Nordic Mining ASA — Annual Report 2013

May 2, 2014

ANNUAL REPORT 2013

A forward-looking resource company with integrated operations in exploration, extraction and production of high-end minerals and metals.

Photos: Olav Heggøe (CEO, Board of Directors and Management team), Kjetil Alsvik (Board member Hilde Myrberg), Ingimage, Nordic Mining, Keliber Design and production: signatur.no

CONTENT

CEO's report	5
Operations
• Nordic Rutile – rutile (titanium dioxide)	6
• Nordic Quartz – high-purity quartz	10
• Keliber – lithium/lithium carbonate	12
• Øksfjord – mineral exploration	15
• Nordic Ocean Resources	16
• Technology development – alumina	17
Board of Directors' report	18
The Board of Directors	26
The Management team	27
Corporate governance	28
Shareholder matters	34

FINANCIAL STATEMENTS/NOTES

Consolidated income statements	36
Statements of comprehensive income	37
Consolidated statements of financial position	38
Consolidated statements of changes in equity	40
Consolidated cash flow statements	41
Notes to the consolidated financial statements	42
Corporate accounts for Nordic Mining ASA	62
Responsibility statement by Directors	75
Auditor's report	76
Articles of association	78
Financial calendar 2014	78

CEO'S REPORT

Dear shareholder!

Year-by-year and month-by-month we slowly realise our common faith, that the climate is changing, and that much can be blamed on our joint releases of climate gases. The political ambitions and the actual production of green energy are increasing. The green awareness is growing and will transform our society along with a wave of new industries in the years to come.

At the same time we do not realise the corresponding need for mineral feedstock in order to support the technological transformation. Too often I recognise that people's perception seem to be that the mining industry is something we may get rid of in the same transformation, along with production of coal and other fossil fuels. It is challenging to understand this lack of knowledge about realities regarding basic products and value chains, and our common need for minerals on the path towards a sustainable society.

Still today, most people do not see the big picture in terms of the crucial role of the minerals. This is a general observation with regard to the use of minerals in technologies, products and applications that we take for granted in a modern society, but the lack of knowledge and perspective is even more striking when it comes to the role of minerals for a greener society. Improved production methods, increased recycling and substitution of critical minerals are necessary and important activities, but will not eliminate our need to continue mining of new mineral resources. Ample sourcing and sustainable use of minerals will be a coming global trend, and an important part of the solution.

The Engebø Rutile project, short-travelled minerals

2013 was a year of turmoil for the Engebø project and lead to a dramatic and challenging situation for Nordic Mining. The Company reviewed its strategy and focused its resources towards the securement of the final permits for the Engebø project. In August 2013, the Company started up a comprehensive program for additional measurements of the circulation patterns in the Førdefjord, to be continued over a period of 12 months.

The Norwegian government has focused on certain land-based industries in its new political platform. Forestry, fish farming and mineral industry are all export industries that the government intends to support and strenghten. The platform also underlines that sea disposal of tailings will be an alternative where suited and in combination with strict regulations and environmental monitoring.

In the process towards permitting we have been increasingly aware of the many environmentally friendly aspects of the Engebø project. A modest open pit mine, underground crushing operation, and a limited land area footprint are all contributing positively. Further, the project's ability to supply the European market with short-travelled titanium feedstock represent a reduction of climate gas emissions

of up to 80% compared to overseas imports. The fact that titanium is used in a lot of environmentally friendly and useful applications add to the positive picture. In an international perspective, Engebø is a true, green mining project.

What may the oceans bring?

Nordic Ocean Resources AS (NORA) made history in 2013. Together with its project partner NTNU and supported by Statoil, the joint pre-project finalised the first resource assessment in history for mineral resources on the Norwegian continental shelf. The study reported a remarkable NOK 400–1,000 billion value estimate for Norway's seabed minerals. This has been an eye-opener for many

and will lead to increased wish for further knowledge in a number of areas. The potential of commercially exploitable resources on the Norwegian seafloor will certainly have a significant impact on the initiatives taken by EU under the "Blue mining" program. NORA certainly represents an exciting future.

Minerals for a sustainable future

Our overall strategy for mining and production of high-end minerals and metals remain unchanged. We look forward to continue our journey together with you, creating values for the society through sustainable mining and production of minerals.

Oslo, 24 April 2014

Ivar S. Fossum, CEO

OPERATIONS NORDIC RUTILE – rutile (titanium dioxide)

Nordic Rutile holds the rights to a significant rutile deposit at Engebø in Naustdal municipality in Sogn og Fjordane in Norway. Rutile is a titanium feedstock, high in demand and used in the production of pigments, titanium metal and welding rods. The planned rutile production at Engebø will significantly increase economic activity and value creation in Naustdal and in the surrounding regions.

The industrial area plan and the application for a discharge permit for the Engebø project are being considered by the ministries of Local Government and Modernisation, and Climate and Environment, respectively. Nordic Rutile is collecting supplementary environmental information to comply with the government's request in March 2013, and thus provide for the government's final consideration of the permits.

The Engebø Project

Through the wholly owned subsidiary Nordic Rutile, Nordic Mining will establish industrial production of rutile concentrate (TiO2) based on its rutile deposit at Engebø in Naustdal municipality in Norway. The Engebø rutile deposit is one of the largest unexploited rutile deposits in the world and has the highest in situ grade of rutile compared to current rutile producers and development projects. Nordic Mining's internal estimate for the NPV of the Engebø project is USD 466 million after tax based on an 8% discount rate.

The mineral deposit at Engebø also contains significant quantities of garnet, and Nordic Mining plans to produce high quality garnet as a by-product. Garnet has various industrial applications and can replace industrial sands containing free silica which is harmful for health.

Environmentally friendly products and solutions

Rutile is an environmentally friendly mineral and an important titanium feedstock. It is considered a strategic mineral by the EU. Rutile is a high-end raw material used in the production of environmentally friendly pigments for paints, plastics and paper, and in the production of titanium metal and welding rods. Rutile is of a major industrial importance and has a number of applications within health and medicine, environmental technologies and consumer products. Due to its high bio-compatibility titanium is particularly suitable and demanded in prostheses and implants for the human body.

Also in other applications, titanium-based products and materials from rutile contribute to environmental advantages, e.g. weight reduction, lower fuel consumption and reduced greenhouse gas emission in modern airplanes. Further, titanium dioxide has a photocatalytic effect that in various surface products removes NOx pollution from the air.

Nordic Mining strives to ensure environmentally friendly extraction, production and shipping, as well as a sustainable solution for disposing of mineral residues. Calculations indicate that shipping of rutile from Engebø to customers in Europe will reduce CO2 emission by 80% compared with long-distance supply from i.a. South Africa. The moderate internal transportation at Engebø will also contribute to a low CO2 footprint for the project.

Industrial area plan and discharge permit

The municipality boards in Naustdal and Askvoll approved the industrial area plan for the rutile production at Engebø in May 2011. In June 2011, the county governor of Sogn og Fjordane forwarded the industrial area plan, including an objection from the Directorate of Fisheries to the Ministry of Climate and Environment for a decision. The county governor recommended approval of the plan.

Despite the comprehensive environmental impact assessments undertaken by Nordic Mining, the strong local and regional political support for the project, considerable anticipated positive regional effects for industries and the society in general, and a solid recommendation from the Ministry of Trade, Industry and Fisheries, the Ministry of Climate and Environment in March 2013 requested supplementary information for its final consideration. The request was related to e.g. sea water circulation, solution for mineral residue disposal, use of fresh water etc. In spring 2013, Nordic Mining and the Ministry clarified the scope of a survey and investigation program for the requested information.

DNV GL has been engaged for a measuring program regarding documentation of water circulations in the fjord and risk assessments regarding the planned sea disposal for the mineral residues. DNV GL will also execute additional investigations (e.g. ROV survey and sample fishing) of possible spawning grounds for fish and possible endangered, near-endangered or valuable species and natural resources in the disposal area.

The measuring program for water circulation started in August 2013 and 11 metering stations were installed in the Førdefjord. The measurement program will be executed for a 12 months period to include seasonal variations. Water currents will be measured using advanced profiling metering instruments which will record current velocities and directions at different water depths. Further, hydrographic measurements will be carried out continuously with recording parameters like temperature, salinity, density, pressure and oxygen content in the water.

Placing of measuring equipment into the fjord.

RUTILE

PROPERTIES

The mineral rutile is composed of titanium and oxygen, and is a titanium dioxide (TiO2). Rutile has among the highest refractive indices of any known mineral. Natural rutile is often found as deep reddish brown crystals. Rutile is used to produce titanium metal.

So far, two dataset from the measurement program have been gathered by DNV GL, first in November 2013, and second in February 2014. Data from the survey stations have been collected from various locations in the fjord. The results show that the water circulation is moderate within the area of the planned tailings disposal. The results are in line with the measurements included in the environmental impact assessment for the project. The results reflect the typical circulation pattern for this type of fjord and depth, and indicate that the settling of the inert, nontoxic mineral tailings will be efficient.

The Norwegian government which took office in October 2013 has underlined its growth ambitions for the mineral industry. Nordic Mining has confidence that the comprehensive environmental impact assessments undertaken for the Engebø project and the additional information following from the survey and investigation program will provide general comfort in the plans, and thus will ensure a sustainable realisation of the significant values that the project will bring to the society.

Commercial situation

Europe has a significant supply deficit in titanium feedstock. Currently, the main volumes of rutile and other feedstock into Europe come from Australia, Africa and North-America. For industrial customers in Europe supply from Engebø will represent a substantial logistical advantage compared to overseas alternatives.

The market for rutile products has developed positively over the last years. In 2013, the price level has come down compared with the level in 2012. The price level is currently around USD 1,000 – 1,100 per tonne FOB Australia for bulk products.

Market information indicates a tightening of the supply/demand balance going forward. Due to its high grade and positive properties in processing rutile is a particularly attractive titanium feedstock. Emerging economies like for example China and India have a low consumption of titanium products per capita compared with industrialised countries. Future demand for rutile is expected to be higher than the supply as new production capacity is expected to be restricted. Overall this provides grounds for a positive long-term market outlook.

Applications for mineral residues and wall rock

Nordic Mining assesses potential products and applications for the mineral residues from the production process at Engebø. Mineral residues are inert minerals without any heavy metals or radioactive elements, and have been approved as capping materials for contaminated sediments, e.g. in harbours and other polluted areas. Further, the wall rock is considered in various concrete applications, as a soil conditioner, and as raw material for various construction purposes. The deep water port facilities at Engebø and the short distance to the European markets represent a logistical advantage also for the commercial use of the mineral residues and wall rock.

In the future, various by-products from mineral residues and wall rock may represent an important additional value for the Engebø project, financially, and with regard to new industrial activity. As a consequence the need to dispose of tailings would be reduced.

TITANIUM HEARTS Scan the QR code to see video of new life-saving titanium technology.

OPERATIONS NORDIC QUARTZ – high-purity quartz

Nordic Quartz has agreements with landowners and exclusive rights for exploration and development of a quartz deposit in Kvinnherad municipality in Hordaland in Norway. Extensive testing and processing trials have shown that the quartz has a low content of contaminants and therefore can be regarded as High-Purity Quartz ("HPQ").

Background

There has been limited activity in the quartz project in 2013 due to the Group's general strategic and financial priorities. The demand for HPQ products has been lower than previous years due to changes in the global economy, and the existing producers have adjusted production to an intermediary lower demand level. The long-term outlook for quartz products in advanced industrial applications is, however, positive and Nordic Mining intends to position the Kvinnherad quartz project internationally.

Geological surveys indicate larger deposit

The Nesodden deposit consists of hydrothermal quartz situated in Proterozoic basement rocks south of the Hardanger Fault Zone. The quartz vein is about 600 meter long and on average 15 meter wide. A cross-cutting of the hillside shows that the deposit continues to at least 150 meters depth. The deposit is exposed on the surface and detailed mapping has been carried out together with NTNU. A preliminary estimate by NTNU shows that at least 2 million tonnes of hydrothermal quartz is present down to 150 meters above sea level. However, geophysical measurements indicate that the vein continue beyond this depth.

In 2012, geophysical measuring was executed with 3D interpretation of the orientation, volume and depth of the vein. The results from the measuring indicate a depth continuation of a non-magnetic body which is probably the quartz vein, to at least 150 meters depth and possibly to more than 300 meters depth. There are also indications that the vein is wider in parts. The indicated wider parts will be further investigated by surface mapping. The actual depth of the vein and the down dip quality will be verified by drilling and analysis. Drilling and analysis will be important tasks moving forward to make a JORC classified resource estimate for the deposit. The timing for this activity is yet to be decided.

