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127 June 2014
Company Update
Capital Market Presentation, Stockholm 2014-10-21
227 June 2014
Nordic Mines – a snapshot
Work underway to restart
operations at Laiva
Targeting positive EBITDA
from Laiva within
6-12m from restart
– at today’s gold prices
Opportunity for
further exploration
Significantly strengthened
finances following recent SEK
152m rights issue
Operational adjustments
reflect a more conservative
approach
To date Short-term target Long-term targetNow
Optimise production
and operations
– focus on cash flow
generation
327 June 2014
Tom Söderman
General manager,
Laiva mine
Jonatan Forsberg
CFO
Peter Finnäs
Exploration manager
Peter Kuiper
Development
manager
Nordic Mines management
Thomas Cederborg
CEO
427 June 2014
Owners of a gold mine in Laiva, Finland
• The Nordics especially advantageous for mining
companies
Politically
Logistically
Industrially – Atlas Copco, Sandvik, Metso, Outotec…
Finnish mining conditions ranked #1 (The Fraser Institute)
• Strong mining/metallurgical cluster around Laiva
E.g. Rautaruukki in Brahestad
• Total capex to date: SEK 941m
Processing plant: SEK 724.1m
Exploration: SEK 216.9m
Total capital raised: approx SEK 2 064m
Laiva
527 June 2014
Mineral resources at Laiva
• The new mineral resource classification is restricted to Indicated (green) and Inferred (brown)
South Pit
North Pit
Classification Tonnes Grade (Gold g/t) Gold kg Troy ounce gold
Indicated 15.420.000 1.49 23.017 740.000
Inferred 3.156.000 2.28 7.154 230.000
627 June 2014
2010 2014201320122011
History of the Laiva project
1980
1980:
Amateur geologist
Pentti Jämbäck
discovers Laiva
Spring 2010:
Nordic Mines
initiates
constructionNov 2011:
Production
starts
Feb 2012:
First gold
delivered
Jul 2013:
Reorganisation
initiatedSummer
2013:
Mining
stopped
Apr 2014:
Production
stopped
Oct 2014:
Work initiated
to resume
production
727 June 2014
What went wrong?
Construction
• Delays
• Cost overruns
Mine
• Complex mineralisation
• Lower-than-expected grade
Targeted 1.6 g/tonne, reached 1.0-1.1 g/tonne
Processing plant
• Failure to reach adequate throughput
Design capacity at 250 tonnes/h
Financials
• Financial plan was not sustainable – led to
reorganisation in July 2013
827 June 2014
Today – significantly improved finances enable restart of Laiva
• Rights issue of SEK 152m successfully closed
in September 2014
• Net proceeds of 127m – rights issue aiming at funding
the Laiva restart
• Agreement with creditors
Debt write-down from EUR 45.1m to 12.5m
• Agreements with non-secured creditors (suppliers)
Finland: 90% haircut
Sweden: 90% haircut
• All conditions associated with the reorganisation have
been fulfilled
Financial effects:
• Debt write-down by approx 70-75%
• Balance sheet strengthened by approx SEK 565m
• Liquidity to restart operations at Laiva
927 June 2014
Adjusted strategy based on more conservative approach
Construction
• Bulk of capex already completed – only minor items remain
Mine
• Adjusted mining plan
• Updated mineral resource and preliminary economic
assessment by SRK Consulting
• Adaptations to the complex mineralisation
Different and improved mining technique developed with SRK
Processing plant
• Efficiency improvements to availability and throughput
Finances
• Updated financial plan
1027 June 2014
Key assumptions:
• Gold price and FX rates at current levels
• Production rate of 1.8m tonnes per year
• Average grade of 1.3 g/tonne
Significant reductions in cost structure expected
• Historical high cost levels due to disruptions
associated with ”starting from scratch”
