.0 million (-2.8)
• Investments amounted to SEK -0.3 million (-0.5) during the quarter
• Earnings per share before amounted to -0.10 SEK (-0.08)
• Cash and cash equivalents amounted to SEK 118.5 million (1.0) on June 30, 2024

First half-year, 1 January – 30 June 2024

• Sales amounted to SEK 0 million (0)
• Earnings after tax amounted to SEK -7.0 million (-5.5)
• Investments amounted to SEK -0.6 million (-0.7) during the period January-June
• Earnings per share before and after dilution amounted to -0.19 SEK (-0.15)

Significant events during the second quarter 2024

• Nordic Iron Ore AB entered agreements with the majority of its lenders to set-off commitments. All lenders except Kopparinvest AB, Bizcap AB and Lubrica Equity AB undertook to offset their loans and accrued interest in the capitalisation completed in July 2024. Kopparinvest AB, Bizcap AB and Lubrica Equity AB instead extended their outstanding loans of a total of SEK 8.0 million plus also accrued interest for Kopparinvest AB until September 30, 2024 on the same terms as before, however the company has repaid these outstanding loans later during the second quarter.
• Nordic Iron Ore and Cargill have previously entered into a financing agreement which was announced on July 12, 2023 and an amendment agreement which was announced on April 26, 2024 due to the UDI Act that requires notification in the case of certain foreign direct investments. The authority ISP (“Inspektionen för Strategic Products”) announced that they will not take any further action in relation to Cargill’s application, i.e. there is no obstacle for Cargill to own more than 10% of the shares in Nordic Iron Ore.
• Nordic Iron Ore successfully completed a directed share issue of approximately SEK 163 million before transaction costs. The subscription price for the shares in the directed share issue amounted to 5.3 SEK per share and was determined through a book building procedure led by ABG Sundal Collier AB.
• At the company’s Annual General Meeting, Anders Bengtsson, Pierre Heeroma and Leon Davies were elected as new Board members. Nordic Iron Ore’s Board now includes Bengt Nilsson (Chairman), Tomas Olofsson, Gösta Bergman, Tobias Hansson, Anders Bengtsson, Pierre Heeroma and Leon Davies.

Significant events after the period

• An Extraordinary General Meeting approved the Board’s decision from June 19, 2024, to make a directed rights issue of a maximum of 5,229,704 shares by way of set-off of outstanding loans from Bengtssons Tidnings AB, Ludvika Holding AB and Ronne Hamerslag, as well as through cash payment from Jonas Bengtsson.

CEO comments

Dear shareholder,

During the quarter, we were able to successfully complete a decisive capital raise which, second only to the agreement with Cargill Metals, constitutes one of the company’s most important milestones to date. Through a directed issue, the company received gross proceeds of SEK 163 million before transaction costs, proceeds that will be used to plan in detail the construction of the mine, expand exploration in the area and start building an organization for the future. We are extremely happy about the trust we have received from both Swedish and international institutional investors because this funding takes us a big step closer to the construction of a mine with a green profile at Blötberget.

Through a book building process led by ABG Sundal Collier, we were able to make a directed share issue at the end of the quarter, which raised gross proceeds of SEK 163 million before transaction costs. A number of new reputable international and Nordic investors participated in the targeted issue, including Cargill and Svelland Capital.

Through the rights issue, approximately SEK 31 million of the outstanding loans were set-off and of the remaining net proceeds approximately SEK 9 million were used to repay loans and interest that was not set-off. The company is now debtfree, which provides a stable financial basis for continued work. The company can now significantly increase the pace of preparatory work ahead of the start of construction of the mine and expand exploration of the area around Blötberget. Important work ahead includes to update our so-called Bankable Feasibility Study (BFS) which will provide important information to investors and lenders in connection to us securing Project Financing in order to activate the environmental permit and begin construction of the mine. The company has now initiated a recruitment process to build the necessary organization while we also look for suitable work premises.

The company has continued to work on updating and ensuring the environmental permit. As early as 2023, we made an application to the Land and Environmental Court regarding extended working time for water operations. Since then we have answered and made supplements to the court based on the referral statements which were received in two separate referral rounds. We still have hope that we will get a positive ruling from the court during the third quarter or at least the current financial year. The time required for the court’s handling of the company’s application may soon pose a problem for our continued planning and to fulfil the updated time plan. The company has therefore requested the court to decide the case in the near future. In the end, the company expects to get all permits needed to perform planned activities. Some smaller changes to the environmental permit do not require consideration by the court and those that have been completed have all been approved by the County Administrative Board and Ludvika municipality. No new cases were closed during the quarter.

Updated time plan

The plan for the coming year is to start up BFS-work in order to complete this work by the second quarter of 2025 and in parallel carry out the planned exploration program so that potential new assets can be included in the BFS. We aim to secure Project Financing by the second half of 2025 and to then activate the environmental permit and start construction of the mine at the end of 2025. Current construction and lead times for equipment indicates earliest start of mining during 2028. Production then gradually increases to an expected annual volume of approximately 1.6 million tonnes of ultra high-grade iron ore concentrate. Such iron ore concentrate is an important component in order reduce the CO₂ intensity throughout the steel supply chain. The time plan assumes that the Land and Environmental Court approves the application for the extension working time and that there are no permit changes.

Continued exploration

The completed capital raise means that we can increase our ambitions in the exploration of the area around Blötberget. We have previously presented exciting exploration results regarding rare earth elements and are hopeful that an extended exploration and addition mineral studies will make it possible to extract a by-product concentrate with high levels of phosphorus and rare earth elements. It is also possible that this extraction can be done from existing sand reservoirs from previous mining operations. These important metals can form a future complement to the company’s iron ore products. Conducted magnetic measurements suggest that the mineralization in Blötberget continues in a north-easterly direction as well as below the identified mineral resource which makes these areas very interesting for continued exploration. If exploration is successful in these areas we are hopeful to identify an additional 35 million tonnes in addition to today’s assets in Blötberget.

Finally, I would also like to thank Jonas Bengtsson for his contribution to the Board and welcome newly added Board members Anders Bengtsson, Pierre Heeroma and Leon Davies. Through these new additions we have added additional competence to the Board. We have an exciting time ahead and I look forward to keeping you updated on our progress.

Ronne Hamerslag
CEO
Nordic Iron Ore AB (publ)