Processing tests demonstrate homogenous HPQ

Comprehensive analysis and processing tests have been executed at Dorfner Anzaplan's laboratory in Germany based on samples from different parts of the quartz vein. The results indicate homogeneity and confirm the deposit as world class. Further, the potential for several high-value applications and a significant commercial value have been elaborated. The tests have involved various separation methods to remove impurities including mechanical separation and acid leaching techniques.

High-purity concentrate products similar to some of the highest priced quartz products on the market were produced. The total level of alkalis (K, Na, Li) was reduced to 0.3 ppm. This is in the range of

"Iota 6" which is one of the highest grade products on the market. Melting tests demonstrated that the bubble content in glass production is at an acceptable level.

The processing tests indicate that the Kvinnherad quartz will satisfy the requirements in the main application areas for HPQ, e.g. optical glass, high temperature light bulbs, crucibles, semiconductors and microelectronics.

Scoping study outlines a viable and profitable project

In 2012, Dorfner Anzaplan carried out an independent preliminary evaluation (scoping study) of the quartz project. The scoping study describes the development status of the deposit. The study provides a review of previous work and studies (e.g. exploration, geology, deposit size, processing etc.), a general description of the location and its characteristics, a proposed mining and processing method for the quartz, and a preliminary economic analysis of an industrial project. Further, the scoping study gives principal recommendations and describes risk factors to be considered in the project work going forward.

In the study, the Kvinnherad quartz deposit is considered to contain raw quartz sufficient for minimum 60 years of production of HPQ products at a rate of 5,000 tonnes per year. The scoping study outlines an industrial base case with mine life assumption of 30 years, estimated investments of approximately USD 50 million, a preliminary net present value after tax of USD 60 million based on 8% discount rate, and an undiscounted payback period of 4.3 years. Thus, the results from the scoping study clearly indicate the potential of a viable and profitable industrial project.

International commercial cooperation potential

Nordic Mining has established contacts with industrial companies with international commercial interests in the quartz value chain. An important activity going forward will be to test various applications for the quartz together with experienced producers and users.

Nordic Mining investigates possibilities to establish an industrial strategic partnership in order to advance the quartz project towards industrial production.

QUARTZ

PROPERTIES

Quartz is a hard mineral composed of silicon and oxygen (SiO2). Common quartz is white (milky quartz) or colourless (rock crystal). Quartz also occurs in a number of other colours.

OPERATIONS KELIBER – lithium/lithium carbonate

Nordic Mining's associated company Keliber in Finland develops deposits of high quality lithium mineral suitable for extraction and production of high-purity lithium carbonate. Lithium carbonate has a variety of industrial applications, i.a. for advanced batteries which takes up an increasing share of the total global lithium consumption. Keliber has made significant exploration progress in 2013, and the JORC compliant resource and reserve estimates are more than doubled. Nordic Mining holds 38% of the share capital in Keliber.

Background

Nordic Mining's associated company Keliber in Finland has deposits of high quality lithium mineral suitable for extraction and production of high-purity lithium carbonate. Lithium carbonate has a variety of industrial applications, i.a. for batteries which takes up an increasing share of the total global consumption.

Nordic Mining owns 38% of the share capital and is the largest shareholder in Keliber. Other shareholders are i.a. Finnish Industry Investment Ltd. and Ilmarinen Mutual Pension Insurance Company with approximately 15.6% and 13.0%, respectively.

Keliber has mining license for the Länttä lithium deposit and permits for mining, operation and waste disposal for Länttä and for production of lithium carbonate at its planned processing plant at Kalavesi in Kaustinen municipality. Currently, Keliber's main focus is to increase the resource base for its future lithium production, and the company has several prosperous exploration rights in the Ostrobothnia region which is recognised for its attractive geological properties for lithium containing spodumene.

Keliber plans to compile and conclude pre-feasibility studies before year-end 2014.

Significantly improved resource base and further regional potential

In 2013, Keliber has made significant exploration progress and documented new resources and reserves in compliance with the JORC classification standard. The main contribution to the increased resource base comes from the Syväjärvi and Leviäkangas deposits which were acquired from the Finnish government in October 2012. In total, the JORC compliant resource and reserve estimates are more than doubled in 2013.

At year-end 2013, Keliber's total JORC compliant spodumene resource and ore reserve estimates, as estimated by the independent experts Markku Meriläinen and Pekka Lovén, were as follows:

Resource category @ 0.5% Li2O cut-off	Tonnes	Li2O%
Measured	433.000	1.12
Indicated	2.897.000	1.28
Measured and Indicated	3.330.000	1.26
Inferred	321.000	0.99
Historical*	1.300.000	1.30

* Not JORC compliant historical estimate for the Emmes deposit.

Reserve category @ 0.5% Li2O cut-off	Tonnes	Li2O%
Proven	472.000	0.98
Probable	2.180.000	1.15
Proven and Probable	2.652.000	1.12

An ore reserve is that portion of a mineral resource considered technically and economical feasible in a viable mineral project. The ore reserve estimate relates to the Länttä, Outovesi and Syväjärvi deposits, and the mineral resource estimate in addition includes the Leviäkangas deposit.

In January 2014, the Finnish government accepted Keliber's offer to acquire the Rapasaari deposit. Documentation for the agreement is currently being prepared. The Geological Survey of Finland ("GTK") has previously investigated the Rapasaari deposit, i.a. with core drilling of around 3,600 meters. Further drilling is planned in 2014. Keliber plans to present updated resource and reserve estimates in Q2 2014.

Environmental impact studies

In 2013, Keliber initiated environmental impact assessment ("EIA") of its various mineral deposits in the Central Ostrobothnian lithium province in accordance with environmental legislative regulations in Finland. The aim is to conduct comprehensive EIA for the relevant lithium deposits in the area. The program for the EIA was published in February 2014 and the work is expected to be completed by the end of 2014, or early 2015.

Keliber targets to be the first battery grade Li-producer in Europe

Keliber's goal is to be the first producer in Europe of lithium carbonate. The targeted product is high-purity lithium carbonate (99.99%) which is the expected long-term preference for batteries for electrical and hybrid vehicles.

The demand for lithium carbonate and the prices for derived products have picked up in 2013. A positive long-term market trend is expected, mainly driven by strong growth in the battery sector as a consequence of increased sales of electric and hybrid cars, portable tools, and batteries for power storage and other industrial applications. Lithium has favorable properties in various combinations with other minerals/ materials in modern batteries, and extensive international product development is ongoing. Lithium carbonate and lithium minerals are also used in other industrial segments, including in various glasses and melting industries.

LITHIUM

PROPERTIES

Lithium is a silver white metal that belongs to the alkali metal group. It is the lightest of all metals and so soft it can be cut with a knife. Lithium is highly reactive and never occurs freely in nature, but only appears in compounds.

Analyses show that Keliber's lithium carbonate will have a low level of impurities and therefore will qualify as battery grade quality. Battery grade products with lithium content above 99.9% earn a substantial price premium compared with standard/technical grade products. The price premium is determined i.a. from the purity level and the types of contamination in the product. The mineral origin of

Keliber's product is regarded an advantage with regard to product quality. Also the location is attractive as there is currently no lithium production in Europe.

KELIBER Scan the QR code to see Keliber's presentation video.

OPERATIONS ØKSFJORD – mineral exploration

Nordic Mining's exploration work in Reinfjord on the Øksfjord Peninsula provides significant insight to a prospective geological province, the "Seiland Igneous Province". In 2012, Nordic Mining discovered a new type of nickel, palladium and platinum mineralisation by drilling in the Reinfjord intrusion. The results show that the magmatic region has an ore forming potential and inspires further exploration and drilling. In 2014, Nordic Mining has expanded the exploration rights into new prospective areas in the "Seiland Province".

In 2012, Nordic Mining executed ground geophysical measurements in Reinfjord. The ground geophysical measuring confirmed the results from previous exploration activities indicating a possible mineralisation present at approximately 100 meters depth in the Reinfjord intrusion.

Further in 2012, exploration drilling was executed in Reinfjord. Chemical analyses of two drill holes verified two mineralised zones carrying interesting grades of nickel, copper and platinum type elements. The table below shows the best intersected metal grades in drill hole RF-1.

In fall 2013, the Geological Survey of Norway ("NGU") executed an extensive program for airborne geophysical measuring in northern Norway, including parts of the Øksfjord Peninsula. An area with low resistivity that may indicate a metal bearing mineralisation was

discovered in the Loppa municipality east of the Reinfjord exploration rights. Nordic Mining secured the exploration rights to this new discovery in January 2014 and is planning to investigate the quality of the geophysical anomaly.

In March 2014, a research program coordinated by NTNU and where Nordic Mining is a partner was granted NOK 2 million from NordMin, a research network funded by the Nordic Council of Ministers, to explore and define the genesis of the Reinfjord Intrusion. The project will involve both field mapping and a drilling program in the Reinfjord area. This work will give important information for Nordic Mining to further evaluate the ore-forming quality and potential of the Reinfjord Intrusion.

Nordic Mining will consider partnership models in order to investigate the Reinfjord metal discovery in more detail and to further explore the prospective magmatic region.

	From	To	Lenght	Nickel	Copper	Cobalt	Gold	Palladium	Platinum	PGE+Au	Sulphur
Hole ID	(m)	(m)	(m)	%	%	%	g/t	g/t	g/t	g/t	%
RF-1	86	93	7	0.38	0.12	0.02	0.03	0.03	0.03	0.09	0.61
RF-1*	107.75	117	9.25	0.27	0.06	0.02	0.07	0.20	0.15	0.42	0.58
* including	107.75	113	5.25	0.24	0.05	0.01	0.10	0.31	0.23	0.64	0.41

OPERATIONS NORDIC OCEAN RESOURCES

Nordic Ocean Resources ("NORA") is a first-mover initiative related to seabed mineral exploration in Norway. Project work in 2013 has estimated substantial mineral values on the Norwegian seafloor. NORA has applied for submarine mineral exploration rights in Norway.

Globally, the interest for marine mineral resources has increased strongly over the last years, and a race to secure prospective exploration areas has started among countries and industrial companies. The Norwegian continental shelf is an interesting area for seabed minerals. In addition, the Norwegian oil and gas industry has developed advanced technology for subsea operations which could be applicable for mineral exploration.

In 2012, the Norwegian University of Science and Technology ("NTNU") and NORA with support from Statoil ASA entered into a cooperation regarding a pre-project to review the knowledge about seabed mineral resources in Norway and identify and prioritise needs for further research and development.

A special focus area in the project has been to increase the knowledge of possible massive sulfide mineralisation along the Mid-Atlantic Ridge. The Ridge is a sub-sea range of mountains which separates the Eurasian and the North American continental plates. In this area, marine sulfides are formed from the volcanic and hydro-thermal activities along the Ridge. The northern Mid-Atlantic Ridge between Jan Mayen and Spitsbergen is located within Norwegian jurisdiction.

In 2013, analysis and interpretations of seabed topography, structures and geology have been done by NTNU in order to disclose relevant areas for the formation of sulfides. Based on these data, and for the first time in history, a statistical mineral resource calculation has been done using the same methods as is used for oil and gas resources. The calculations give a value estimate for the seabed minerals within the Norwegian zone of NOK 430 billion. The estimation further indicates that the possible value potential could be more than NOK 1,000 billion.

NORA is a pioneering company in Norway with focus on seabed minerals and intends to play an active role in this exciting part of the industry. NORA has applied for submarine mineral exploration rights in Norway, and a granting of such will substantially anchor NORA's industrial position.

NORA is exploring industrial contacts in Norway and internationally with regards to possible cooperation on exploration and development.

SUBMARINE MINERALS Scan the QR code to see 3D animation of the Mid-Atlantic Ridge.

OPERATIONS TECHNOLOGY DEVELOPMENT – alumina

Nordic Mining has together with Institute for Energy Technology ("IFE") developed a new technology for production of alumina. The technology is an innovative solution for production of alumina from alumina-/calcium-rich mineral sources such as anorthosite, with the integrated use and storage of CO2. The technology was patented in March 2014.

Anorthosite is an alumina-rich rock type (approx. 30%) that is present in several large massifs around the world. Anorthosite may therefore potentially be a substantial global source of alumina.

