Quarterly Report • May 10, 2023
Quarterly Report
Open in ViewerOpens in native device viewer
Nordic Mining ASA ("Nordic Mining" or the "Company") is a resource company with focus on high-end industrial minerals and metals. The Company's project portfolio is of high international standard and holds significant economic potential. The Company's assets are in the Nordic region.
Nordic Mining is undertaking a large-scale project development at Engebø on the west coast of Norway where the Company has rights and permits to a substantial eclogite deposit with rutile and garnet. In addition, Nordic Mining holds interests in other initiatives at various stages of development. This includes patented rights for a new technology for production of alumina and exploration of seabed minerals.
Nordic Mining is listed on Euronext Expand Oslo with ticker symbol "NOM".
In March 2023, Nordic Mining secured the remaining equity component of the total USD 277 million project financing package for the Engebø Project in a private placement of NOK 940 million. The private placement was resolved by the Extraordinary General Meeting and Board of Directors in Nordic Mining ASA on 3 March 2023 and contributed to Nordic Rutile on 8 March 2023, satisfying all relevant financing conditions for the long stop date. The gross proceeds from the private placement, together with the equity from the sale of the shares in Keliber, the USD 100 million in senior secured bond and USD 50 million non-dilutive royalty financing with entered into with mining investment firm Orion Resource Partners ("Orion") in February 2023. The royalty agreement entails that Orion will pay USD 50 million to Nordic Rutile as a fixed, one-time consideration for the right to receive a 11 % royalty of the gross revenue from the sale of products from the Engebø Project for up to 90 years. Nordic Rutile has the right to buy back 50% of the royalty against a reduction in the royalty payments to 5.5%. The royalty financing will hold second priority lien on senior security package, subject to the terms of an Intercreditor Agreement. The financing agreements, including the royalty agreement, are subject certain pre-disbursement conditions precedent order for Nordic Rutile to draw down any amounts under the financing, including i.e. that all equity contributed to Nordic Rutile has been spend towards the development and construction of the Engebø Project. The royalty agreement will not have any accounting effects until drawdown of the one-time consideration of USD 50 million, except transaction costs related to completion of the royalty financing agreement. Please see note 4 for more information on financial costs. The project financing package of in total USD 277 million is expected to fund all costs and expenditures to bring the Engebø Project into commercial production, including a project reserve of USD 30 million.
In April 2023, the USD 100 million 5-year senior secured bond issued in November 2022 with ISIN NO0012734112 was listed on Nordic ABM with ticker NORUT01 PRO with listing date 12 April 2023.
Following completion of project financing of the Engebø Project in March 2023 the four lump-sum EPC ("Engineering, Procurement and Construction") contracts with Sunnfjord Industripartner AS, Åsen & Øvrelid AS, Nordic Bulk AS and Normatic were fully activated. The local groundworks contractor, Sunnfjord Industripartner AS, has undertaken the groundworks on the process plant area and preparatory works for underground infrastructure at Engebø under the lump-sum EPC contract since April 2022. The process plant area has been prepared for concrete work on the first two buildings, administration and control room building, and workshop, and we expect to prepare the remaining parts on bench level 22 on schedule during May 2023. Blasting of the underground crushing chamber and raise drilling of the vertical ore pass is well under way and we expect to complete the work on schedule during May. The mine access road to the open pit tunnel portal and is around 95% complete. Local EPC building contractor, Åsen & Øvrelid AS, has started the concrete work on the administration and control room building, and workshop and we expect that work on the remaining buildings will start in Q2 2023. Currently, the Project has around 70 workers at Engebø.
Detail Engineering on the process plant is ongoing by Nordic Bulk AS and Normatic AS. The main parts of the Details Engineering are expected to be completed in H1 2023, with subsequent bulk procurement and fabrication of steel to start in Q2 2023. This will allow start of mechanical and electric installation work and project team is now focusing on detail planning this phase together with the EPC partners. Further ramp-up of personnel on site is expected in this period.
The four lump-sum EPC contracts cover around 57% of the remaining plant and mine capital expenditure of USD 167 million as of 31 March 2023, excluding commitments of around USD 10 million.
