Northland Operational Update - March 2012
(Thomson Reuters ONE) -
Luxembourg, March 19, 2012 - Northland Resources S.A. (TSX: NAU, OSE: NAUR,
Frankfurt: NPK - "Northland" or the "Company") advises that the Company will
initiate a bi-monthly operational and construction update on its Kaunisvaara
project.
"This is the first in a series of updates that Northland plans to provide on
progress of the Kaunisvaara project," said Karl-Axel Waplan, President and CEO
of Northland Resources S.A. "This is in line with our plan to keep the market
updated with the latest developments and will be in additional to our quarterly
reports. Following the successful settlement of our equity and bond offering, of
a total of USD 675 million, we are now focused on the ongoing construction of
the Kaunisvaara project and the goal to start production at the Tapuli mine in
the fourth quarter of 2012. I am very pleased that Northland is able to maintain
the strong momentum with the Kaunisvaara project, which is indicative of our
committed staff that has made this possible."
* The schedule for Kaunisvaara remains unchanged with the start of production
from the Tapuli Mine during fourth quarter of 2012 and with shipments in
first quarter of 2013.
* The project including Tapuli, construction, partial mining equipment and
ship loader, was at the end of February 46% complete.
* Following the decision to organize the logistics as wholly-owned entities
and to focus on the Tapuli mine, the overall project was at the end of
February 27% complete.
* Construction of the transshipment terminal in Pitkäjärvi has commenced.
* Construction of the Fagernes Terminal in Narvik Port started mid-January
2012 and remains on schedule. The initial piling work has been successful.
* Ship loader has been ordered and will be fully operational in third quarter
of 2013. A preliminary loading solution is being planned and will utilize
existing dock facilities. Shipment will be possible as planned in the
beginning of 2013.
* Per the end of February, Northland had committed USD 803 million of Capex
for its Kaunisvaara project and the Value of Work done was USD 263 million.
Conference Call
On Wednesday March 21, 2012, Northland will host a webcast presentation and
conference call to discuss the details of the Operational Update. The
presentation is scheduled to begin at 4.00 p.m. Central European Time / 11.00
a.m. Eastern Daylight Time/ 9 a.m. Pacific Time Standard Time and will be
chaired by Karl-Axel Waplan, Chief Executive Officer.
A link to the live audio webcast of the conference call, together with
supporting presentation slides, will be available on the corporate
website,http://www.northland.eu/en-us/investor-relations.
Please call about five minutes before the advertised starting time to access the
conference call.
Call-in details:
US/Canada: +1 866 458 4087
Norway: +47 21 51 11 88
Sweden: +46 (0)8 505 598 53
United Kingdom: +44 (0)203 043 24 36
Value of Work* carried out since start of the Kaunisvaara project in 2010. At
the end of February the value amounted to USD 263 million, measured in terms of
actual physical progress based on the documentary evidence of the deliverables
produced / installed. The VOWD is determined by applying the percentage of
physical progress achieved to the current estimated value of the cost of that
item, which is in general the contract value, including any approved changes or
forecast.
Kaunisvaara
Progress at the Kaunisvaara mine site is continuing according to the time plan.
More than 148,000 m(3) of the Tapuli overburden has been removed so far, and the
current average rate is 120,000 m(3) per week. Construction of foundation for
the primary crusher for the Tapuli ore is ongoing and is on schedule to be ready
at the time the crusher is delivered. Construction of the ors sheds are also
progressing well.
All external panels are now mounted on the process plant and the work is
concentrated on the internal design, including foundations for the autogenous
grinding mills, as well as the secondary mills (Vertimills). These and other key
equipment from Metso are expected to be delivered starting second quarter 2012
and are on time. The main items include crusher and mills from Metso.
The work on the excavation and construction for the 130 kV power lines to the
site is now focused on the installations of pylons. Work is slightly ahead of
program. The construction work of the building for the electrical switch-gear
was commissioned and work will start beginning of April 2012.