The project has been ongoing since 2009 and the process has been tested and developed at IFE's laboratory at Kjeller. In 2013, the work focused on optimising the process parameters, and the leaching process was tested in a larger scale reactor at Herøya Industry Park in Porsgrunn. The results from the test showed that the anorthosite could be effectively leached under moderate process conditions.

Today's alumina production is mainly based on bauxite through the Bayer process. With the new technology alumina can be produced from alternative sources and in a more environmentally friendly manner. In addition to alumina, precipitated calcium carbonate ("PCC") and silica may be produced as by-products. PCC is a commercial commodity used as filler in paper, plastics and paint. Silica can be used as filler in tyres and plastics, and in the production of cement.

The new multi-product process gives potential for almost full utilisation of the mineral resource. Further, the process consumes 500,000 tonnes of CO2 per million tonne of alumina. This corresponds to the CO2 emissions from a medium sized oil and gas platform. The CO2 can either be stored safely and/or utilised as part of a commercial production of PCC.

A preliminary techno-economic study by the the Norwegian R&D institute Tel-Tek shows that the new technology is economically and technically feasible. Preliminary project financials were calculated for production of approximately 1 million tonne of alumina from anorthosite. The study indicated a positive NPV of NOK 0.6 billion excluding sales of by-products based on a 7.5% discount rate. A scenario with moderate sales of PCC and silica indicated a NPV of around NOK 2.7 billion (same discount rate).

Going forward, the focus will be to optimise the process, further test production of alumina and by-products, and to run the technology in pilot scale. Nordic Mining will actively seek additional partners in continuing the project.

BOARD OF DIRECTORS' REPORT

Nordic Mining ASA ("Nordic Mining" or "the Company") is a resource company with focus on high-end industrial minerals and metals in Norway and internationally. The Company's project portfolio is of high international standard and holds a significant economic potential. The Company's assets are mainly in the Nordic region. Nordic Mining and its subsidiaries constitute the Nordic Mining Group ("the Group").

Through the subsidiary Nordic Rutile AS ("Nordic Rutile"), Nordic Mining is undertaking largescale project development at Engebøfjellet in Sogn and Fjordane where the Company has rights to a substantial eclogite deposit with rutile and garnet. Nordic Mining has rights for exploration and production of high-purity quartz in Kvinnherad in Hordaland and develops the project through its subsidiary Nordic Quartz AS ("Nordic Quartz"). Nordic Mining's associated company Keliber Oy ("Keliber") in Finland plans to start mining of lithium bearing spodumene and production of lithium carbonate. Nordic Mining holds explorations rights on the Øksfjord peninsula in Troms and Finnmark where the Company has discovered a prospective area of sulphide mineralization. Through the subsidiary Nordic Ocean Resources AS ("NORA"), Nordic Mining is exploring opportunities related to seabed mineral resources.

Nordic Mining is listed on Oslo Axess.

Important events in 2013 and year-to-date General strategic priorities

• The main focus for the Group in 2013 has been the Engebø rutile project and activities related to securing permits for the project. The government has stated growth ambitions for the mineral industry and more predictable planning processes towards permitting.
• Development of the Group's other projects have continued based on external financing, or otherwise temporarily been put on hold. For some of the projects cooperation scenarios are investigated in order to maintain progress in the development work.
• The subsidiary Gudvangen Stein AS was divested in June 2013. The total number of employees has been reduced from 13 at the beginning of the year to 3 as per the date of this report.

Nordic Rutile (100%)

• In March 2013, the Ministry of Climate and Environment requested supplementary information for its final consideration of the industrial area plan and the application for waste disposal related to the Engebø project. The request was related to e.g. sea water circulation, solution for mineral residue disposal, use of fresh water etc. In spring 2013, Nordic Mining and the Ministry clarified the scope of a survey and investigation program for the requested additional information.

• A comprehensive measuring program for water circulation started in August 2013 and 11 metering stations were installed in the Førdefjord. DNV GL has been engaged for the program including risk assessments regarding the sea disposal for mineral residues. The measurement program will be executed for 12 months to include seasonal variations.
• Two datasets from the measuring have been collected so far, the first in November 2013, and the second in February 2014. The results show that the water circulation is moderate within the area of the planned tailings disposal. The results are in line with the measurements included in the environmental impact assessment ("EIA") for the project. The results reflect the typical circulation pattern for this type of fjord and depth, and indicate that the settling of the inert, non-toxic mineral tailings will be efficient in the planned deposit.
• Calculations executed in 2013 by the consultancy company Global & Local Environmental Management indicate that shipping of rutile from Engebø to customers in Europe will reduce CO2 emission by 80% compared with long-distance supply from i.a. South Africa. The moderate internal transportation of ore and products at Engebø will also contribute to a low CO2 footprint for the project.
• Nordic Mining has confidence that the comprehensive EIA undertaken and the additional information following from the

High-purity quartz Lithium

ongoing survey and investigation program will provide general comfort in the plans for the Engebø project, and thus will ensure a sustainable realisation of the significant values that the project will bring to the society.

Nordic Quartz (100%)

• The scoping study coordinated by Dorfner Anzaplan in 2012 outlined an industrial base case with mine life assumption of 30 years, estimated investments of approximately USD 50 million, and a preliminary NPV after tax of USD 60 million based on an 8% discount rate. The scoping study verified the main assumptions and framework for a viable industrial project for production of High Purity Quartz.
• Limited progress has been made on the quartz project in 2013 due to the Group's general strategic and financial priorities. Cooperation scenarios are investigated in order to progress the development work.

Nordic Ocean Resources (85%)

• In the pre-project study carried out by the Norwegian University of Science and Technology ("NTNU") and Nordic Ocean Resources with support from Statoil ASA, the value of seabed minerals within the Norwegian zone has been estimated in the range NOK 400–1,000 billion. The Norwegian zone includes a large part of the Mid-Atlantic Ridge and contains substantial volumes of i.a. copper, zinc, silver and gold.
• Nordic Ocean Resources ("NORA") has applied for mineral exploration rights on the Norwegian continental shelf and the application is considered by the Ministry of Trade, Industry and Fisheries. Sea-bed minerals are emphasised in the strategy for the mineral industry in Norway, which was presented in March 2013 by the former government, and the possible granting of exploration rights will contribute positively to the national knowledge base and NORA's position going forward.

Keliber (38%)

• In 2013, Keliber more than doubled the JORC compliant resource and reserve estimates for its contemplated lithium production. In particular the results at Syväjärvi were good and almost all drill holes intersected spodumene pegmatite ranging from 3 to 36 meters width.
• In February 2014, the Finnish government has accepted Keliber's offer to acquire the Rapasaari deposit which previously has been investigated by the Geological Survey of Finland ("GTK"). A new drilling program has been initiated, and updated resource and reserve estimates are expected in Q2 2014.
• In 2013, Keliber initiated EIA of its various mineral deposits in the Central Ostrobothnia lithium province in accordance with environmental legislative regulations in Finland. The work is expected to be completed by the end of 2014, or early 2015.
• Various process optimisation studies have been executed in 2013 and will be executed in 2014. Keliber plans to compile and conclude pre-feasibility studies before year-end 2014.

Other project activity

Technology development

• In 2013, Nordic Mining and Institute for Energy Technology ("IFE") with financial support from Gassnova finalized the project work related to production of alumina from anorthosite. In the project, high-grade alumina has been produced in a laboratory pilot with moderate process conditions. The leaching tests showed effective leaching of approximately 95% alumina within a few hours.
• The techno-economic evaluations which were executed by the Norwegian R&D institute Tel-Tek indicated positive preliminary project financials for an annual production of around 900,000 tonnes of alumina from anorthosite. The capital cost for a brownfield alumina plant was estimated to around NOK 3.7 billion (indicated accuracy +/- 35%). The study indicated a positive project NPV of NOK 0.6 billion excluding sales of by-products based on a 7.5% discount rate.
• In March 2014, Nordic Mining and IFE have submitted a patent application for the technology developed in the project.
• Cooperation and financing scenarios are investigated in order to progress with the development work.

Exploration

• Geophysical surveys and exploration drilling at Reinfjord on the Øksfjord Peninsula in 2012 indicated promising potential of Ni-PGE mineralization.
• In January 2014, Nordic Mining was granted two new exploration rights east of the Reinfjord prospect. Electromagnetic data from the Geological Survey of Norway ("NGU") show an anomaly with particularly low resistivity in the granted area.
• In March 2014, a research program coordinated by NTNU and where Nordic Mining is a partner was granted NOK 2 million from NordMin to explore and define the genesis of the Ni-PGE deposits at Reinfjord. The project will involve both field mapping and a drilling program. NordMin is funded by the Nordic Council of Ministers.

Financial performance

For comparison, numbers in brackets relate to the comparable period in 2012. The 2012 figures have been adjusted to reflect that Nordic Mining has divested Gudvangen Stein and no longer holds a controlling interest in Keliber. Further, the 2012 figures have been restated for discontinued presentation of Gudvangen Stein and the implementation of IAS 19R as described in note 2 to the financial statements.

Operating loss for the Group in 2013 was NOK -18.7 million (NOK -24.7 million). The operating loss was mainly related to costs in connection with the Engebø rutile project and general corporate expenses.

As a consequence of Nordic Mining's reduced shareholding in Keliber as from October 2012, the Group's investment in Keliber is classified as shares in an associated company. The net loss from the associated company in 2013 was NOK -3.0 million (NOK -0.7 million). An impairment loss of NOK 6.5 million related to Keliber has been recognised. The carrying amount for the investment in Keliber as per 31 December 2013 is NOK 17.0 million (NOK 23.5 million).

The net loss for the Group's continuing operations was NOK -28.1 million (NOK -25.2 million). Loss from the discontinued operations related to Gudvangen Stein (divested in June 2013) was NOK -4.3 million (NOK -11.3 million). Total net loss for the Group was NOK -32.4 million (NOK -36.5 million).

Cash flow from the Group's operating activities was negative in 2013 with NOK -19.4 million (NOK -20.6 million). Net cash used in investment activities was NOK -0.1 million (NOK -3.5 million). The investments were related to the Engebø rutile project.

In February and April 2013, Nordic Mining executed a private placement and a subsequent offering of approximately 15 million shares directed towards existing shareholders and Norwegian investors. The subscription price was NOK 0.70 per share, resulting in gross proceeds of approximately NOK 10.5 million. In August 2013, Nordic Mining executed a rights issue of 80 million shares at a subscription price of NOK 0.30 per share. The gross proceeds from the rights issue were NOK 24.0 million. For further information of the equity issues please see note 17 to the financial statements.

Nordic Mining's total assets as of 31 December 2013 were NOK 40.0 million (NOK 59.0 million). As per 31 December 2013, total equity amounted to NOK 36.3 million (NOK 36.6 million). This gives an equity ratio for the Group of 91% (62%).

As per 31 December 2013, the Group's cash and cash equivalents amounted to NOK 15.5 million (NOK 6.2 million).

The Board confirms that the financial statements have been prepared on the basis of a going concern assumption and in accordance with section 3-3a of the Accounting Act. The Board emphasises that there are elements of risk related to the long-term financing and consequently to the long-term ability to continue as a going concern. Although there are no guarantees that the Engebø

rutile project will be granted permits in 2014, the Board has confidence in the project's material parameters and subsequently the positive outcome of the government's final considerations in the matter. The Board expects that a clarification of regulatory matters for the Engebø project will be positive for the Group's financial flexibility going forward.

Main activities

The Group's activities in 2013 included the following development and exploration projects:

• Planned rutile production at Engebø through Nordic Rutile
• Planned production of high-purity quartz in Kvinnherad through Nordic Quartz
• Strategic assessments regarding the potential for seabed mineral through Nordic Ocean Resources
• Planned lithium production in Finland through the associated company Keliber
• Technology development work related to extraction of alumina from anorthosite
• Exploration on the Øksfjord Peninsula in Troms and Finnmark

Gudvangen Stein was divested in June 2013.

The Group's development projects are described in this annual report and the Board refers to relevant sections of the report for further information.

Risk management

The Group's operations are exposed to various forms of risk associated with regulatory, market, operational and financial factors. In the opinion of the Board, the Company has established management systems that address the need for satisfactory risk management and internal control.

Regulatory risk

Nordic Mining depends on permits and licenses from various authorities. Whether and when such permits will be granted, and the terms stipulated in connection with regulatory matters, are beyond the Company's control.