The full financing and final investment decision of the Engebø Project in March 2023 allowed Nordic Mining to move forward with the fabrication of long lead mechanical packages for the process plant. The client provided items ("CPIs") are procured directly by the Group and are made with leading global suppliers of sustainable solutions for the mineral industry, including agreements with Metso Outotec and Mineral Technology, suppliers of sustainable end-to-end technologies, solutions, and services for the minerals industry globally, for delivery of a comprehensive mining processing technology packages. The current estimates for delivery time and costs for the CPI packages are in line with expectations, with start of the main mechanical installations expected during Q3 2023. In total, around 78% of the mechanical packages of around USD 30 million are under contract at the date of this report, with price and delivery agreed. The Project team is working with a plan for logistics and quality surveillance of the production.
In 2022, Nordic Rutile entered into two rutile offtake agreements, the first with Iwatani Corporation for close to 60% of the planned rutile production for the first 5-year and the second agreement in October 2022 for up to the remaining annual planned rutile production for the first 5-year. The consideration under the rutile offtake agreements will be based on the market price for 95% natural rutile concentrate, adjusted for actual TiO₂ content, as determined from TZMI index or annual price discussions between the parties.
In January 2023, Nordic Rutile entered into a global exclusive offtake agreement the full planned garnet production from Engebø for the first 5 years of production. The offtake agreement is for the supply and delivery of minimum total of 762,500 metric tonnes of garnet concentrate in the 5-year contract period, up to a total of 785,000 metric tonnes, which is the full planned garnet production the first 5-years of production. Further to the initial garnet offtake, the parties shall discuss extension of the cooperation, comprising for example joint marketing, sales, and distribution of garnet from the Engebø Rutile and Garnet Project. The consideration under the garnet offtake agreement will be based on a pre-agreed price schedule.
Nordic Rutile has with the rutile and garnet offtake agreements secured committed sales for up to the full production of all minerals from the Engebø Rutile and Garnet Project for the first 5 years of production, all with highly reputable buyers. The offtake agreements are inter alia subject to certain conditions precedent.
In February 2023, Nordic Rutile entered into a Memorandum of Understanding ("MoU") for a long-term joint cooperation for the offtake of pyrite from the Engebø Project. Pyrite (Iron sulfate) is a mineral that is present in the Engebø Eclogite-ore and that will be separated in the process of purifying the rutile concentrate. Nordic Mining will in partnership with Green Trail Holding Ltd, a trading company with over 30 years of experience, together pursue market opportunities for pyrite as a new mineral production stream. Pyrite has previously been considered as a residual waste stream from the Engebø Project.
The successful production, marketability and sale of pyrite can potentially create value from residual mineral waste streams and reduce the need to deposit pyrite as part of the tailings. Further, it has the potential for a significant reduction of chemical additives in the tailings. Even though the project is fully permitted and considered environmentally safe by the Norwegian authorities, any reduction in additives in the tailings is regarded positive and further reduces the risk of environmental impacts. The process plant design already allows for finalization of the pyrite as a separate mineral concentrate stream, with minimum additional infrastructure requirements.
Titanium metal demand, being an important driver for rutile, remained robust in the first quarter of 2023, due to the ongoing revival of air traffic, as well as demand for non-Russian products. The outlook remains strong throughout 2023.
The first quarter 2023 showed a slower start for titanium feedstock producers. Rutile sales volumes were below or at production levels and reported average prices for rutile showed a diverse picture. The first quarter of 2023 has been mixed for the TiO2 industry; however, in Asia, led by China, signs of recovery of pigment demand are reported. Pigment demand in North America remained steady whereas in Europe, reported demand was still weak. Rebound of pigment demand is projected as European pigment plants have re-started last quarter combined with the northern hemisphere spring paint season ramp up. Current inventories are low due to the actions taken in H2 2022
Reported bulk natural rutile prices in Q1 2023 have been from around USD 1,450/mt FOB and above, with the main producers expecting pricing to be steady onwards.
