Nordic Mines AB (publ): Interim report second quarter 2017
(Thomson Reuters ONE) -
Second quarter of 2017
* Revenues were SEK 0.0 million (SEK 0.0 million) as the Laiva Mine is on care
and maintenance and
* not in production.
* The Company reported an operating loss of SEK -4.2 million (SEK -8.4 million
2(nd) quarter 2016).
* Loss after tax for the period amounted to SEK -4.5 million (SEK -8.4 million
2(nd) quarter 2016),
* corresponding to SEK -0.01. (SEK -0.01) per share.
* Cash and cash equivalents were SEK 4.8 million (SEK 2.9 million 31 December
2016) at the end of
* the period. Thus, the Company currently does not have sufficient funds to
cover its needs for the next
* three months starting from the date of this report.
Equity was SEK 478.2 million (SEK 489.7 million 31 December 2016) at the end
of the period.
* Annual general meeting decided on a rights issue of SEK 69,1 million.
January to June, 2017
* Revenues were SEK 0.0 million (SEK 0.0 million) as the Laiva Mine is on care
and maintenance and not in production.
* The Company reported an operating loss of SEK -15.5 million (SEK -21.8
million 2(nd) quarter 2016).
* Loss after tax for the period amounted to SEK -16.5 million (SEK -20.4
million 2(nd) quarter 2016), corresponding to SEK -0.03. (SEK -0.04) per
share.
Significant events after June 30, 2017
* The board has initiated contacts with potential partners for the purpose of
carrying out the rights issue.
* Nasdaq has in its communication with the company had issues with the way the
company handles certain tasks and asked the company for an explanation on
how it perceives rectifying issues such as management and communication. The
company has answered the questions from Nasdaq. Although answer has been
given, Nasdaq put a trade stop on Nordic Mines shares from July 7.
* The company has per August 21 given a new reply to Nasdaq's questions
* The company has summoned to extraordinary general meeting by September 8 in
order to for the meeting to decide upon two alternative deals, one presented
by Firesteel and the other by the shareholder Lau Su. Documentation has
already been published as press release.
Board of Directors statement
The company has continued difficulties in handling significant funding
challenges. Of course, it impedes Opportunities for operational activities at
the Laiva mine. As previously announced, the AGM has decided New share issue of
just over SEK 69 million. In connection with the extraordinary meeting of
September 8, the shareholders will evaluate two offers on financing and
development of the company. An offer to enter a business agreement with
tFiresteel Resources Inc., listed on the Canadian Stock Exchange, or a business
solution that will be presented by the shareholder Lau Su Holding AB. The
company seeks to broaden the board as well as strengthen resources for
management including appointing managing director.
Results, second quarter 2017
Net sales were SEK 0.0 million (SEK 0.0 million) during the first quarter of
2017 as the Laiva mine remains on care and maintenance and is not in production.
Production costs amounted to SEK -3.1 million (SEK -3.6 million 2(nd) quarter
2016) during the first quarter of 2017. Even though there has not been any
production during the quarter, the Company has maintained some of the
organisation around the Laiva mine, for example for maintenance work and
environmental supervision. The mine and the plant also have a number of fixed
costs, for example balancing the water levels in the mining area, which remain
even though the mine is not in production. Depreciation, amortization and
impairment losses for the first quarter of 2017 were SEK -2.9 million (SEK -5.8
million 2(nd) quarter 2016).
Sales and administration costs amounted to SEK -4.0 million (SEK -6.4 million
2(nd) quarter 2016).
The Company reported an operating result of SEK -4.2 million (SEK -8.5 million
2(nd) quarter 2016).
Net financial items were SEK -0.3 million (SEK -0.9 million 2(nd) quarter
2016). The Company's income tax for the period has an impact on profit of SEK
0.0 million (SEK 0.0 million 2(nd) quarter 2016).
Loss for the period after tax amounted to SEK -4.8 million (SEK -7.5 million
2(nd) quarter 2016).
Cash flow and financial position
Cash flow from operating activities including changes in working capital for the
first quarter of 2017 amounted to SEK -0.3 million (SEK -7.4 million Q1 2016).
Net cash flow from the financing operations amounted to SEK 3.5 million (SEK
-0.2 million Q1 2016) during the same period. Cash and cash equivalents at the
end of the period amounted to SEK 4.8 million compared to SEK 2.9 million as of
31 December 2016. Therefore the Company does not currently have sufficient funds
to cover its needs for the next three months at the date of this report. If
external funds are not provided, it is the assessment of the Board that there is
a high risk that the Company will be facing a liquidity deficit. For more
information please refer to Liquidity Risks.