Of particular importance is the outcome of the pending process of the industrial area plan and the permit for waste disposal related to rutile production at Engebø. The industrial area plan is subject to approval from the Ministry of Local Government and Modernisation and the permit for waste disposal is subject to approval from the Ministry of Climate and Environment. As mentioned above, Nordic Mining is executing a survey and investigation program in order to comply with the government's request for supplementary information related to the environmental impacts of the project. The survey and investigation program will be finalised in August 2014 and the final reporting will be submitted as soon when the final results are available. A negative result from the ministries' considerations of the regulatory matters will have an adverse effect for the Group.

Also the Kvinnherad quartz project, the Keliber lithium project and other projects will depend on additional necessary governmental approvals regulating mining operations and environmental matters.

Financial risk

Financing, accounts and monitoring of the Group's liquidity situation is coordinated by the Company's CFO with the assistance of Accepta AS which has been hired to provide accounting services. The Board has established rules governing the authority of the CEO, and the CEO has established rules governing the authority of the CFO.

Nordic Mining's cash holdings are placed in bank accounts in Norwegian Kroner (NOK).

Nordic Mining will require further financing in order to continue its development and exploration activities. The progress of the development of the Group's projects can be affected by financing factors. The Board refers to comments above (see "Financial performance") with regard to further financing and assessment of important matters related to this.

The development of the Group's properties, licenses and exploration rights depends on the Company's ability to obtain financing through equity financing, debt financing, project financing or other means. There is no assurance that the Company will be successful in obtaining the required financing.

Liquidity risk

The liquidity risk is the risk that the Group will not be able to pay financial obligations on their due date. The Group has to a large extent used equity financing in order to meet liquidity requirements related to financial obligations, covering of operational losses and for acquisition of companies.

All of the Group's financial liabilities as at 31 December 2013, NOK 2.6 million, matures within 6 months from the balance sheet date.

The Group has sufficient cash to be able to settle liabilities as at 31 December 2013 and expects also to have sufficient cash for the estimated operating losses in 2014. Based on current forecast the Group's cash balance will last till the first quarter of 2015. The Board therefore emphasises that strategies for further financing will be important going forward. Nordic Mining will evaluate alternatives to ensure adequate liquidity for its prioritised projects and to provide for future financial strength and flexibility. Consequently, the Group will need to either raise more equity or to issue debt instruments depending on the development of ongoing projects.

Market risk

Mineral prices, which can be affected by a number of factors such as the development of the global economy, practical factors, etc., are beyond Nordic Mining's control.

Operational risk

Mineral extraction is a high risk activity and only a few of the areas investigated will subsequently be developed into producing mining operations. Long-term returns in Nordic Mining depend on the costs and success rates of the Group's exploration and development activities.

Nordic Mining is exposed to normal business risk associated with contracts with various suppliers.

Corporate governance

Corporate governance in Nordic Mining is defined as processes and control measures established to protect the interests of the Company's shareholders and other stakeholders. Nordic Mining's corporate governance policy is founded on prevailing statutory and regulatory requirements. The Company's principles will be revised in accordance with prevailing laws and regulations.

The Company has established principles for corporate governance, ethical guidelines and a general management structure based on the principles of "The Norwegian Code of Practice for Corporate Governance". The Board has provided a detailed report on corporate governance pursuant to the Code of Practice in this annual report; please refer page 28–33 for further information.

Sustainability

Nordic Mining assumes responsibility for how the core operations of the Group may impact social, environmental and financial aspects of local communities and internal and external stakeholders. Corporate responsibility in Nordic Mining is established in the corporate structure through the Board of Directors and the executive management team and founded on four main pillars:

• Environmental responsibility
• Value creation in a social context
• High standards for health and safety
• Strict regulations regarding anti-corruption

The Company endeavors to maintain a high standard of corporate governance with an emphasis on integrity, ethical guidelines and respect for people and the environment.

In the current stage of development, neither the Company nor the Group has any particular issues with regard to human rights, labour rights and social conditions, anti-corruption or environmental footprint.

Environmental responsibility

Nordic Mining and its subsidiaries strive to ensure that all activities are within the scope of the Company's environmental responsibilities. Nordic Mining aims to be a positive, active and contributing force in ensuring a sustainable local community and environment.

Environmental protection is exercised throughout the extractive process, and the surveying, excavation and processing of minerals should be conducted in an environmental and safe way. Excess material should in a similar way be disposed according to sustainable principles to minimise negative effects caused by the project.

Nordic Mining will, where possible, pursue mineral processing locally. This is cost efficient and enables shorter chains of transportation, which in turn saves the infrastructure and environment. The majority of the minerals mined and planned to be mined by Nordic Mining are destined for European markets. When possible the Company will pursue sea transport through deep-water ports to enable shorter, cost efficient and more environmental friendly alternatives than land transport. In connection with the Engebø rutile project,

calculations executed by the consultancy company Global & Local Environmental Management indicate that shipping of rutile from Engebø to customers in Europe will reduce CO2 emission by 80% compared with long-distance supply from i.a. South Africa. The moderate internal transportation at Engebø will also contribute to a low CO2 footprint for the project.

The environmental effect of the mining process on local communities is limited and temporary. Nordic Mining strives to utilize advanced technology and methods for safe and environmentally friendly extraction of minerals, resulting in in a positive ecological and environmental footprint.

Nordic Mining strives to use the extracted mineral as well as by-products. Rutile is used in various environmentally friendly and "green tech" applications, while the by-product garnet can be used in the production of environmentally friendly industrial sands which benefit health and environment while replacing products which are harmful to the human body. The associated company Keliber will produce lithium carbonate for batteries in hybrid and electric cars, cell phones and laptops. The demand for lithium has increased significantly over the last years, and the use of rechargeable batteries in high-tech appliances and cars results in a positive environmental benefit.

In the ongoing project development work, in particular with regard to the Engebø rutile project environmental issues are thoroughly addressed in order to secure sustainable future operations and a responsible realisation of the substantial values that the project will bring to the society.

In addition to the comprehensive EIA which was carried out in the period 2007 – 2009 in connection with the industrial area planning and the application for waste disposal for the Engebø project, Nordic Mining is currently executing supplementary measuring, surveying and investigations in order to comply with a request from the Ministry of Climate and Environment presented in March 2013. The additional investigations will be completed in August 2014. The results are reported on a quarterly basis. When the work is completed, Nordic Mining will summarise the results and report to the Ministry without undue delay.

Value creation in a social context

The social responsibility for Nordic Mining is closely linked to the local communities in which the Group operates. Minerals are often found in areas where prior to mining the communities are small, so the possibility for long term mineral production will open new routes for local value creation.

Nordic Mining aims to create value, both directly and indirectly, in the regions where the Group operates. Directly, the shareholders will receive dividend, while local authorities will receive tax payment in form of income and real estate taxes. The Group further adds to local value creation through local job opportunities and purchase of services.

Where practical and possible, Nordic Mining uses local suppliers and contractors to buy services and goods. Ahead of new projects, Nordic Mining engages with independent research and reports in order to analyse the consequences, benefits and possibilities for local value creation resulting from a specific project.

Nordic Mining relates and engages local communities in open dialogue throughout the lifecycle of the project. Local authorities and stakeholders are invited to dialogue meetings to maintain an open line of communication between the Company and the community.

An independent study of the contemplated operation at Engebø in Naustdal municipality has indicated that the operation would generate a total of 170 local positions. A further 330 positions would be generated nationally as an indirect cause of the mineral production. From the start of the project development process, Nordic Mining has been active in the dialogue with industrial and commercial parties in the region with the purpose to explore regional opportunities.

High standards for health and safety

The employees in the Nordic Mining Group are the Group's most important resource. The mining and extractive industries are by nature challenging to operate, with ever present risks to personnel and machine safety. A pro-active approach in health and safety matters will therefore be a prioritized matter in the future day-today operation.

Strict regulations regarding anti-corruption

Nordic Mining's ethical guidelines entail a set of guiding principles for the employees of the Company in the day to day operations. The ethical guidelines are established to ensure that the staff does not engage in, or participate in corruption or bribery. The Company's ethical guidelines are also communicated and followed by the subsidiary companies.

Goals and further work

Nordic Mining's work on sustainability and corporate governance is a dynamic process which will be developed in accordance with the Group's size, project activities and stage of development. Going forward, the Group's first priority and target is to submit the required supplementary environmental information regarding the Engebø project to the Ministry of Climate and Environment in order to provide comfort in the plans for mineral production and secure permits for the project. The Company will assess and prioritise other tasks and matters when the Engebø project is moved to the next phase of development.

Organisational matters

Nordic Mining currently has 3 employees.

The Board of Nordic Mining consists of three men and two women. Tarmo Tuominen has been Chairman of the Board since 2011. In 2013, Hilde Myrberg and Mari Thjømøe were elected as new board members. The composition of the Board will be evaluated in connection with the next annual general meeting in line with normal procedures.

The Company facilitates equal opportunities for professional and personal development regardless of gender. The Company has a good gender balance in its organisation and strives to maintain a good working environment. The sick absence rate in 2013 was less than 0.5% and no safety issues have been registered.

Shareholders and capital situation

The total number of outstanding shares in Nordic Mining as per 31 December 2013 was 280,504,805. The Company has one class of shares, each with a nominal value of NOK 0.10. The shares are listed on Oslo Axess and may be traded without restrictions.

The Company has around 3,000 shareholders. As per 22 April 2014, around 21% of the Company's shares were held by shareholders domiciled outside Norway.

In June 2012, the annual general meeting approved a share-based incentive program for leading employees and qualified resource persons. The Board was authorised to award options that in total gives the right to subscribe to up to 6 million new shares in Nordic Mining. In 2012 and 2013, the Board has awarded options for 4,850,000 shares to leading employees and resource persons at an exercise price of NOK 1.05 per share. Granted options can be exercised until the forthcoming general meeting on 27 May 2014.

In June 2013, the annual general meeting gave an authorisation to the Board to increase the share capital by issuing up to 80 million new shares. The Board used the authorisation in August 2013 in connection with a rights issue where 80 million new shares were issued at a price of NOK 0.30 per share. As a result, the number of shares in the Company increased to 280,504,805, which is the number of shares as per the date of this report. The net proceeds from the equity issue were approximately NOK 22 million.

Outlook

General assessments

The supply of raw materials is the subject of intense international attention and the European market is dependent on imports of a number of strategic minerals. Nordic Mining's geographic location in a stable, Nordic business climate with good infrastructure is considered a competitive advantage with regard to stability, risk and the ability to supply the European market as well as markets outside Europe.

Norway has important mineral deposits which for many years have been under-explored. This is partly explained from the oil and gas activities having attracted the greatest attention from the society and geological experts. Further, prices for mineral products and the complexity related to planning processes for permitting of new projects have restricted investors from initiating new projects.

As prices for many mineral products have increased over the last years, the commercial framework has become more attractive for new projects. Further, the strategy for the mineral industry in Norway, which was presented in March 2013 by the former government, provides a solid base for the development of a profitable and sustainable mineral industry in Norway. The new government which took office in October 2013 has emphasised its growth ambitions for

the Norwegian mineral industry and also underscored the importance of more predictable planning processes towards permitting. The government has also confirmed that sea disposal of tailings may be an acceptable solution combined with strict criteria and comprehensive monitoring of the environment. In total, this opens for a more predictable and constructive environment for the mineral industry.

Group-related matters

The Board has confidence that the comprehensive environmental impact assessments undertaken for the Engebø project and the additional information following from the ongoing survey and investigation program will provide general comfort in the plans, and thus will ensure the approval of the industrial area plan and the granting of the waste disposal permit. The Board has noted that the government's final consideration will be efficient and therefore expects regulatory matters to be clarified orderly in fall 2014. Nordic Mining will evaluate options for further financing on the background of the permitting process going forward.

For the other projects, short-term development work may be based on external financing and/or strategic partnership scenarios. In summer 2014, exploration work will be carried out in Reinfjord in cooperation with NTNU and other project partners based on financial support from NordMin.

Parent company financial result

The net lo ss for the parent company Nordic Mining ASA for 2013 was NOK -20.9 million (NOK -27.8 million). As per 31 December 2013, the total equity for the parent company amounted to NOK 109.7 million (NOK 93.8 million).

The Board proposes that the year's loss of NOK 20,886,901 in Nordic Mining ASA be transferred to retained losses.