In April 2023 the Supreme Court's appeals committee informed that the appeal in the case between Artic Mineral Resources ("AMR") and Nordic Rutile will be heard before the Supreme Court. The Oslo District Court and the Borgarting Court of Appeal both ruled in favour of Nordic Rutile and concluded that AMR shall pay Nordic Rutile's legal expenses. The court rulings were in line with the operating license granted by the Ministry of Trade, Industry and Fisheries in May 2022. Nordic Rutile maintain that AMR's claims have no merit and will continue to defend the case rigorously and is confident that the ruling from the Supreme Court will be in Nordic Rutile's favour, i.e. in line with the previous rulings. Furthermore, two NGO's have summoned the Norwegian Government claiming that Nordic Rutile's disposal permit granted by the Norwegian Government in 2015 is null and void.
Unless other information is given, numbers in brackets for comparison relate to the corresponding period in 2022.
Nordic Rutile is under construction of the Engebø Project and has, so far, no sales revenues from operations. Reported operating loss for the first quarter of 2023 was NOK –7.2 million, down from NOK –14.0 million in the first quarter of 2022 resulting from the start of capitalization of direct costs related to the construction work at Engebø from Q2 2022, including direct payroll and related costs.
Net financial items in the first quarter was NOK –41.0 million (NOK –0.9 million), with the main financial items being net gain on foreign exchange related to the bond of NOK 1.1 million, net interest cost of NOK –13.7 million and transaction costs from financing of NOK –27.7 million. Please see note 4 for further information. Borrowing costs of NOK 22.2 million under loans from parent company and bond loan has been capitalized under Mine under construction in the quarter.
Reported net loss in the quarter was NOK –48.2 million (NOK –14.9 million).
In the first quarter of 2023 Nordic Rutile has capitalized in the balance sheet under Mine under construction direct costs related to the construction work at Engebø of NOK 143.0 million (NOK 0). Nordic Rutile's carrying amount for Mine under construction was NOK 484.3 million as of 31 March 2023 (Q1 2022: NOK 0 and Q4 2022: NOK 341.3 million).
Net cash outflow from operating activities in Nordic Rutile in the quarter was NOK –3.5 million, related to noncapitalizable costs related to the Engebø Project (NOK –11.0 million). The direct costs related to the construction work at Engebø that are capitalized are included in cash flow from investment activities, including direct payroll and related costs. Net cash flow from investment activities in the quarter was NOK –82.1 million, related to investment in Mine under construction at Engebø. Interest on the bond loan for the first quarterly interest rate period of USD 3.2 million (corresponding to NOK 32.2 million) million was paid from the four months of prefunded interest paid into the bond Escrow account and is not included in the cash flow from financing or investment activities. Please see note 3 for further information. Interest under loans from parent company are added to the outstanding loan amounts on 1 January until parent is entitled to receive interest and loan repayments. In March 2023, Nordic Mining contributed the remaining part of the equity project financing for the Engebø Project to Nordic Rutile, resulting in net cash flow from financing activities of NOK 960.3 million after transaction costs of NOK –34.8 million related to the share capital increase and other financing fees of NOK – 23.0 million. Please see note 4 and 5 for further information.
Nordic Rutile's cash and cash equivalents as of 31 March 2023 was NOK 906.6 million (Q4 2022: NOK 32.4 million). In addition, Nordic Rutile had NOK 1.08 billion on restricted Escrow account for bond and NOK 8.4 million on restricted account pledged toward Directorate of Mining ("DirMin") for clean-up measures in accordance with the operating license. Please see note 3 for information related to pre-disbursement conditions precedent before the proceeds from the bond Escrow account will be released to the Engebø Project.
Nordic Rutile's total assets as of 31 March 2023 was NOK 2.49 billion (31.12.2022: NOK 1.43 billion), and total equity was NOK 1.0 billion (31.12.2022: NOK 106.7 million).
For further information relating to the Company's risk assessments, reference is made to the annual report for 2022 which is available on the Company's webpage www.nordicmining.com.