Starting second quarter of 2012, Northland will receive Caterpillar mining
equipment. An agreement for the ongoing maintenance and repair of the mobile
mining equipment for the Kaunisvaara project is expected to be signed beginning
of the second quarter of 2012.
Northland is in receipt of all necessary exploitation concession and
environmental permits required in order to carry out the first phase of the
Kaunisvaara project. The first phase will comprise the construction of the
necessary phase to ensure the extraction and processing of iron ore and to
produce iron ore concentrate from the Tapuli mine.
Logistics
The current logistics solution includes truck transportation from Kaunisvaara to
Pitkäjärvi for reloading to railway wagons, rail transportation from Pitkäjärvi
to Narvik on the railway track "Malmbanan" and the use of Fagernes Terminal in
Narvik.
Two wholly-owned logistics companies, Northland Logistics AB and Northland
Logistics AS, have been established. Service contracts with logistic providers
to operate overall logistics planning, trucking and port management to be
finalized during second quarter of 2012.
Test for dispensation of 90 tonnes truck is ongoing in cooperation with the
Swedish Transport Authority ("STA"). Field studies of the roads are carried out
by the engineering consultant Vectura.
Finalized land procurement and land rental for the reloading terminal in
Pitkäjärvi. Peab and STA are engaged for the construction works. Construction
works started March 6, 2012. Building permit application for erection works has
been filed with Kiruna Municipality.
The engineering company Norconsult was engaged for Fagernes Terminal design and
project support. The jetty design was finalized and construction is ongoing. The
terminal construction work is progressing according to original time schedule.
Contracts
The total value of commitments made during February 2012 amounted to USD 7
million. The largest commitments during the period are Peab's construction work
in Narvik and Kaunisvaara.
Finances
A revision of the Capital expenditures ("Capex") was carried out in January
2012 in order to reach 4.4 million dmt per annum capacity at end of 2014. The
estimated Capex is USD 875 million, adjusted for revised exchange rates and
additional contingency. The increase compared to the Capex of USD 765 million as
presented in the DFS May 2011 is to be referred mainly to the inclusion of the
logistics solution.
The revised operational expenditures ("Opex") following the update in January
2012 for the Life of Mine operation is estimated to be USD 55.6 per tonne of
concentrate (dry) delivered Free on board ("FOB") to the Port of Narvik, Norway.
Out of the 40% of the costs are related to transportation, of which two thirds
is for trucking, see further details below.
(Mining 33.3%, Process 22.4%, Royalties 0.7%, Truck 27.1, General & Adm. 2.5%,
Rail 8.4%, Narvik Port 2.7%, Contingency 2.0 and Other 1.0%)
Pellivuoma
A third iron deposit, Pellivuoma, is located approximately 18 km west of
Kaunisvaara. It is a fully-owned asset of Northland. Long term, the Company
plans to develop this deposit to extend the Kaunisvaara project's Life of Mine
("LOM") materially, or increase the production or a combination thereof.
A DFS is ongoing, expected to be published end of second quarter of 2012.
Other matters
To be able to have all key staff in place at the start of production, Northland
launched an ad campaign in mid-March. In this initial recruitment phase, the
Company will recruit around 100 employees for various positions. Already before
the ad campaign kicked off for the recruitment process around 3,000 job
applications were received.
Next Operational Update
The Operational Update - May 2012 will be published on May 22, 2012.
Corporate, January 1 - March 15, 2012
March 7, 2012: Northland Completes USD 350 million offering of Senior Secured
Bonds - The Company announces that its subsidiary Northland Resources AB (publ)
has completed the offering of senior secured bonds in an amount equivalent to
USD 350 million.
March 7, 2012: Northland streamlines its management structure ahead of
production start-up in Kaunisvaara - The Company has decided to change its
management organization by appointing a Chief Operating Officer.