The Company had no distributable equity as per 31 December 2013.

Oslo, 24 April 2014 The Board of Directors of Nordic Mining ASA

Tarmo Tuominen Chairman

Mari Thjømøe Board member

Kjell Roland Deputy chairman

Tore Viana-Rønningen Board member

Hilde Myrberg Board member

Ivar S. Fossum CEO

THE BOARD OF DIRECTORS

Tarmo Tuominen Chairman

Tuominen is Chief Technology Officer ("CTO") in the Finnish group Nordkalk. He is a geologist from Åbo Academy in Finland and has held various positions in the Nordkalk Group, including geologist, mining engineer, general manager of subsidiaries, and business area manager. Tuominen is chairman of the Geological Survey of Finland ("GTK") and board member of the Swedish Association of Extractive Resources, SveMin.

Hilde Myrberg

Board member

Myrberg is a lawyer from the University of Oslo, Norway and has a MBA from INSEAD, France. Myrberg has held various managerial positions in Norsk Hydro and Orkla. She is a board member of Norges Bank, the central bank of Norway, and Petoro AS, the manager of the Norwegian government's holdings in oil and gas licences on Norway's continental shelf.

Tore Viana-Rønningen Board member

Viana-Rønningen holds a Master of Science in Economics and Business Administration from the Norwegian School of Economics ("NHH") in Bergen, Norway. He has experience from Barclays Capital and in private equity investments in the area of upstream natural resources from BNRI, both in London, UK. He is a Vice President in Dag Dvergsten AS, Executive Chairman of Dentales AS and acting CEO of CellCura ASA.

Roland is CEO of Norfund, the Norwegian Investment Fund for Developing Countries. Roland holds a Master of Science in Economics from the University of Oslo, Norway. Roland previously worked as partner and CEO in ECON Management AS and ECON Analysis. As consultant, he has worked on macroeconomics, energy and environmental issues for private and public clients, in Norway and internationally.

Mari Thjømøe Board member

Thjømøe holds a Master of Science in Business Administration from the Norwegian School of Management ("BI") and is a chartered financial analyst from the Norwegian School of Economics ("NHH") in Bergen, Norway. In 2010, she completed the Senior Executive Programme at London Business School. Thjømøe has held positions as CFO and acting CEO in Norwegian Property ASA, CFO in KLP Insurance, SVP in Statoil and various positions in Norsk Hydro ASA. Thjømøe is currently running a consultancy business and is member and chairman of the board of directors of Tryg AS, Sevan Marine ASA, E-CO Energi AS, AGR ASA and SINTEF.

THE MANAGEMENT TEAM

Fossum holds a Master of Science in Mechanical Engineering from the University of Science and Technology ("NTNU") in Trondheim, Norway. He has previously held various managerial positions in the Norsk Hydro Group.

Mona Schanche Exploration Manager

Schanche holds a Master of Science in Resource Geology from the University of Science and Technology ("NTNU") in Trondheim, Norway. Schanche has previously worked as project geologist at Titania AS.

Grøndahl holds a Master of Science in Economics and Business Administration from the Norwegian School of Economics ("NHH") in Bergen, Norway. He has previously held various managerial positions in Aker, Scancem and HeidelbergCement.

CORPORATE GOVERNANCE

Nordic Mining's corporate governance principles are of key importance for ensuring confidence in the Company and to provide a basis for long-term value creation for shareholders, employees and the society as a whole.

Nordic Mining's objective is to secure the long-term value creation through exploration, extraction and processing of high-end industrial minerals and metals. In order to attain this objective, the Company shall endeavor to maintain a high standard of corporate governance with an emphasis on integrity, ethical guidelines and respect for people and the environment.

The parent company Nordic Mining ASA ("Nordic Mining" or "the Company") owns 100% of the shares in the subsidiaries Nordic Rutile AS and Nordic Quartz AS, together with 85% of the shares in Nordic Ocean Resources AS. Further, Nordic Mining ASA owns 38% of the shares in Keliber Oy which is an associated company in the Nordic Mining Group ("the Group").

Implementation and reporting on corporate governance

Nordic Mining's corporate governance policy is founded on prevailing statutory and regulatory requirements. The Company establishes its routines in line with laws and regulations that are in force at any given time. The Company's guidelines are based on the principles recommended in the 'Norwegian Code of Practice for Corporate Governance', as most recently amended on 23 October 2012 ("the Code of Practice").

In the opinion of the Board, Nordic Mining's operations in 2013 complied with the Code of Practice.

This report provides a point-by-point review of how the Company has conformed to the 15 main themes in the Code of Practice, and how the Company complies with the recommendations.

Nordic Mining has prepared guidelines for the Group concerning corporate, social and ethical conduct. The guidelines are available on the Company's website (www.nordicmining.com) under 'Investors' and 'Corporate Governance'.

Business

Nordic Mining's objectives are defined in the Company's articles of association: "The object of the Company is to carry out exploration for coal, minerals and ores, mining activity, technology development, activities that may be associated herewith, and participate in other companies anywhere in the world."

The articles of association are reproduced in full on page 78 of the annual report and are also available on the Company's website.

Objectives and strategies are drawn up for each individual company/ project and for the Group as a whole. The key strategies related to Nordic Mining's projects can be summarised as follows:

• Establish profitable production of rutile concentrate (TiO2) and garnet from the Engebø deposit
• Establish profitable production of high-purity quartz from the Kvinnherad deposit
• Investigate the potential for a new technology related to production of aluminia from anorthosite
• Establish profitable production of lithium carbonate through the associated company Keliber in Finland
• Establish a sound knowledge platform and initiate exploration related to marine mineral resources, with possible subsequent exploration and development.

Nordic Mining aims to participate in structural changes within the industrial minerals and metals sector with a view to growth and long-term value creation. This also includes evaluation of partnership models for the Group's projects in order to progress with value increasing activities.

Equity and dividends

The Group's equity as per 31 December 2013 amounts to NOK 36.3 million, i.e. 91% of the Group's total assets. On a continuous basis, Nordic Mining is evaluating alternatives to ensure adequate liquidity for its prioritised project activities and to provide for financial strength and flexibility in a longer perspective.

Nordic Mining aims to adhere to a dividend policy that is favorable to its shareholders. Distribution of dividends will be adjusted in accordance with investment requirements and other financial circumstances for the Company.

Nordic Mining has so far not paid any dividends. As per 31 December 2013 the Company has no distributable equity that could be distributed as dividends to shareholders.

On 13 June 2013, the annual general meeting adopted a resolution authorising the Board to increase the share capital by issuing up to 80 million new shares. The authorisation was valid for one year. Similar authorisations have regularly been granted by previous general meetings. The purpose is to simplify the process in the event it becomes relevant for the Group to increase share capital through share issues. The Board used the authorisation to carry out a rights issue in August 2013 in which 80 million new shares were issued.

The annual general meeting held on 12 June 2012 authorised the Board to issue up to 6 million shares in connection with an option program for leading employees and qualified resource persons. This authorisation deviates from the recommendation of the Code of Practice in that it was granted for two years. In the opinion of the Board, it is in the Company's best interests to have certain flexibility with regard to duration of the incentive program.

The Company has, as per 31 December 2013, no distributable equity that could be used to purchase its own shares. The Board has no authorisation to purchase treasury shares.

Equal treatment of shareholders and transactions with related parties

Nordic Mining has one class of share and each share entitles the holder to one vote at the general meeting. The articles of association do not place any restrictions on shareholders' voting rights. All shareholders are equal and shall be treated equally.

In the opinion of the Board, satisfactory arguments and information have been provided in connection with deviations from existing shareholders' priority rights in connection with equity issues by the Company.

The Company reports transactions with related parties on a quarterly basis. All transactions with related parties comply with the 'arm's length principle'. The Company's transactions with related parties in 2013 are described in note 24 to the consolidated financial statements.

The Company's ethical guidelines include rules intended to avoid conflicts of interest and establish that anyone who acts on behalf of Nordic Mining shall act honestly and in line with the principles for good business ethics. Nordic Mining's guidelines provide that board members and senior employees must notify the Board in the event that they either directly or indirectly have a material interest in a contract being signed by the Company. The Board is of the opinion that it is important to exercise transparency and caution in connection with transactions involving related parties.

Freely negotiable shares

All Nordic Mining shares carry equal rights and are freely negotiable. No restrictions on transactions are contained in Nordic Mining's articles of association.

General meetings

The Board of Directors seeks to ensure that as many shareholders as possible are able to participate in, and exercise their rights, at general meetings. The shareholders exercise supreme authority in Nordic Mining through the general meeting. It is important for the Company that the general meeting provides an effective forum for the shareholders and the Board.

The Company's articles of association and the provisions of the Norwegian Public Limited Companies Act assign the following functions to the general meeting:

• Election of members of the nomination committee
• Election of the external auditor and determination of the auditor's remuneration
• Approval of the annual report as required by Norwegian law, as well as the financial statements and any distribution of dividend recommended by the Board
• Consideration of any other items listed on the agenda attached to the notice of the general meeting

Nordic Mining's annual general meeting in 2013 was held on 13 June 2013. The date of the Company's forthcoming annual general meeting is 27 May 2014.

The Company's articles of association were amended in an extraordinary general meeting on 1 March 2010. The amendment entails notices of general meetings hereafter being published in stock exchange releases and on the Company's website. Notices must be published at least 21 days before a general meeting. The Company's annual report will be published on Nordic Mining's website within 30 April and at least 21 days prior to the general meeting.

General meeting notices are distributed in Norwegian with an English translation to foreign shareholders. Shareholders have the right to submit proposals to the general meeting and attend and vote in the general meeting, either in person or by proxy. The deadline for notifying attendance is normally five days before the date of the general meeting.

The nomination committee's recommendation concerning the election of board members and members of the nomination committee is published together with the notice of the general meeting. In line with the Company's guidelines, the general meeting will vote on each candidate separately.

Nordic Mining has around 3,000 shareholders who are widely distributed geographically. By means of a separate information section in the summons for a general meeting and a separate proxy form, the Company provides its shareholders with the opportunity to vote on every item on the agenda, even if they are unable to attend the meeting in person. The Company's share registrar, DNB Verdipapirservice, assists in connection with preparations for and practical matters in relation to the arrangement of the general meeting. This helps to ensure that general meetings are conducted professionally and impartially.

Representatives of the Board, executive management and the Company's auditor are always represented at the general meetings. Normally, the Company's legal advisor is also present. The general meeting is normally chaired by the chairman or the deputy chairman of the Board. In the event of disagreement as regards specific agenda items where the chairman of the meeting either supports one of the factions or for other reasons cannot be considered impartial, Nordic Mining has procedures to ensure that the meeting is chaired impartially. In such cases the general meeting will have an opportunity to appoint an alternative chairman to ensure impartiality in relation to the items on the agenda.

Nomination committee

Pursuant to the articles of association, Nordic Mining's nomination committee consists of three members, all elected by the general meeting. The committee is independent of the Company's Board and executive management. The remuneration of the members of the nomination committee is determined by the general meeting. The members of the nomination committee are elected for terms of two years. The guidelines for the nomination committee are available on Nordic Mining's website under 'Investors' and 'Corporate Governance'.

The nomination committee's duties are to:

• Provide reasoned recommendations to the general meeting concerning the election of members and deputy members of the Company's Board of Directors
• Provide a reasoned proposal to the general meeting regarding the remuneration of the board members

As of 31 December 2013, the nomination committee of Nordic Mining has the following members:

• Ole G. Klevan (chairman); lawyer with the law firm Schjødt
• Hans Olav Kvalvåg (member); employed in Ard Group AS
• Bent Nordbø (member); employed in Dag Dvergsten AS

Ole G. Klevan and Hans Olav Kvalvåg have no relationships with board members or the management in Nordic Mining. Bent Nordbø is employed in Dag Dvergsten AS, which also employs the Company's board member Tore Viana-Rønningen.

Corporate assembly and Board of Directors; composition and independence

Pursuant to the Public Limited Liability Companies Act, Nordic Mining is not required to have a corporate assembly.

The Board of Directors of Nordic Mining has five members. The management team is not represented on the Board. The Chairman of the Board and the other board members are elected by the general meeting for terms of two years following the recommendation of the nomination committee. All board members are independent of Nordic Mining's major shareholders.

