Mining On Top: Stockholm 2013 26-27 Nov 2013 Nordic Iron Ore update – Christer Lindqvist, Nordic Iron Ore; CEO and President

1. Europe’s next iron ore producer
IntierraRMG - Mining on the Top – Stockholm
10th Anniversary Conference 26-27 Nov 2013
1

2. Agenda
 Introduction



Investment highlights
Financial information
Conclusion
2

3. Nordic Iron Ore at a glance
 Restarting Ludvika Mines
– Blötberget – concession granted
– Väsman field – under further exploration
– Håksberg – concession granted
 A brownfield iron ore project
 Existing rail from mine to deep water port
 Environmental permit expected shortly
 Scoping study shows very attractive ROI
3

4. Nordic Iron Ore - Project Up date
Major Achievements 2013
 New Scoping study Ludvika Mines - double production capacity
 Definite Feasibility Study - Phase 1 Blötberget commenced
 New Financier - State Investment Fund Inlandsinnovation AB
 Increase in mineral resources; + 180%
 LoI Oxelösund Port – secured port alternative
 National Transport Administration – Commenced the rail project
 1st Customer – LoI for coarse fines
 Environmental Court proceedings commenced October
4

5. Our targets
 Production 4.3 Mtpa
 Production start coarse fines:
Q3 2015
 Start new beneficiation plant
Q3 2016
 Concentrate 67% Fe or better
5

6. Solid economics
 IRR 24 per cent
 Pay back period 5.4 years
 At least 15 year life of mine
6

7. Competitive cost level
Competitive cash cost and premium product
Fortescue
USD 76/dmt
/NIO
7

8. Agenda

Introduction
 Investment highlights


Financial information
Conclusion
8

9. One of Sweden’s largest mineralisations
Håksberg:
Indicated 25 mt @ 36%
Inferred 12 mt @ 36%
Väsmans South mineralisation:
Indicated 7 mt @ 39%
Inferred 86 mt @ 38%
Blötberget :
Indicated 30 mt @ 45%
Inferred 10 mt @ 43%
9

10. One of Sweden’s largest iron mineralisations
Håksberg:
Indicated 25 mt @ 36%
Inferred 12 mt @ 36%
3
Väsmans South mineralisation:
Indicated 7 mt @ 39%
Inferred 86 mt @ 38%
Blötberget :
Indicated 30 mt @ 45%
Inferred 10 mt @ 43%
10

11. Expansion potential
75000
MagTot (nt)
65000
55000
Targeting mineral resources
in excess of 300mt
N
S
11

12. Beneficiation plant next to existing railway
12

13. Processing plant and terminal in Skeppmora (Blötberget)
Existing Rail Road: Bergslagsbanan
Processing plant designed for expansion
1) mtpy = million tonnes per year
13

14. Existing logistics – Large Competitive Advantage
 Existing railway from mine to deep
water port
 MSEK 900 (MUSD 130) committed
by government for refurbishment of
railway
 All year ice free port
 Baby Cape/Panamax capacity
 LoI signed with Oxelösund port
14

15. Integrated scaleable project
Development in three phases
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16. Low development risk
 Scalable project
 Experienced team
 Existing mine infrastructure

17. Product price premium
 High quality product
 67% Fe Concentrate
17

18. High quality product
Dannemora (lump)
Dannemora (fines)
Fortescue
Cleveland Cliffs
Rio Tinto
Ferrexpo
Kumba
LKAB (pellets)
Vale
Nordic Iron Ore
Northern Iron
LKAB (fines)
80 %
70 %
60 %
50 %
40 %
30 %
20 %
10 %
0%
Northland Resources
Kaunisvaara
Comparison of average % Fe
BHP
NIO will produce high quality
pellet fines (possibility to
produce sinter fines), expected to
yield premium pricing
18

19. Risk mitigation
Construction risk and process risk greatly reduced due to:
1
Complete DFS before final investment decision
2
Experienced project management team
3
Detailed planning and close monitoring of schedule
4
Focus on cost control and follow up systems
5
Professional procurement with close monitoring of contractors
19

20. Risk mitigation – separate project organisation
Project
director
Exploration
Controller
Procurement &
quality
Economy &
finance
Planning
HSE
Logistics
CEO
HR
Blötberget
Väsman
Production
Marketing
and sales
Environment
Håksberg
Skeppmora
20

21. Project development schedule
- Key milestones
Investment decision, Financing &
Organisational build up
Construction Phase 1
Installation & commissioning
DFS-Phase 1
2013
2014
2015
2016
Beneficiation start
& ramp up
2017-2021
Environmental
permit
B+H
•
Phase 1 Blötberget – viable stand alone project:
•
IRR 18%
•
Cash cost USD 47/dmt (FOB)
•
Pay back 4.3 years
21

22. Agenda


Introduction
Investment highlights
 Financial information

Conclusion
22

23. Attractive economics
Exemple calculation at full production, USD/t
Assumed long term price (62% Fe)
Premium (67% Fe)
Freight
FOB
OPEX*
OH-cost
Financing cost**
Margin
*During the first 2 years OPEX will be higher
** Financing cost should be lower after ≈ 5 years
120
+15
–24
111
-52
-1
-10
48

24. Capex incl DFS and production ramp-up
(Pre financing cost and pre tax)




200
Second fund raise only after production start Phase I
Revenue from Q3 2015
Gradual ramp up of logistics chain
Large part of Capex financed internally - external need MUSD 306
For Phase Ia
Phase I-III
Internally financed
coarse fines
Concentrate
Mt
4.00
150
3.00
100
4.2
3.5
77
126
119
50
0.5
72
25
2015
2016
2017
0.25
14
8
0
2.15
92
75
70
2014
2.00
2018
2019
2020
2021
2014
2016
2017
2018
1.00
1.4
0.6
2015
1.4
2019
2020
2021
0.00
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25. Key figures






Targeting a 4.3 Mtpa operation
OPEX 51.5 USD/t
CAPEX to full production USD 678 million
Pay back period ≈ 5.4 years
NPV (@ 8.0%) USD 952million
IRR 24%mine at

26. Agenda



Introduction
Investment highlights
Financial information
 Conclusion
26

27. Conclusion
1
Large mineralization with
expansion potential
2
High quality product
3
Low development risk
4
Very competitive OPEX
and existing logistics
27

28. Thank you
www.nordicironore.se