At the end of the period, the Group's equity was SEK 473.2 million, compared to
SEK 489.7 million as of 31 December 2016. For risks related to the Company's
equity, please refer to the Going Concern Principle. The equity/assets ratio was
88.8 per cent compared to 88.7 per cent as of 31 December 2016. Net debt was SEK
15.5 million compared to SEK 8.5 million as of 31 December 2016.
Investments
Since the Company is currently not conducting any mining operations at the Laiva
mine, only smaller investments have been made. Net investments during the
quarter amounted to SEK 0.0 million, compared to SEK 0.0 million during the same
quarter of 2016.
Segment reporting
As per January 2013, the Group stopped using a segment division as there has
only been one productive mine in Finland within the Group, and exploration work
is currently limited to an administrative scope due to cost savings. The
consolidated income statements and balance sheets have been reviewed and valued
thereafter.
Employees
During the first quarter of 2017, the average number of employees was 35. No
serious accidents were reported during the period.
Exploration
Due to cost savings, Nordic Mine's exploration work was more or less suspended
at the beginning of 2013. In total, capitalised exploration expenses as of 31
March 2017 amounted to SEK 64.6 million.
Mineral resource and mineral reserve, 1 January 2015, prepared by SRK Consulting
UK Ltd
The tables below shows the most recent update to the Mineral Resource estimate
that includes ore sorting that reduces the amount of waste rock and the previous
Mineral Resource estimate without sorting
Laiva Mineral Resource - with sorting (16 May 2016)
Category Tonnage (t) Au Grade (g/t) Gold (kg) Gold (tr.oz)
Measured - - - -
----------------------------------------------------------------------
Indicated 24 317 397 1,13 27 535 885 000
----------------------------------------------------------------------
Measured + indicated 24 317 397 1,13 27 535 885 000
----------------------------------------------------------------------
Inferred 4 374 277 1,64 7 187 231 000
----------------------------------------------------------------------
The mineral resource is reported at a cut off of 0.3 g/t.
The calculation of the mineral resource was based on an assumed five-year gold
price of ?1,225 per tr.oz (USD 1,400 per
tr.oz).
Laiva Mineral Resource- without sorting (1 January 2015)
Category Tonnage (t) Au Grade (g/t) Gold (kg) Gold (tr.oz)
Measured - - - -
----------------------------------------------------------------------
Indicated 15 970 000 1,52 24 300 780 000
----------------------------------------------------------------------
Measured + indicated 15 970 000 1,52 24 300 780 000
----------------------------------------------------------------------
Inferred 3 220 000 2,08 6 700 215 000
----------------------------------------------------------------------
The mineral resource is reported at a cut-off grade of 0.6 g/t.
The model for the calculation of the mineral resource is limited by an assumed
gold price of ?1,300 per troy ounce (USD
1,510 per troy ounce).
The reported mineral resource includes the mineral reserve shown below.
Laiva Mineral Reserve - Without sorting (1 januari 2015)
Category Tonnage (t) Au Grade (g/t) Gold (kg) Gold (tr.oz)
Proved - - - -
-------------------------------------------------------------------
Probable 9 367 000 1,19 11 200 360 000
Proved + probable 9 367 000 1,19 11 200 360 000
-------------------------------------------------------------------
The mineral reserve is reported at a cut-off grade of 0.6 g/t.
The calculation of the mineral reserve was based on an assumed five-year gold
price of ?1,020 per troy ounce (USD 1,184
per troy ounce).
The gold market and price of gold
According to LBMA (London Bullion Market Association) gold fixing, the price of
gold was listed at the beginning of the quarter per troy oz at USD 1,159.10 and
EUR 1,100.03, and at the end of the quarter at USD 1,241.70 and EUR 1,156.58.
The Nordic Mines share
The Nordic Mines share has been traded on the Nasdaq Stockholm's Small Cap list
since July 2008. The ticker symbol for the share is NOMI and the ISIN code is
SE0007491105.
Shareholders
As per 31 March 2017, the number of shareholders in Nordic Mines amounted to
approximately 11,000. The ten largest shareholders in the Company are listed in
the table below.
Shareholders as per 30 Juni 2017 Antal aktier Innehav % No of shares Percentage
-------------------------------------------------------------------------------
EUROCLEAR BANK S.A/N.V, W8-IMY 123 024 503 21,75%
CBSG-PHILLIP SEC P/L-CL(INSTI NDVP) 47 754 771 8,44%
STATE STREET BANK & TRUST COM., BOSTON 24 326 540 4,30%
FÖRSÄKRINGSAKTIEBOLAGET, AVANZA PENSION 18 857 366 3,33%
SWEDBANK FÖRSÄKRING 7 534 286 1,33%
NORDNET PENSIONSFÖRSÄKRING AB 5 438 996 0,96%
SALA KEBAB AB 5 000 000 0,88%
HILMAND, BIRTE 4 550 000 0,80%
HANDELSBANKEN LIV 4 438 225 0,78%
MENDRIS, NICO 3 755 000 0,66%
ÖVRIGA 321 043 069 56,75% 321 043 069 56,75%
-------------------------------------------------------------------------------
TOTAL 565 722 756 100,00%
-------------------------------------------------------------------------------
Share capital
As per 31 March 2017, the market capitalisation amounted to SEK 158.4 million
divided between 565,722,756 shares with a quoted value of SEK 0.28 each.