Information concerning the individual board members is available in the annual report and on the Company's website. Information about candidates recommended by the nomination committee is contained in the documents accompanying the notice of the general meeting which is published on the website.

Information about board members' remuneration, the number of shares held in Nordic Mining etc. is provided in the notes to the consolidated financial statements.

As of 31 December 2013, the Board of Nordic Mining has the following members:

• Tarmo Tuominen, Chairman
• Kjell Roland, Deputy Chairman
• Mari Thjømøe, board member
• Hilde Myrberg, board member
• Tore Viana-Rønningen, board member

The work of the Board of Directors

The Board of Nordic Mining has the overall responsibility for managing Nordic Mining, which includes guiding the Company and the Group in its implementation of goals and strategy. In addition, the Board is responsible for monitoring and controlling Nordic Mining's operations with a view to ensuring the highest possible level of value creation for the Company and its shareholders.

At the start of each calendar year, the Board schedules board meetings for the coming year, with an outline of the main points on the agenda for each meeting. The agenda items reflect the Board's main duties for the overall governance of the Group and for the general monitoring of the Group's activities. Goals/milestones are established for the coming year of operations as well as plans for how to achieve them. The status of the milestone plan is reported to the Board by the management and is regularly discussed by the Board.

The Board has established instructions for the Board and the CEO, and the CEO has established instructions for the CFO. These instructions cover issues concerning the Board's duties and responsibilities, the CEO's duty to inform the Board, and procedural rules for the Board's work. The Board is aware of its responsibilities when dealing with items in which a board member is, or has been, actively involved.

So far the Board has not established a subcommittee or Board committee to prepare items for consideration by the Board. The Board has considered the establishment of an audit committee, but has concluded that at present there is no need for an audit committee. An audit committee will be established when the Company fulfills the applicable criteria. Further, the Board has decided that at present there is no need to establish a separate compensation committee. In the Board's opinion, evaluations linked to the remuneration of senior management are undertaken most appropriately, given the Company's current phase of development, by the Board acting as a whole.

The Board regularly reviews its work and the need for competence in the Company and the Group. The Board has so far not deemed it appropriate to produce a special annual report on the Board's work. When required, the Board discusses matters related to the Board's work with the nomination committee.

Risk management and internal control

The Board is responsible for ensuring that the Company has good internal control and a well-functioning system for risk management. The Board's annual plan includes a review of the Company's risk areas and internal control system, as well as of the Company's core values and ethical guidelines. The Board and the management are of the opinion that the current governance systems satisfactorily address the need for risk management and internal control.

The management of Nordic Mining is responsible for establishing and maintaining an adequate level of internal control with regard to the Company's financial reporting. Internal control with regard to financial reporting is a process that is designed to provide reasonable certainty that financial reporting is reliable and that financial statements for external purposes are prepared in accordance with the International Financial Reporting Standards ("IFRS"), as adopted by the EU. The accounting principles applied by the Group conform to the IFRS as published by the International Accounting Standards Boards (IASB). A summary of significant accounting principles as well as discussion of risk factors are included in note 2 and note 21, respectively, to the consolidated financial statements.

The Company has hired Accepta AS as the Group's accountants. Routines have been established for accounting work and reporting.

Some types of risk are insured with external insurers. Nordic Mining has agreed various policies to insure both people and property, together with a liability insurance for the board members.

Remuneration of the Board of Directors

Remuneration of the board members is fixed annually on a retrospective basis by the general meeting following recommendations from the nomination committee. The level of remuneration shall reflect the individual board member's responsibilities, competence, and time spent, as well as the complexity of the business. The remuneration does not depend on Nordic Mining's financial performance.

No option agreements have been entered into with board members.

Information concerning remuneration and fees paid to board members in 2013 is presented in note 24 to the consolidated financial statements.

Remuneration of executive personnel

Pursuant to section 6-16a of the Public Limited Liability Companies Act, the Board prepares an annual statement on the setting of salaries and other remuneration for the senior management. The statement is presented to and considered by the general meeting. The key principles underlying the remuneration of senior management for 2013 have been that the total packages should reflect the responsibilities and duties undertaken by each individual in the executive management, and that the employee should contribute to the long-term value creation in the Group. In the opinion of the Board, it is crucial for Nordic Mining to offer competitive salaries and conditions in order to attract the qualities and expertise necessary to promote the strategic development of the Group.

In addition to regular salaries, share option agreements have been entered into with the members of the management team. The option agreements entitle the holders to purchase a limited number of shares at a fixed price (NOK 1.05 per share). The share price on the allocation date was NOK 1.03 per share. The Company's option program was approved by the annual general meeting on 12 June 2012 and is a continuation of programs the Company has operated since its establishment in 2006. Granted options in the current option program can be exercised until the date of the annual general meeting in 2014; 27 May 2014.

Information concerning remuneration paid to senior management in 2013 is presented in note 24 to the consolidated financial statements.

Information and communications

Nordic Mining has adopted guidelines designed to ensure that its information policy is based on the principles of openness and the equal treatment of all shareholders and participants in the securities market. The objective is to have accounting and financial reporting systems in which investors have confidence. Nordic Mining's accounting and financial statements in accordance with IFRS as adopted by the European Union are therefore transparent.

The Company's management is responsible for communication with the capital markets and for the relations between the Company and the shareholders and potential new investors. In some cases, also board members participate in the dialogue with investors. Nordic Mining's annual and interim reports provide comprehensive information about the Group's operations.

The financial reports and other information are published electronically and simultaneously to all target audiences. All shareholders are treated equally in relation to access to financial information. All reports, press releases, presentations etc. are available on Nordic Mining's website.

The Company's financial calendar is published on the website and is included on page 78 in the annual report.

Take-overs

Nordic Mining's articles of association do not set any restrictions on acquisition of the shares in the Company. In the event of a take-over bid for Nordic Mining, the Board will follow the overriding principle of equal treatment of all shareholders. Further, the Board will strive to ensure that the Company's business activities are not unnecessarily disrupted. The Board will strive to ensure that the shareholders are given sufficient information and time to assess the offer.

The Board will not seek to prevent any take-over bids unless it believes that the interests of the Company and the shareholders justify such actions. The Board will not exercise mandates or pass any resolutions with the intention of obstructing any take-over bid unless it is approved by the general meeting following the announcement of the bid.

The Board will issue a statement in accordance with statutory requirements and the recommendations in the Code of Practice, including considering to obtain a valuation from an independent expert.

Transactions that in effect have as a consequence a sale of Nordic Mining's business as a whole will be subject to approval by the general meeting.

Auditor

Nordic Mining's auditor is elected by the general meeting and is independent in relation to the Company.

The auditor's work is based on a plan that is presented to the Board on an annual basis. The auditor attends board meetings that discuss and approve the Group's and the Company's annual reports. At such meetings the auditor gives a statement of any material changes to Nordic Mining's accounting principles and provides an assessment of material accounting estimates, as well as a complete account of any situations where there has been disagreement between the auditor and the management. The auditor shall, at least once a year, provide the Board with a review of the Company's control routines and potential areas of improvement in relation to accounting. When required and at least once a year, the auditor meets with the Board with no members of the management present. The Board also has contact with the auditor as and when required outside the situations mentioned above.

The Board is of the opinion that it enjoys good communications with the auditor.

Nordic Mining has to a very limited extent assigned the auditor for services other than auditing. If and when required, the Board will prepare guidelines regarding the Company's use of other services from the auditor.

The auditor's remuneration is determined by the general meeting.

Information of the fees paid to the auditor in 2013, including breakdown between statutory auditing and other assistance/service, is presented in note 6 to the consolidated financial statements.

Oslo, 24 April 2014 The Board of Directors of Nordic Mining ASA

Tarmo Tuominen Chairman

Mari Thjømøe Board member

Kjell Roland Deputy chairman

Tore Viana-Rønningen Board member

Hilde Myrberg Board member

Ivar S. Fossum CEO

SHAREHOLDER MATTERS

Nordic Mining ASA is a resource company with focus on high-end industrial minerals and metals in Norway and internationally. Nordic Mining's shares are listed on Oslo Axess with the ticker "NOM".

Nordic Mining has one class of share and each share entitles the holder to one vote. The share's face value is NOK 0.10. The shares are freely negotiable and have been listed on Oslo Axess since 14 September 2007 (ticker "NOM"). The shares in Nordic Mining are registered with the Norwegian Central Securities Depository ("VPS") with the identification number ("ISIN") NO 0010633183.

Share capital

As per the date of the annual report, Nordic Mining's share capital amounts to NOK 28,050,480.10 divided into 280,504,805 shares. The Company's share capital and the number of shares have developed as shown in the table below.

The Company's annual general meeting held on 12 June 2012 authorised the Board to issue up to 6 million new shares in connection with an options program for senior management and qualified key personnel. The authorisation is valid until the annual general meeting in 2014. The Board has awarded options for 4,850,000 shares to employees and associated key people at an exercise price of NOK 1.05 per share. At the date of this report none of the awarded option shares have been exercised.

In June 2013, the annual general meeting gave an authorisation to the Board to increase the share capital by issuing up to 80 million new shares. The Board used the authorisation in August 2013 in connection with a rights issue where 80 million new shares were

issued at a price of NOK 0.30 per share. As a result, the number of shares in the Company increased to 280,504,805, which is the number of shares as per the date of this report.

The Company does not own any of its own (treasury) shares, and no authorisation exists to purchase its own shares.

Shareholders

The Company's largest shareholders as per 23 April 2014 are listed on the next page. Information about the largest shareholders as per 31 December 2013 is given in note 23 to the consolidated financial statements.

The number of shareholders in Nordic Mining as per April 2014 is around 3,000. As per April 2014, around 20% of the shares were held by shareholders domiciled outside Norway.

The Company's Board and management team own a total of around 2.5% of the shares in the Company.

Trading of share and price development

Shares in Nordic Mining are traded on a daily basis on Oslo Axess. The trade has increased steadily over the last years. Around 247 million shares were traded in 2013 (77 million in 2012). The Company has no agreement with brokers or financial institutions concerning liquidity guarantees relating to the share.

Year	Transaction	Change in share capital (NOK)	Face value per share (NOK)	Sub. price per share (NOK)	No. of shares after transaction	Share capital (NOK)
2006	Demerger from Rocksource ASA	n/a	0.10	n/a	14 359 070	1 435 907.00
2006	Share issue	1 435 907.00	0.10	1.10	28 718 148	2 871 814.00
2007	Private placement	1 090 000.00	0.10	2.50	39 618 140	3 961 814.00
2007	Share issue	1 386 183.50	0.10	2.50	53 479 975	5 347 997.50
2008	Private placement	3 333 333.30	0.10	1.50	86 813 308	8 681 330.80
2008	Share issue	510 400,00	0.10	1.53	91 917 308	9 191 730.80
2008	Share issue	355 278.30	0.10	1.50	95 470 091	9 547 009.10
2010	Private placement	2 000 000.00	0.10	1.00	115 470 091	11 547 009.10
2010	Share issue	1 000 000.00	0.10	1.00	125 470 091	12 547 009.10
2011	Private placement	1 250 000.00	0.10	1.45	137 970 091	13 797 009.10
2011	Share issue	750 000.00	0.10	1.45	145 470 091	14 547 009.10
2012	Share issue	4 000 000.00	0.10	0.90	185 470 091	18 547 009.10
2013	Private placement	896 601.70	0.10	0.70	194 436 108	19 443 610.80
2013	Share issue	606 869.70	0.10	0.70	200 504 805	20 050 480.10
2013	Share issue	8 000 000,00	0.10	0.30	280 504 805	28 050 480.10

Development of Nordic Mining's share price

Key figures for the Nordic Mining share

Year	Share price as per 31.12 (NOK)	High (NOK)	Low (NOK)	No. of shares traded	Market cap. as per 31.12 (NOK)
2009	0.97	1.75	0.55	17 million	93 million
2010	1.41	1.67	1.04	40 million	177 million
2011	0.96	2.28	0.91	50 million	140 million*
2012	0.90	1.48	0.79	77 million	167 million
2013	1.27	1.47	0.31	247 million	356 million

* Exclusive value of subscription rights listed as per year-end.