February 24, 2012: Northland Publish the Listing Prospectus - The Company has
published a listing prospectus, available at the Company's webpage.
February 23, 2012: Northland Completes USD 325 Million Offering of Shares - The
Company is pleased to announce that it has completed its previously announced
offering of new shares of the Company for the equivalent of approximately USD
325 million.
February 16, 2012: Northland Announces the Successful Subscription of Bond
Offering and Equity Offering - The Company is pleased to announce that it has
closed the Equity Offering for the equivalent of USD 325 million at a price
equal to NOK 6.50 per share and the Bond Offering equivalent to USD 350 million.
February 15, 2012: Northland Announces fully subscribed Bond Offering and re-
launch of fully subscribed Equity Offering - The Company is pleased to announce
that the Company has received subscriptions for USD 350 million in its senior
secured bond offering and re-launch of an equity offering equivalent to USD
325-330 million, and together with the Bond Offering.
February 10, 2012: Northland Announces Full Subscription of the Equity Offering
- The Company is pleased to announce that the equity offering of the equivalent
of minimum USD 225 million and maximum USD 250 million, previously announced on
February 2, 2012, has been significantly oversubscribed.
February 9, 2012: Northland publishes its Audited Financial Statements and MD&A
for the Fiscal Year ended December 31, 2011, including Q4 results.
Complete press releases are available on www.northland.eu
"Karl-Axel Waplan"
President & CEO, Northland Resources S.A.
For more information, please contact:
Karl-Axel Waplan, President and CEO: +46 705 104 239
Peder Zetterberg, Acting CFO, +46 708 652 120
Anders Antonsson, Vice President - Investor Relations: +46 709 994 970
Marguerite Manshreck-Head, Investors Relations, Canada: +1 647 224 7882
Or visit our website: www.northland.eu
Northland is a development-stage mining company with a portfolio of iron ore
projects in northern Sweden and Finland. The Company's Kaunisvaara Project will
exploit two magnetite iron ore deposits in Sweden. The process is expected to
yield a high-grade, high-quality magnetite iron concentrate. The construction of
the Kaunisvaara project is well underway and production is planned to start in
the fourth quarter of 2012. Northland has entered into industrial off-take
contracts for the entire production from Kaunisvaara. The Company is also
preparing a Definitive Feasibility Study for its Hannukainen Iron Oxide Copper
Gold Project in Kolari, northern Finland. The results of the study are expected
to be released towards the end of the first quarter of 2012.
Important Notice
Forward-Looking Statements
This announcement may include "forward-looking" statements within the meaning of
applicable securities laws. These forward-looking statements can be identified
by the use of forward-looking terminology, including the terms "believes",
"estimates", "anticipates", "expects", "intends", "may", "will" or "should" or,
in each case, their negative, or other variations or comparable terminology.
These forward-looking statements include all matters that are expectations
concerning, among other things, Northland's results of operations, financial
condition, liquidity, prospects, growth, strategies and the industry in which it
operates. By their nature, forward-looking statements involve risks and
uncertainties because they relate to events and depend on circumstances that may
or may not occur in the future. Readers are cautioned that forward-looking
statements are not guarantees of future performance and that Northland's actual
results of operations, financial condition and liquidity, and the development of
the industry in which it operates may differ materially from those made in or
suggested by the forward-looking statements contained in this press release. In
addition, even if Northland's results of operations, financial condition and
liquidity, and the development of the industry in which Northland operates are
consistent with the forward-looking statements contained in this press release,
those results or developments may not be indicative of results or developments
in subsequent periods.
This information is subject of the disclosure requirements acc. to §5-12 vphl
(Norwegian Securities Trading Act)
Northland Operational Update :
http://hugin.info/137015/R/1595439/502382.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Northland Resources S.A. via Thomson Reuters ONE
[HUG#1595439]
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Datum: 19.03.2012 - 16:20 Uhr
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