Equity amounted to SEK 478.0 million at 31 March 2017, compared to SEK 489.7
million at 31 December 2016.
Significant risks and uncertainties
All enterprise is associated with a certain degree of risk. Nordic Mines'
operations must be assessed based on the risk, cost and difficulty that
companies in the mining and exploration business often face. The risks in the
majority of cases are such that the Company cannot protect itself from them.
The risk faced by mining and exploration companies is mainly associated with the
outcome of the exploration itself, the production and the market price on the
metal markets, but there is also risk associated with licensing issues related
to exploration, processing and the environment.
The Group is also exposed to a number of financial risks: liquidity risk, credit
risk, gold price risk and currency risk. The Board and Management attempt to
address these risks by identifying, evaluating and mitigating the risks listed
above where appropriate.
A more detailed analysis is available in the 2016 Annual Report, which is
available on the Company's website, www.nordicmines.se.
Liquidity risk
The Company currently does not have sufficient funds to cover its needs for the
next three months at the date of this report. Cash and cash equivalents totalled
SEK 1.3 million at the end of the first quarter of 2017 and the Company
basically does not have any income since production as the plant was closed,
albeit there have been some modest timber sales in the fourth quarter. The
Company is dependent on external capital contributions for continued operations.
The Company does not currently have the funds to restart operations at the Laiva
mine. In order to fund the restart of the Laiva mine, a capital contribution in
addition to existing cash and cash equivalents would be required. This capital
contribution is intended to fund working capital related to the restart, initial
investments and a liquidity reserve for unforeseen costs and administration.
This funding is assumed to be a combination of debt financing and additional
equity contributions.
If the Company fails to raise additional capital, there is a risk that a
liquidity deficit will eventually occur. Given such a development, it is a risk
that the Finnish composition plan would default, thus leading to a new
reorganisation, bankruptcy or other winding down of the Company.
Composition plan Nordic Mines Oy
On 31 July 2014, the Uleåborg District Court decided to adopt the composition
plan proposal filed with the court by the administrator for Nordic Mines'
Finnish subsidiary. The composition plan includes conditions that allow the
Company's creditors and the composition plan supervisor, attorney Hannu Ylönen
from the Krogerus law firm, to apply for the composition to be revoked under
certain conditions. Ground for termination include those related to the Group
companies not fulfilling their payment obligations under the composition plan.
If Nordic Mines Oy breaches the composition plan, there is a risk that the
Finnish composition plan will fail, which could lead to a new reorganisation,
bankruptcy or other winding down of the Company. In the event the Finnish
composition plan defaults, the relevant creditors' claims return to Nordic Mines
Oy, at their full amount, and in the event of bankruptcy all shareholders will
lose the entire amount of their previously invested share capital.
A more detailed analysis on the Composition plan in Nordic Mines Oy is available
in the prospectus from 2015, which is available on the Company's website,
www.nordicmines.se.
Gold price risk
Sales commenced in January 2012 and essentially have consisted of a single
product, doré bars, containing gold, silver and copper. A decline in the price
of gold could have a negative impact on the Group's future profit as well as a
negative impact on the Company's possibilities for restarting operations at the
Laiva mine.
Currency risk
Gold is quoted in USD, the majority of the costs occur in EUR and the Group is
consolidated in SEK. Accordingly, the Company is directly dependent on exchange
rates for these currencies. If USD strengthens against EUR, this has a positive
effect. If EUR strengthens against SEK, this has a positive effect on sales, but
a negative effect on costs.
Employees
Nordic Mines currently has a small organisation and is dependent on a number of
key individuals. A limited expected lifetime and to date weak profitability for
the Laiva mine can result in restricted opportunities to recruit key personnel
once the mine restarts its operations.
Accounting principles
The consolidated accounts have been prepared in accordance with the
International Financial Reporting Standards (IFRS) as endorsed by the EU and
recommendation RFR 1 issued by the Swedish Financial Reporting Board on
Supplementary Accounting Rules for Groups, which specifies the additions to the
IFRS disclosures that are required as stipulated in the Annual Accounts Act.