The largest shareholders of Nordic Mining as per 23 April 2014

	Shareholder	Number of shares	% ownership
1	Nordnet Bank AB	22 738 569	8.11 %
2	Skagen Vekst	17 428 114	6.21 %
3	MP Pensjon PK	14 319 952	5.11 %
4	Nordea Bank Finland	9 699 286	3.46 %
5	Finnish Industry Investment Ltd.	8 358 949	2.98 %
6	Dybvad Consulting AS	7 906 148	2.82 %
7	VPF Nordea SMB	6 688 929	2.38 %
8	Verdipapirfondet DnB	6 267 155	2.23 %
9	Vicama AS	4 800 000	1.71 %
10	Magil AS	4 700 000	1.68 %
11	Danske Bank A/S	4 295 712	1.53 %
12	Snati AS	4 001 219	1.43 %
13	Nordnet Pensjonsforsikring	3 987 433	1.42 %
14	Citibank, N.A.	3 485 677	1.24 %
15	Ove Klungland Holding Nil	3 439 281	1.23 %
16	Lithinon AS	2 979 054	1.06 %
17	Ole Kristian Stokken	2 500 000	0.89 %
18	Audstein Dybvad	2 375 691	0.85 %
19	Infosave AS	2 150 000	0.77 %
20	Femcon AS	2 089 280	0.74 %
	Total 20 Largest Shareholders	134 210 449	47.85 %

CONSOLIDATED INCOME STATEMENTS

			2012
(Amounts in NOK thousands)	Note	2013	Restated*
Other income		25	1 020
Payroll and related costs	4	(9 725)	(11 845)
DD&A	12	-	(13)
Other operating expenses	6	(8 998)	(13 886)
Operating profit/(loss)		(18 698)	(24 724)
Share of result of an associate	13	(2 972)	(702)
Impairment of investment in associate	13	(6 523)	-
Financial income	7	114	432
Financial costs	7	(11)	(244)
Profit/(loss) before tax		(28 090)	(25 238)
Income Tax	8	-	32
Loss from continuing operations		(28 090)	(25 206)
Loss from discontinued operations	10	(4 298)	(11 334)
Loss for the period		(32 388)	(36 540)
PROFIT/(LOSS) ATTRIBUTABLE TO
Equity holders of parent		(32 388)	(35 404)
Non-controlling interest		-	(1 136)
(Amounts in NOK)
EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY SHAREHOLDERS
Basic and diluted earnings per share for continuing operations	9	(0.14)	(0.14)
Basic and diluted earnings per share for discontinued operations	9	(0.02)	(0.06)
Basic and diluted earnings per share	9	(0.16)	(0.19)

* Restated for discontinued presentation of Gudvangen Stein (see note 10) and the implementation of new accounting principles for pensions (see note 2).

STATEMENTS OF COMPREHENSIVE INCOME

		2012
(Amounts in NOK thousands)	2013	Restated*
Net profit/(loss) for the period	(32 388)	(36 540)
OTHER COMPREHENSIVE INCOME
Items that may be reclassified subsequently to profit or loss:
- Currency translation differences	2 996	(1 589)
- Reclassification of translation adjustment	-	1 998
Items that will not be reclassified subsequently to profit or loss:
- Changes in pension estimates	(739)	1 035
Other comprehensive income directly against equity	2 257	1 444
Total comprehensive income for the period	(30 131)	(35 096)
PROFIT/(LOSS) ATTRIBUTABLE TO
Equity holders of parent	(30 131)	(34 185)
Minority	-	(911)

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

			31.12.2012	01.01.12
(Amounts in NOK thousands)	Note	31.12.13	Restated*	Restated*
ASSETS
Non-current assets
Goodwill	11	-	-	7 206
Licences	11	6 451	6 136	7 110
Minerals, property, plant and equipment	12	-	14 813	64 904
Investment in associate	13	16 951	23 450	-
Pension assets	25	-	244	-
Total non-current assets		23 402	44 643	79 220
Current assets
Inventory	14	-	2 806	3 163
Trade and other receivables	15	1 119	5 431	5 970
Cash and cash equivalents	16	15 495	6 164	3 340
Total current assets		16 614	14 401	12 473
Total assets		40 016	59 044	91 693

			31.12.2012	01.01.12
(Amounts in NOK thousands)	Note	31.12.13	Restated*	Restated*
SHAREHOLDERS' EQUITY & LIABILITIES
Shareholders' equity
Share capital	17	28 050	18 547	14 547
Share premium		227 145	206 821	177 416
Other paid-in capital		8 893	8 856	7 033
Retained losses		(230 634)	(198 246)	(162 842)
Other comprehensive income		2 877	619	(600)
Equity attributable to ordinary shareholders		36 331	36 597	35 554
Non-controlling interest		-	-	8 314
Total equity		36 331	36 597	43 868
Non-current liabilities
Interestbearing loan	18	-	6 417	7 421
Deferred tax		-	-	7 686
Lease obligations	19	-	3 522	6 085
Other liabilities	25	52	509	11 531
Total non-current liabilities		52	10 448	32 723
Current liabilities
Current portion of long-term debt	18,19	-	3 334	3 554
Trade payables	21	1 568	5 168	4 509
Other current liabilities	20	2 065	3 497	7 039
Total current liabilities		3 633	11 999	15 102
Total liabilities		3 685	22 447	47 825
Total shareholders' equity and liabilities		40 016	59 044	91 693

Oslo, 24 April 2014 The Board of Directors of Nordic Mining ASA

Tarmo Tuominen Chairman

Kjell Roland Tore Viana-

Rønningen

Mari Thjømøe Hilde Myrberg

Ivar S. Fossum CEO

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

	Attributed to equity holders of the parent
					Other
				Other	compre	Accu		Non
		Share	Share	paid-in	hensive	mulated		controlling	Total
(Amounts in NOK thousands)	Note	capital	premium	capital	income	losses	Total	interest	equity
Equity 31 December 2011, as reported		14 547	177 416	7 033	(600)	(161 568)	36 828	8 315	45 143
Equity 1 January 2012, restated*		14 547	177 416	7 033	(600)	(162 842)	35 554	8 315	43 869
Total comprehensive income		-	-	-	1 219	(35 404)	(34 185)	(911)	(35 096)
Share-based payment	5	-	-	1 823	-	-	1 823	-	1 823
Shares to non-controlling		-	-	-	-	-	-	75	75
Loss of control of subsidiary		-	-	-	-	-	-	(7 479)	(7 479)
Share issue	17	4 000	32 000	-	-	-	36 000	-	36 000
Transaction costs		-	(2 595)	-	-	-	(2 595)	-	(2 595)
Equity 31 December 2012		18 547	206 821	8 856	619	(198 246)	36 597	-	36 597
Equity 1 January 2013		18 547	206 821	8 856	619	(198 246)	36 597	-	36 597
Total comprehensive income		-	-	-	2 257	(32 388)	(30 131)	-	(30 131)
Share-based payment	5	-	-	37	-	-	37	-	37
Share issue	17	9 503	25 020	-	-	-	34 523	-	34 523
Transaction costs		-	(4 695)	-	-	-	(4 695)	-	(4 695)
Equity 31 December 2013		28 050	227 145	8 893	2 876	(230 634)	36 331	-	36 331

CONSOLIDATED CASH FLOW STATEMENTS

			2012
(Amounts in NOK thousands)	Note	2013	Restated*
CASH FLOW FROM OPERATING ACTIVITIES
Loss before income tax		(32 388)	(36 511)
Depreciation (discontinued)		854	2 744
Impairment	13	6 523	4 420
Share of loss in associate	13	2 972	702
Loss on disposal of subsidiary	10	2 186	1 474
Share-based expenses	5	37	1 823
Amortisation of interest		-	488
Changes in assets and liabilities
Inventory	14	(1 310)	357
Other receivables and prepayments	15	1 837	(1 066)
Trade payables		(210)	4 747
Other		139	224
Net cash used in operating activites		(19 360)	(20 598)
CASH FLOW FROM INVESTING ACTIVITIES
Acquisition of intangible assets	11	(315)	(2 776)
Purchases of property, plant & equipment	12	(296)	(668)
Disposal of subsidiary	10	465	(21)
Net cash used in investing activities		(146)	(3 465)
CASH FLOW FROM FINANCING ACTIVITIES
Share issuance net of transaction costs	17	29 827	33 405
Payments of loans	18	(415)	(1 000)
Payment of other liabilities		-	(3 023)
Principal payments on finance leases	19	(575)	(2 477)
Net cash from financing activities		28 837	26 905
Net change in cash and cash equivalents		9 331	2 842
Effect of changes in foreign exchange rates		-	(18)
Cash and cash equivalents at beginning of period	16	6 164	3 340
Cash and cash equivalents at end of period	16	15 495	6 164
Interest paid		265	739
NON-CASH TRANSACTIONS
Settlement of contingent liability		-	2 587

* Restated for discontinued presentation of Gudvangen Stein (see note 10) and the implementation of new accounting principles for pensions (see note 2).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - GENERAL INFORMATION

Nordic Mining ASA ("the Company") and its subsidiaries (together "the Group") focus on exploration, extraction and production of high-end industrial minerals and metals. The address to Nordic Mining's office is Munkedamsveien 45, N-0250 Oslo, Norway.

These financial statements have been approved for issue by the Board of Directors on 24 April 2014.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

Basis of preparation

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied unless otherwise stated.

The consolidated financial statements of Nordic Mining ASA have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. The consolidated financial statements have been prepared under the historical cost convention.

The annual accounts are based on the going concern assumption. See the Board of Directors' report for further information.

New and amended standards and interpretations

Amendments to standards effective for the accounting periods starting 1 January 2013 did have some effect on the financial statements. Implementation of IFRS 13 Fair value measurement and amendments to IAS 1 Presentation of financial statements had limited effects on presentation and disclosure. The implementation of the revised IAS 19 Employee Benefits had effects on recognised amounts, and Nordic Mining implemented IAS 19R on 1 January 2013. The changes have been made with retrospective application. The main changes to previously reported numbers are shown in the table below.

	As	Implemen tation effect	As
(Amount in NOK thousands)	reported	IAS 19R	restated
Opening equity 01.01.12	45 143	(1 274)	43 869
Loss after tax full year 2012	(36 479)	(61)	(36 540)
Equity – other compre
hensive income 31.12.12	(416)	1 035	619
Equity 31.12.12	36 897	(300)	36 597
Net pension asset/liability	35	(300)	(265)

Significant accounting judgments, estimates and assumptions

The preparation of the Group's consolidated financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the reporting date. Uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future.

Key areas of estimation uncertainty:

• Utilisation of tax loss carryforwards (note 8): The Group has incurred significant tax loss carryforwards, but has not recognised a deferred tax asset related to these tax losses beyond offsetting deferred tax liabilities.
• Impairment evaluation of intangible assets (note 11): The Group performs annual tests to evaluate potential impairment of intangible assets not yet in use. The recoverable amount from cash generating units is determined by estimating value in use. The value in use calculation requires the use of estimates. Management must estimate expected cash flows, including sales prices, margins, etc. as well as the discount rate. For cash generating units not yet available for use, value in use includes estimates of investments necessary to complete the unit for use.
• Investment in associates:

The Group has an investment in Keliber Oy in Finland. The business of Keliber Oy is currently in the exploration and development phase, and does not generate revenue. Uncertainty exists related to future values of this investment, and assessments have been made related to impairment of the investment. These assessments require substantial judgment. See note 13 for further information.

Basis of Consolidation

The consolidated financial statements incorporate the financial statements of the Company and the subsidiaries controlled by the Company. Control is achieved where the Company has the power to govern the financial and operating policies of another entity so as to obtain benefits from its activities.

The subsidiaries include the 100% owned Nordic Rutile AS, located in Oslo, the 85% owned Nordic Ocean Resources AS, located in Oslo, and the 100% owned Nordic Quartz AS, located in Oslo. Gudvangen Stein AS has been sold in 2013 and has been deconsolidated from the date control was transferred. The accounting principles of the subsidiaries have been changed when necessary to ensure consistency with the policies adopted by the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Non-controlling interest

Non-controlling interest is presented as a separate line item in the Group's equity. The non-controlling interest's share of the net profit/ loss is included in net loss in the income statement. Non-controlling interest includes part of the excess purchase price allocated to

identifiable assets and liabilities at the acquisition date. The non-controlling interest's share of total comprehensive income/ loss is allocated even if this results in a negative non-controlling interest.

Business combinations

The acquisition method of accounting is used to account for the acquisition of businesses and subsidiaries by the Group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling interest. The excess of the cost of acquisition over the fair value of the Group's share of the identifiable net assets acquired is recorded as goodwill.