Delays and disruptions in construction process
Consultant fees to address ramp-up issues
• Different and improved mining technique leads to
increased output
Positive EBITDA for Laiva expected
within 6-12 months of restart
1127 June 2014
Milestones to restarting Laiva and reaching profitability
• Key re-staffing and recruitments
• Board decision on focused investments to
optimise processing plant
• Key equipment orders
• Updated mining plan and financial calculations
• Board decision to resume operations
• Restart of mine
• Recruitments to complete re-staffing
• Restart of process plant
• Ramp-up
According to plan, restart of Laiva in
winter/spring 2015
1227 June 2014
Risks associated with restart and ramp-up
Operational
• Reaching design capacity
• Key recruitments
• Disruptions in mining or process plant
Financial
• Cost overruns
• Liquidity
• Gold price
• FX rates
• [Sensitivity analysis]Risks lower today than at initial ramp-up
1327 June 2014
The Nordic Mines share
Share price (SEK) 0.027
No. of shares (m) – excl. dilution 5,403
Market Nasdaq OMX Stockholm, Small Cap
Ticker NOMI
ISIN SE0001672809
At the close of October 15th 2014
* Does not take into account subsequent changes including SEK 152m rights
issue or SEK 440m debt write-down
Equity 159.4
Net interest bearing debt 419.1
Total assets 820.4
Balance sheet items as of June 30th (SEKm)*
No. of shares – incl. dilution 6,140
Market cap (SEKm) – incl. dilution 165.8
1427 June 2014
Key focus areas
Now:
• Reaching milestones to restart Laiva in winter/spring 2015
• Implementing adjusted, conservative strategy
• Ramping up to positive EBITDA from Laiva in 6-12 months
Mid-term:
• Cash flow generation
• Optimising operations and production
Long-term:
• Cash flow generation
• Possibility for additional exploration when stable, profitable
production reached
1527 June 2014
Thank you!
1627 June 2014
Appendix
1727 June 2014
Lenders
• Final agreement
– Debt write down from EUR 45.1m to EUR 12.5m
– One-off cost of EUR 2.5m to pay accrued interest and other costs related to current debt
– Issue of warrants in Nordic Mines to lenders (corresponding to the higher of 12% of outstanding shares or EUR 2.5m)
– Remaining debt of EUR 12.5m with maturity of five years
Suppliers
• Composition plan
– full cash payment of receivables up to EUR 1 000 and 90% hair cut on excess claims
Funding
• SEK 152m rights issue
Terms of the finalised reorganisation
Significant support from all stakeholders received
1827 June 2014
Gold price development
0
200
400
600
800
1000
1200
1400
1600
1800
2000
16/10/2009 16/10/2010 16/10/2011 16/10/2012 16/10/2013 16/10/2014
Gold, USD Gold, EUR
Start End High Low
5 year
change
5 year
CAGR
∆ from
peak
∆ in
2013
∆ in
2014
USD 1051 1241 1889 1030 18% 3% -34% -28% 3%
EUR 706 971 1382 697 37% 7% -30% -31% 11%
1927 June 2014
Efficiency improvements in processing plant
• Improved throughput
– Pre-crushing optimised
– Reduced bottle necks
– Optimized mill utilisation
• Improved availability
– Improved preventive maintenance
– Training of personnel
– More spare parts in stock
• Design capacity of 2m tonnes per year within reach
2027 June 2014
Summary of revised business plan
• New preliminary business plan prepared during
autumn 2013
– SRK and KPMG assisted
• Current life of mine of 5-6 years
Modification Factors (Convert Resources to Run-of-Mine)
North South
Operating Cut-off Grade 0.6 g/t 0.6 g/t
Geology / Mining Ore Loss 15% 20%
Dilution 20% 25%
Diluting Grade 0.3 g/t 0 g/t
Engineered Pits – RoM - Diluted
Tonnage Mt Grade g/t Strip t:t
North Ore 5.60 1.27 2.72
South Ore 4.99 1.29 4.14
Total 10.59 1.28 3.39
New mining approach