The Engebø deposit is one of the largest unexploited rutile deposits in the world and has among the highest grades of rutile (TiO2) compared to existing producers and other projects under development. The deposit also contains significant quantities of high-quality garnet. The scale of the mineral resource secures long-term operations.
The project will be developed in accordance with high international standards for environment, health, and safety. Regional hydroelectric power will supply the process plant with renewable energy. The deposit has a favorable location next to a deep-water quay and with efficient shipping/logistics to European and overseas
markets. This limits the project's physical footprint and reduces environmental effects. According to independent studies, Engebø will have the lowest climate gas emission among all producers of titanium feedstock globally.
The Engebø deposit will be developed as a dual mineral operation with production and sale of high-quality rutile and garnet. The business concept provides efficient resource utilization, risk reduction, attractive and robust economics, and valuable future expansion opportunities.
In May 2021 Nordic Mining ASA completed the Updated Definitive Feasibility study ("UDFS") for the Engebø Rutile and Garnet Project. The UDFS is an update of the DFS which was completed in January 2020. The updated study confirmed Engebø as a sustainable and economically robust mineral project with reduced financing risk, improved financial resilience, and attractive financials returns. The complete summary report is available at the corporate website, and main improvements and risk-reducing measures in the UDFS are:
In February 2023, Nordic Mining revised the project economics for the Engebø Rutile and Garnet Project based on the latest available data and assumptions. The analysis confirmed further improvements in the key financials of the Engebø Project as the project continues to progress towards production.
High-margin cash flow and short pay-back support bankability (unlevered):
Nordic Rutile is taking a proactive approach to ensure that the Engebø Project will be developed with high standards for sustainability. Nordic Mining is in the process of adopting the Towards Sustainable Mining ("TSM") initiative for the Engebø Project and will report according to the system when Engebø is in operation with the goal of an A-level. Nordic Rutile is implementing a comprehensive Environmental and Social Management System ("ESMS") for the Engebø Project. Through the ESMS we aim to ensure that the Project adheres to permits, regulation and best industry practices1 from construction, operation, and closure.
The Group has an ambitious goal of biodiversity net gain for life of mine of the Engebø Project. Nordic Rutile will work to reduce, restore, and compensate biodiversity loss at the mine site. If not able to restore biodiversity 100 percent, Nordic Rutile will compensate by increasing biodiversity in the region. Nordic Rutile is developing a Biodiversity Action Plan in collaboration with consultants DNV and Asplan Viak. As part of this work a comprehensive biodiversity mapping has been carried out. Based on a scoring system the biodiversity impact will be tracked on an annual basis and made publicly available. Nordic Rutile have already started the biodiversity work at the construction site at Engebø. The Biodiversity Action Plan will be optimized over time and used as a tool to ensure Nordic Rutile reaches its biodiversity targets. To ensure that the construction phase of Engebø Project meet the Groups standards on sustainability, Nordic Rutile have made a Construction Environmental Management Plan ("CEMP") to adhere to environmental obligations for owners' team, contractors, and suppliers throughout the construction phase. Potential environmental risks are identified, and actions plans are prepared to reduce the risk of environmental incidents, accidents and to enhance performance.
To control how we impact the environment, a comprehensive environmental monitoring program has been developed using state of the art technology. Monitoring is ongoing to supervise potential effects from construction activities related to airborne dust, vibrations and noise, and risk for emissions to fjord surface water and fresh-water bodies.
Nordic Rutile will ensure that the communities and other stakeholders that are potentially affected by our operations are well informed and are given opportunities to engage with us. We will work proactively to understand people's needs and concerns and seek solutions to mitigate these throughout the construction phase and into operation.
A waste management plan for waste handling throughout the operation at Engebø was submitted to the environment agency Q1 2023. The plan builds on the EU's Best Available Techniques for extractive waste management2 . The aim is to ensure that proper measures and procedures are in place to reduce effects on the environment, and any resultant risks to human health related to the waste rock and seabed tailings facility at Engebø. The plan also addresses measures to reduce and utilize waste streams.
