Nordic Iron Ore Interim Report Q3, July – September 2024

Financial development
Third quarter, 1 July – 30 September 2024

• Sales amounted to SEK 0 million (0)
• Earnings after tax amounted to SEK -1,6 mkr (-4,3)
• Investments amounted to SEK 0,3 mkr (0,5) during the quarter
• Earnings per share before and after dilution amounted to –0,02 SEK (-0,12)

First nine months, 1 January – 30 September 2024

• Sales amounted to SEK 0 million (0)
• Earnings after tax amounted to SEK -8.7 million (-9.8)
• Investments amounted to SEK 0.8 mkr (1.2) in January – September
• Earnings per share before and after dilution amounted
• Cash and cash equivalents amounted to SEK 114.4 million (0.3)
  on September 30, 2024.

Significant events during the third quarter 2024

• 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.
• Nordic Iron Ore AB appointed Karl-Owe Svensson as the company’s new Logistics Manager. Karl-Owe will be responsible for building the logistics function, ensuring necessary procedures and processes are implemented. His initial task will be to manage the procurement for railway connection, train operators, and wagon solutions, secure agreements with Oxelösunds Hamn regarding transportation, and prepare for the construction of an in-house loading terminal and its associated organization.
• Malin Ekåsen has been appointed as Interim Environmental Manager while the recruitment process for a permanent Environmental Manager is ongoing. Malin, a consultant at Geosyntec, will report directly to CEO Ronne Hamerslag in her interim role.
• Nordic Iron Ore has assigned Geosyntec to handle the environmental permit for the Blötberget mine, addressing the ruling from the Land and Environmental Court regarding the application for extended operational time for water management. The goal is to commence mine construction as scheduled by late 2025. The company received approval from the Land and Environmental Court on October 14, 2024.

Significant events after the period

• In a ruling on 14 October 2024, the Land and Environment Court granted Nordic Iron Ore AB a prolonged work time for the water facilities until March 20, 2034 regarding the environmental permit for the mines at Blötberget and Håksberg. The ruling has now gained legal effect. Based on the Company’s projections and calculations, the court has decided a new financial set off to the reclamation fund, which has now been set at approx. SEK 201 million from the previous approx. SEK 53 million, thus an increase of SEK 148 million. Correction: In press releases published on October 14 and November 6, it was incorrectly stated that the new amount is SEK 210 million; the correct figure, as noted above, is SEK 201 million.
• Nordic Iron Ore AB recruited Niklas Sternbeck as Project Manager for underground projects. Niklas will lead efforts for the planned ramp development to reach the new main level for the Blötberget mine.
• Nordic Iron Ore AB appointed Magnus Lundin as Director of Technology & Projects. In this role, Magnus will lead the company’s Technology and Projects division starting February 1, 2025. Until this start date, Magnus will serve as a part-time consultant.

CEO comments

We’re Moving Forward!

Let me begin by reflecting on the second quarter, during which, in the final days before midsummer and the start of the Swedish holiday period, we successfully raised approximately SEK 163 million through a directed share issue. In connection with this, we welcomed Cargill as our largest new shareholder, alongside other strong investors such as Svelland Capital and Gerald Engström, which strengthened our ownership base.

In June and July, we were also able to settle all of the company’s debts through repayments and primarily by converting debts into shares as part of the directed share issue. Thanks to these measures, the company began the third quarter on solid footing—debt-free, with capital in the bank, a strengthened ownership base, and ready to initiate the eagerly anticipated steps to further develop toward producing an ultra-high-grade iron ore concentrate for green iron and steel production. This allows us to contribute to the transition of the steel industry—and thereby society as a whole—towards fossil-free production.

With this capital raised, we have been able to invest in expanded exploration, both for the iron ore deposit at Blötberget and for phosphorus and rare earth elements. The goal of the planned drilling campaigns at Blötberget is to increase mineral resources by 35 million tonnes—a significant increase of up to around 60% if successful. As with any exploration, however, there are always uncertainties—we won’t know what’s underground until we drill.

Using various exploration methods, such as magnetic anomalies and seismic profiles (some developed in collaboration with the Smart Exploration Research Centre), we have good indications of mineralization, making the drilling investment promising.

For phosphorus and rare earth elements, it is still too early to set specific targets in terms of grades or volumes, as we still have basic mineralogical sampling and testing to conduct. The objective is to develop a sellable byproduct concentrate with high concentrations of phosphorus and rare earth elements, likely contained in various phosphate minerals. A significant advantage for the company is access to the old tailings from previous mining operations, providing material for sampling and analysis without waiting for the new mining operation to begin.

The intention is for both the exploration of additional mineral resources at Blötberget and the investigations into phosphorus and rare earth elements to be included in the updated profitability study (Bankable Definitive Feasibility Study), which is planned to start in the fourth quarter of 2024 and expected to be completed by the second quarter of 2025. We will balance the exploration results and timeline of the profitability study to ensure that any significant discoveries are integrated. The aim is to complete project financing within three to six months after the feasibility study is completed, then immediately activate the environmental permit, begin groundwork for the new mining area, dewater the old mine shafts, and start ramp development from the surface to the ore body below the former Blötberget mine. Additionally, in the third quarter, we engaged in intensive negotiations with various engineering consultants, contractors, and equipment suppliers to secure the best possible partners and workflows for the ongoing process.

We have also intensified our efforts to strengthen the organization and recruit key personnel. In the third quarter, Karl-Owe Svensson was hired as Logistics Manager, Niklas Sternbeck as Project Manager for underground projects, and Malin Ekåsen as Interim Environmental Manager, while the recruitment process for a permanent EHSQ Director continues. All new hires will start in the fourth quarter, and further additions to the organization will be announced in the same period.

During the third quarter, we decided to slow the pace of some activities while awaiting the decision on our application for prolonged work time for the water facilities. This has been a critical issue for the company, as the decision will affect future work plans and potential applications for new permits. Fortunately, after the end of the third quarter, in October, the Land and Environmental Court granted our application for an extension of the operational period for water management until March 2034. No appeals were filed during the appeal period, and in November, the ruling became final. This provides the company with a stable foundation for continued operations toward responsible mining with low carbon emissions.

Recently, there have been announcements of delays in certain green steel mill projects and hydrogen-based direct reduction facilities, but let me remind you that the company is not dependent on the steel industry’s transition, though that is what we aim to support. A high-grade iron ore product reduces energy consumption and thus carbon emissions regardless of the metallurgy method, whether blast furnace or direct reduction. Additionally, the higher the iron content, the less volume to transport and the less slag waste generated, making our product attractive in all scenarios. Currently, the market points to a surplus of high-grade iron ore products until about 2030, after which the transition will lead to a shortage as the iron and steel industry undergoes changes, while mine production lags in volume.

In summary, with a debt-free company, cash in the bank, ambitious exploration targets, and a strengthened organization, I believe a fitting description of our current situation is—now we’re moving forward!

Ronne Hamerslag
CEO
Nordic Iron Ore AB (publ)