This financial report was prepared in accordance with IAS 34, Interim Financial
Reporting. The Parent Company's financial statements are prepared in accordance
with the Annual Accounts Act and RFR 2, Accounting for Legal Entities. The Group
uses the same accounting principles as those described in the 2015 Annual
Report. No new IFRS additions or regulations that affect the Group have entered
into force.
Upcoming informational meetings and announcements
---
Interim report Q3 21 November 2017
Interim report Q4 27 February 2018
The Board of Directors and the Chief Executive Officer hereby confirm that this
interim report gives a true and fair view of the Company's and the Group's
operations, financial position and results of operations, and describes
significant risks and uncertainties faced by the Company and the companies in
the Group. The report for January - March 2017 has not been reviewed by the
Company's auditors.
Stockholm, 22 augusti 2017
NORDIC MINES AB (publ)
Fredrik Zettergren Hans Andreasson Krister
Söderholm Torsten Börjemalm
Styrelseordförande Styrelseledamot
Styrelseledamot Styrelseledamot
Note
Nordic Mines is required to publish this information pursuant to the Securities
Markets Act and/or the Financial Instruments Trading Act. The information was
published on 22 August 2017, at 13:00 CET.
For further information, please contact:
Torbjörn Bygdén: +46 (0)10 141 21 03
Definitions according to SveMin
A Mineral Resource is a concentration of occurrences of materials in or on the
earth's crust in such form, quality and quantity that is of interest financially
and for which financially profitable extraction is deemed possible. The
location, quantity, grade, continuity and other geological characteristics of a
mineral resource are measured, estimated or interpreted based on specific
geological facts, tests and knowledge. On the basis of its geological certainty,
a mineral resource is classified into the following categories: inferred mineral
resource, indicated mineral resource and measured mineral resource.
An Inferred Mineral Resource is the part of a mineral resource for which the
tonnage, density of occurrences, form, physical characteristics, grade and
mineral content can be estimated with a low level of confidence. This is
inferred from geological evidence, tests and assumed but not verified geological
or grade continuity. It is based on information gathered using appropriate
techniques through exploration and testing of, for example, outcrops, trenches,
pits, workings and drill holes. The information is limited or of uncertain
quality and reliability.
An Indicated Mineral Resource is the part of a mineral resource for which the
tonnage, density of occurrences, form, physical characteristics, grade and
mineral content can be assumed with a reasonable level of confidence. It is
based on information gathered using appropriate techniques through exploration
and testing of, for example, outcrops, trenches, pits, workings and drill holes.
However, this information is too inconsistent or inappropriately distributed to
guarantee geological or grade continuity.
A Measured Mineral Resource is the part of a mineral resource for which the
tonnage, density of occurrences, form, physical characteristics, grade and
mineral content can be assumed with a high level of confidence. It is based on
information gathered using appropriate techniques through detailed and reliable
exploration and testing of, for example, outcrops, trenches, pits, workings and
drill holes. This information is sufficiently consistent to prove geological
and/or grade continuity.
A Mineral Reserve is the part of a measured or indicated mineral resource that
is deemed to be economically feasible for extraction. This includes diluting
material and losses which may occur when the material is mined. Appropriate
assessments and studies have been conducted and modified taking into
consideration realistic assumptions related to mining, metallurgical, economic,
marketing, legal, environmental, social and political factors. These assessments
show on the reporting date that extraction can be reasonably justified. On the
basis of their geological certainty, mineral reserves are classified into the
following categories: probable mineral reserve and proven mineral reserve.
When using the term "mineral reserve", there is an expectation that studies have
been conducted at the Pre- Feasibility level as a minimum, including a mining
plan that is technically appropriate and economically viable.
A Probable Mineral Reserve is the part of an indicated or under some
circumstances measured mineral resource for which extraction is economically
viable. This includes diluting material and losses which occur when the material
is mined. Studies at a minimum of the Pre-Feasibility level have been conducted
and modified to take into consideration mining, metallurgical, economic,
marketing, legal, environmental, social and political factors. These assessments
show on the reporting date that extraction can be reasonably justified.
A Proven Mineral Reserve is the part of a measured mineral resource for which
extraction is deemed to be economically viable. This includes diluting material
and losses which occur when the material is mined. Studies at a minimum of the
Pre-Feasibility level have been conducted and modified to take into
consideration mining, metallurgical, economic, marketing, legal, environmental,
social and political factors. These assessments show on the reporting date that
extraction is justified.
Press release (PDF):
http://hugin.info/138647/R/2128393/812863.pdf
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Nordic Mines AB via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 22.08.2017 - 13:00 Uhr
Sprache: Deutsch
News-ID 557403
Anzahl Zeichen: 25030
contact information:
Town:
Stockholm
Kategorie:
Business News
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