Engebø Rutile will be a source of raw material for several end use products that can positively impact human life. Titanium is contributing to human health by its use as long-lasting implants in the human body. It is also used in creating more healthy living environments, when used in concrete to capture air pollution. Titanium metal plays a role in lowering carbon footprint. The metal is used in constructing light weight airplanes to lower their fuel consumption and carbon emissions. It is also a critical ingredient for equipment to withstand high temperatures and corrosion in geothermal energy plants. In general, natural rutile is an environmentally superior raw material
1 The ESMS is made in accordance with the IFC Performance Standards.
2 Best Available Techniques (BAT) Reference Document for the Management of Waste from Extractive Industries in accordance with Directive 2006/21/EC.
for the titanium raw material industry compared to other sources. Due to its high purity can be used directly in chlorination plants to make titanium pigment or as feed for titanium metal production. Other sources of raw materials such as ilmenite, must go through additional processing steps and upgrading. This is done through carbon intensive leaching or smelting processes that increases the climate footprint and produces substantial amounts of waste.
Engebø Garnet is an industrial mineral suitable for water jet cutting applications. Water jet cutting is an efficient high precision cutting process used for cutting a wide range of materials including plastics, glass to steel. The cutting technology provides a safe and environmentally friendly alternative as it can be done without any chemicals or heat, and produces no vapor, smoke, or airborne dust. Since Garnet particles are trapped in water in the cutting process, they can be filtered out to be recycled or safely disposed after use. Garnet is a silica free, non-toxic product and can be safely handled by operators.
The Engebø mining operations has a limited Green House Gas ("GHG") emission footprint due to available hydroelectric power in the area and a tight infrastructure with minimal transportation. The annual GHG emissions are calculated to be 3085 tCO2eq. per annum and an energy consumption of 0,08 TWh. SRK Study from 2020 showed that the Engebø Project will achieve an 85% reduction in GHG emissions by replacement of gas dryers with electrical dryers. The main source of GHG is diesel consumption from the mining fleet. The Group has investigated options for electrification of the fleet and will when feasible transfer to a fully electrified mining operation. The Group has a target of net zero GHG emissions for the Engebø Project. To achieve this goal, Nordic Mining has initiated the development of a Climate Strategy Plan together with SRK.
Minviro, UK has carried out an independent Life Cycle Assessment ("LCA") of the rutile product to be produced at Engebø. The LCA is a cradle-to-gate assessment it covers all stages of the production of natural rutile concentrate from Engebø. The study calculates the Global Warming Potential ("GWP") and covers scope 1, 2 and 38 calculations of GHG emissions. The GWP impact of the Engebø Rutile was determined to be 0,17 kg CO2 eq. The main drivers of the GWP are the consumption of diesel in the mining operation and the explosive consumption related to the ore extraction. Minviro conducted a benchmarking study to compare rutile from Engebø with a wide range of titanium-bearing feedstocks, including other natural rutile products, synthetic rutile, and titanium slag. The analysis showed that the GWP impact of the Engebø Rutile was superior and substantially lower than the alternative sources.
In May 2022, the Ministry of Trade, Industry and Fisheries ("MTIF") resolved that Nordic Rutile's operating license is maintained as granted with full rights to the Engebø deposit, confirming the resolution from the Directorate of Mining from June 2020 and later confirmed in November 2020. The decision from MTIF is final and cannot be appealed. The operating license is granted for the life of mine of the project which includes an open pit and underground phase, however, with a possibility for revision after 10 years. The license regulates operational scope, methodology and procedures to secure safe and efficient production of the mineral resources and follows the strict regulation practice for Norwegian mining operations which implies high standards for environment, health, and safety. The operating license completes the main regulatory framework required for the project, including extraction permits, approved zoning plan for the mining and processing areas and the environmental permit. The operational license was activated towards the Directorate of Mining in November 2022, following start of construction work of conveyor tunnel, primary crushing chamber, and preparatory work to drill the vertical ore pass. In June 2020, Nordic Rutile submitted, after extensive test work proving that the consumption of chemicals could be significantly reduced, an application to the Environment Agency for substitution of chemicals from the original environmental permit of 2015. In January 2021, the Agency granted the revised environmental permit, commenting that the significant reduction in chemical consumption will have lower impact on the environment than the previous planned consumption. The decision was confirmed by the Ministry of Climate and Environment in November 2021 concluding that the complaints received in relation to the revised discharge permit do not provide any basis to revoke or change the permit. The decision from the Ministry of Climate and Environment is final and cannot be appealed. In February 2022, Sunnfjord Municipality approved the building permit for all infrastructure groundworks for the Engebø Project. The permit is in line with the UDFS and the EPC contracts. All building permit complaints were rejected by the Municipality Body of Complaints in April 2022 following an appeals process. The approved building permit for infrastructure groundworks with already approved demolition permit for existing buildings and agreement with county road authority, completes the formal requirements for starting construction work at Engebø. Permits for general and process plant buildings will be applied for in due course according to finalization of detail engineering by the EPC in line with the construction plan.
Oslo, 9 May 2023 The Board of Directors of Nordic Rutile AS
| 2023 | 2022 | |
|---|---|---|
| 01.01-31.03 | 01.01-31.03 | |
| (Amounts in NOK thousands) Note |
Unaudited | Unaudited |
| Payroll and related costs | (54) | (1 681) |
| Depreciation and amortization | (46) - | |
| Other operating expenses | (7 090) | (12 304) |
| Operating profit/(loss) | (7 190) | (13 985) |
| Financial income 4 |
75 172 | - |
| Financial costs 4 |
(116 180) | (908) |
| Profit/(loss) before tax | (48 199) | (14 893) |
| Income tax | - | - |
| Profit/(loss) for the period | (48 199) | (14 893) |
| 31.03.2023 | 31.12.2022 | ||
|---|---|---|---|
| (Amounts in NOK thousands) | Note | Unaudited | Audited |
| ASSETS | |||
| Non-current assets | |||
| Mine under construction | 2 | 484 260 | 341 291 |
| Property, plant and equipment | 1 044 | 1 090 | |
| Total non-current assets | 485 304 | 342 381 | |
| Current assets | |||
| Trade and other receivables | 14 384 | 21 584 | |
| Bond Escrow | 3 | 1 076 558 | 1 032 597 |
| Restricted cash | 8 430 | 4 215 | |
| Cash and cash equivalents | 906 585 | 32 377 | |
| Total current assets | 2 005 957 | 1 090 774 | |
| Total assets | 2 491 261 | 1 433 155 | |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| Shareholders' equity | |||
| Share capital | 24 705 | 24 705 | |
| Share premium | 164 700 | 164 700 | |
| Unregistered equity | 5 | 942 424 | - |
| Retained earnings/(losses) | (130 946) | (82 747) | |
| Total equity | 1 000 883 | 106 658 | |
| Non-current liabilities | |||
| Bond loan | 3 | 917 480 | - |
| Liability to parent company | 465 357 | 413 885 | |
| Total non-current liabilities | 1 382 836 | 413 885 | |
| Current liabilities | |||
| Trade payables | 86 499 | 37 549 | |
| Bond loan | 3 | - | 850 825 |
| Other current liabilities | 21 043 | 24 238 | |
| Total current liabilities | 107 541 | 912 612 | |
| Total liabilities | 1 490 378 | 1 326 497 | |
| Total shareholders' equity and liabilities | 2 491 261 | 1 433 155 |
| Attributed to equity holders of the parent | ||||||
|---|---|---|---|---|---|---|
| (Amounts in NOK thousands) | Note | Share capital | Share premium | Unregistered equity |
Accumulated losses |
Total equity |
| Equity 1 January 2023 | 24 705 | 164 700 | - | (82 747) | 106 658 | |
| Profit/(loss) for the period | - | - | - | (48 199) | (48 199) | |
| Share issue conversion of debt | 5 | - | - | 977 220 | - | 977 220 |
| Transaction costs | - | - | (34 796) | - | (34 796) | |
| Equity 31 March 2023 | 24 705 | 164 700 | 942 424 | (130 946) | 1 000 883 |
| 2023 | 2022 | ||
|---|---|---|---|
| 01.01-31.03 | 01.01-31.03 | ||
| (Amounts in NOK thousands) | Note | Unaudited | Unaudited |
| Operating activities: | |||
| Net cash used in operating activites | (3 536) | (10 982) | |
| Investing activities: | |||
| Investment in mine under construction | (82 123) | - | |
| Net cash used in investing activities | (82 123) | (116) | |
| Financing activities: | |||
| Share issuance | - | - | |
| Transaction costs, share issue | (34 796) | - | |
| Interest and financing fees paid | (22 970) | - | |
| Net proceeds from borrowings from parent company | 1 018 052 | 9 747 | |
| Net cash from financing activities | 960 286 | 9 747 | |
| Net change in cash and cash equivalents | 874 627 | (1 351) | |
| Cash and cash equivalents at beginning of period | 32 377 | 2 447 | |
| Effect of exchange rate fluctuation on cash held | (420) | - | |
| Cash and cash equivalents at end of period | 906 585 | 1 096 | |
| Net change in restricted cash | 4 215 | - | |
| Restricted cash at beginning of period | 4 215 | - | |
| Restricted cash at end of period | 8 430 | - | |
| Restricted and unrestricted cash at end of period | 915 015 | 1 096 |
These interim financial statements have been prepared in accordance with the Norwegian Accounting Act and generally accepted accounting principles in Norway. They do not include all the information required for full annual financial reporting and should be read in conjunction with the annual financial statements of Nordic Rutile AS for the year ended 31 December 2022.
This report was authorized for issue by the Board of Directors on 9 May 2023.
The accounting policies adopted are consistent with those followed in the preparation of the Company's annual financial statements for the year ended 31 December 2022.
In April 2022 Nordic Rutile AS exercised the agreements with landowners to acquire the main properties at Engebø, which includes immediate access to the process plant area. Nordic Rutile is in construction of the Engebø Project, which work includes continuation of Detail Engineering, procurement and fabrication of critical process equipment, groundwork on the mine access road and ground – and building works on the process plant area, and tunnel work and raise drilling of the vertical ore pass.
The direct costs related to the work described above has in Q1 2023 been capitalized in the balance sheet as Mine under construction.
In November 2022, Nordic Rutile AS completed the issue of a USD 100 million 5-year senior secured bond. The bonds are administered by Nordic Trustee. The bond has fixed coupon of 12.5% per annum, with interest payable quarterly in arrears, and an issue price of 90%.
The net proceeds of the bonds of USD 90 million was on issue deposited into a Bond Escrow account, together with issue discount of USD 10 million, four months bond interest of USD 4.2 million, and transaction costs of USD 3.3 million, transferred by Nordic Rutile AS in line with the bond terms. Following conditions of the Engebø Project being fully funded, which were satisfied on 8 March 2023, the bonds are reclassified to no-current liability in the statement of financial position. The proceeds from the bond will be released in three tranches from the Bond Escrow account after satisfaction of certain pre-disbursement conditions precedent, to be used for costs and expenditures to bring the Engebø Project into commercial production.
Financial income in Q1 2023 consist mainly of:
Financial costs in Q1 2023 consist mainly of:
In March 2023 a share issue by conversion of debt to parent company was approved. The share issue increases the share capital with NOK 1,372,500 from NOK 24,705,000 to NOK 26,077,500 by increasing the par value with NOK 100 per share from NOK 1,800 to NOK 1,900. The share issue price is total NOK 71,200 per share, and the total share issue is NOK 977,220,000. The share issue was registered in April 2023 and is classified in the balance sheet as of 31 March 2023 as unregistered equity. Following registration of the share issue in April 2023 Nordic Rutile's share capital is NOK 26,077,500 divided into 13,725 shares, each with a par value of NOK 1,900.
In April 2023 the USD 100 million 5-year senior secured bond was listed on Nordic ABM with ticker: NORUT01 PRO.
See note 5 for information about share issue by conversion of debt to parent company registered in April 2023.
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.