Directly attributable transaction cost related to the business combination are expensed as incurred.

Investment in associates

The Group uses the equity method of accounting for investment in associates. Associated companies are investments in companies where the Group has significant influence, but not control. Significant influence normally exists when the Group controls between 20% and 50% of the voting rights.

Under the equity method, the investment in the associate is initially recognised at cost. The carrying amount of the investment is adjusted to recognise changes in the Group's share of net assets of the associate since the acquisition date. Goodwill relating to the associate is included in the carrying amount of the investment and is neither amortised nor individually tested for impairment. The income statement reflects the Group's share of the associate. Any transaction with the associate is eliminated to the extent of the interest in the associate.

If the Group loses control over a subsidiary, but retains significant influence, it:

• Derecognises the assets (including goodwill) and liabilities of the subsidiary
• De-recognises the carrying amount of any non-controlling interest
• De-recognises the cumulative translation differences recorded in equity
• Recognises the fair value of the consideration received
• Recognises the fair value of the investment in associate
• Recognises any surplus or deficit in profit or loss
• Reclassifies the parent's share of components previously recognised in other comprehensive income to profit or loss or retained earnings, as appropriate.

Foreign currency translation

Functional and presentation currency

Assets and liabilities in foreign entities, including goodwill and fair value adjustments related to business combinations are translated to NOK at the exchange rate at the balance sheet date. Revenues, expenses, gains and losses are translated using the average exchange rate during the period. Translation adjustments are recognised directly to Other Comprehensive Income.

Transactions and balances

Transactions in foreign currencies are initially recorded in the functional currency rate at the date of the transaction. Monetary items denominated in foreign currencies are translated at the exchange rate at the balance sheet date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised as finance income or finance expense in the income statement.

Goodwill

Goodwill that arises on business combinations represents the difference between acquisition cost and fair value of the Group's share of net identifiable net assets in the acquired entity at the acquisition date. Goodwill is initially recognised at cost and subsequently measured at cost less accumulated impairments.

Acquisition of mining and mineral properties and exploration and development of such properties

IFRS 6 "Exploration for and evaluation of mineral resources" requires that exploration and evaluation assets are classified as tangible or intangible according to the nature of the assets acquired.Some exploration and evaluation assets should be classified as intangibles, such as drilling rights and capitalised exploration costs. When technical feasibility and commercial viability of extracting a mineral resource is demonstrable, the assets should be reclassified as tangible assets. Evaluation and exploration assets that are classified as intangible assets are tested for impairment prior to reclassification.

Exploration and development for mineral properties

The Group employs the successful efforts method to account for exploration and development costs. All exploration costs, with the exception of acquisition costs of licenses and direct drilling costs of exploration wells are charged to expenses as incurred. Drilling costs of exploration holes are temporarily capitalised pending the evaluation of the potential existence of mineral reserves. If reserves are not found, or if discoveries are assessed not to be technically and commercially recoverable, the drilling costs of exploration holes are expensed. Costs of acquiring licenses are capitalised and assessed for impairment at each reporting date.

Property, plant and equipment

The Group's property, plant and equipment, consisting of property, buildings, machinery and equipment, are recorded at cost less accumulated depreciation. Acquisition costs include costs directly attributable to the acquisition of the asset.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

An item of property, plant and equipment is de-recognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset is calculated as the difference between the net disposal

proceeds and the carrying amount of the asset and is presented as a net gain or net loss in the income statement.

Depreciation is calculated on a straight-line basis over the useful life of the asset (land is not depreciated):

• Machinery and equipment: 4–10 years
• Buildings: 20–40 years
• Transportation vehicles: 5–7 years

The asset's useful life and residual amount are reviewed on an annual basis and are revised if necessary. The carrying amount of the asset is written down to recoverable amount when the carrying amount is higher that the estimated recoverable amount (further detail is provided under "Impairment of non-financial assets" below).

Impairment of non-financial assets

Non-financial assets other than goodwill:

Intangible assets that have an indefinite useful life or intangible assets not yet available for use are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

Goodwill

When testing goodwill for impairments, the goodwill is allocated to each of the Group's cash generating units that is expected to benefit from the synergies arising in the business combination. Cash generating units that include goodwill are tested for impairment annually or more frequently if there are indicators of impairment. If the recoverable amount to the cash generating unit being tested is less than the carrying amount of the assets in the unit, the impairment is allocated first to goodwill and then to the other assets in the unit on a pro rata basis. Goodwill impairments are not reversed in later periods.

Government grants

Government grants are recognised in profit and loss on a systematic basis over the periods in which the Group recognises expenses of the related cost for which the grant are intended to compensate.

Government grants related to capitalised assets are presented in the balance by deducting the grant in the calculation oft the carrying amount of the asset.

Leases

The Group has from time to time entered lease agreements for some items of property, plant and equipment. The lease agreements whereby substantially all the risks and rewards of ownership are transferred to the Group are classified as finance leases. Finance leases are recognised at the lower of fair value and the present value of minimum lease payments at the commencement of the lease.

Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. The corresponding financial lease liability is classified as lease obligations on the balance sheet. The interest element is recognised in the income statement at a constant periodic interest rate base on the remaining liability for each period. Leased assets under finance lease agreements are amortised over the shorter of useful life of the asset and the lease term. The Group has no finance lease arrangements as at 31 December 2013.

Operating lease payments are recognised as an operating expense in the income statement on a straight-line basis over the lease term.

Inventory

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the first-in, first-out (FIFO) method.

Receivables

Receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Company may not be able to collect all amounts due according to the original terms of receivables.

Cash and cash equivalents

Cash and short-term deposits in the balance sheet comprise cash at banks and other short-term highly liquid investments with original maturities of three months or less.

Share capital

Ordinary shares are classified as equity.

Share issuance costs that are incremental and directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Interest-bearing liabilities

All loans and borrowings are initially recognised at cost, being the fair value of the consideration received net of issue costs associated with the borrowing. After initial recognition, interest-bearing loss and borrowings are subsequently measured at amortised cost using the effective interest method; any difference between proceeds (net of transaction costs) and the redemption value is recognised on the income statement over the period of the interest bearing liabilities.

De-recognition of financial liabilities

The Group derecognises a financial liability (or a part of a financial liability) from its balance sheet when, and only when, it is extinguished. A financial liability is extinguished when the obligation specified in the contract is discharged or cancelled or when it expires.

Trade payables

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

Share-based compensation

Share-based payment transactions

The Company uses share-based, equity settled warrants to compensate service providers. The fair value of the services received is recognised as an expense in the financial statements over the period the options vest. The fair value of options that are fully vested on the grant date are fully recognised in the income statement when granted. Share-based compensation to employees and others providing a similar service is measured by reference to the fair value of equity instruments issued. The Company uses the Black Scholes model to measure the fair value of options and warrants.

Income taxes

Income tax expense represents the sum of the taxes currently payable and deferred tax. Taxes payable are provided based on taxable profits at the current tax rate. Deferred taxes are recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.

Deferred income tax is not recognised on temporary differences arising from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit nor loss.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable income will be available to allow all or part of the asset to be recovered.

Revenue recognition

Revenue from mineral sales is based on the value of minerals sold, net of value added tax, and is recognised at the time that mineral ore is delivered to the customer, title and risks of ownership have passed, it is probable that the economic benefits associated with the transaction will flow to the Group and the consideration can be measured reliably. The Group has no revenue from mineral sales subsequent of the divestment of Gudvangen Stein in June 2013.

Pensions

The Group has a defined benefit pension plan for its employees that meet the Norwegian statutory requirement. For the defined benefit plan, the cost of providing the benefits is determined using the unit credit method, with actual valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of asset ceiling (if applicable) and the return on plan assets (excluding interest), is reflected immediately in the statement of financial position with a charge or credit recognised in other comprehensive income in the period in which they occur. Past service costs are recognised in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset.

Provisions

A provision is recognised for environmental restoration, restructuring, and legal claims when:

• as a result of a past event, the Group has a present legal or constructive obligation
• it is probable that an outflow of economic benefits will be required to settle the obligation, and
• the obligation can be reliably measured

Contingent liabilities

Contingent liabilities are defined as:

• possible obligations resulting from past events whose existence depends on future events
• obligations that are not recognized because it is not probable that they will lead to an outflow of resources
• obligations that cannot be measured with sufficient reliability

Contingent liabilities are not recognised on the balance sheet unless arising from assuming assets and liabilities in a business combination. Significant contingent liabilities are disclosed unless the possibility of an outflow of resources embodying economic benefits is remote. See note 11 regarding contingent liabilities related to the Engebø deposit.

Cash flow statement

The Group reports the cash flow statement using the indirect method. That involves that the result for the period are adjusted for the effects of transactions without effect on cash and changes in assets and liabilities to show net cash flow from operations. Cash flow relating to investment activities and financing activities are shown separately.

Related party transactions

All transactions, agreements and business activities with related parties are conducted according to ordinary business terms and conditions. Parties are related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also related if they are subject to common control or common significant influence. The Group provides note disclosure for related party transactions and balances.

Earnings per share

The calculation of basic earnings per share is based on the profit (loss) attributable to ordinary shareholders using the weighted average number of shares outstanding during the year after deduction of the average number of treasury shares held over the period. The calculation of diluted earnings per share is consistent with the calculation of basic earnings per share while giving effect to all dilutive potential ordinary shares that were outstanding during the period, that is:

• The net profit for the period attributable to ordinary shares is increased by the after-tax amount of dividends and interest recognised in the period in respect of the dilutive potential ordinary shares and adjusted for any other changes in income or expense that would result from the conversion of the dilutive potential ordinary shares.
• Weighted average number of shares which includes the effect of all potential dilutive shares as if converted at the beginning of the period or from the issue date if later.

IFRS and IFRIC issued but not adopted by the Group

Standards, amendments and interpretations to existing standards that are not yet effective and have not been early adopted by the Group are listed below.

It is assessed that none of the standards, amendments and interpretations to existing standards will have material impact on the financial statements as currently presented. They may however have an impact in the future.

IAS 27 Separate Financial Statements (as revised in 2011)

As a consequence of the new IFRS 10 and IFRS 12, what remains of IAS 27 is limited to accounting for subsidiaries, jointly controlled entities, and associates in separate financial statements. The amendment becomes effective for annual periods beginning on or after 1 January 2014 (IASB effective date is 1 January 2013).

IAS 28 Investments in Associates and Joint Ventures (as revised in 2011)

As a consequence of the new IFRS 11 and IFRS 12, IAS 28 has been renamed IAS 28 Investments in Associates and Joint Ventures, and describes the application of the equity method to investments in joint ventures in addition to associates. The amendment becomes effective for annual periods beginning on or after 1 January 2014 (IASB effective date is 1 January 2013).

IFRS 10 Consolidated Financial Statements

IFRS 10 replaces the portion of IAS 27 Consolidated and Separate Financial Statements that addresses the accounting for consolidated financial statements. It also includes the issues raised in SIC-12 Consolidation — Special Purpose Entities. This standard becomes effective for annual periods beginning on or after 1 January 2014. (IASB effective date is 1 January 2013). In October 2012, IFRS 10 was amended to provide a consolidation exception for investment entities, however this does not effect the Group.

IFRS 12 Disclosure of Involvement with Other Entities

IFRS 12 includes all of the disclosures that were previously in IAS 27 related to consolidated financial statements, as well as all of the disclosures that were previously included in IAS 31 and IAS 28. These disclosures relate to an entity's interests in subsidiaries, joint arrangements, associates and structured entities. A number of new disclosures are also required. This standard becomes effective for annual periods beginning on or after 1 January 2014 (IASB effective date is 1 January 2013).

NOTE 3 - SEGMENTS

The Group shows segments on the basis of products or products under development. The two reportable segments are:

• Titanium feedstock which can be produced by Nordic Rutile from the mineral deposit at Engebøfjellet; the Ministry of Local Government and Modernisation considers the industrial area plan for the project and the Ministry of Climate and Environment considers the application for waste disposal.
• Quartz which can be produced from the quartz deposit in Kvinnherad. A scoping study outlines the potential for a profitable industrial quartz project.

As a result of the divestment of Gudvangen Stein in June 2013 anorthosite is no longer a reportable segment in the Group. Further and following from the reduced shareholding and loss of control in Keliber, the investment in Keliber is classified as an investment in an associate and lithium is no longer a reportable segment in the Group.

The quartz segment was a new reportable segment in the 2012 report, and was recognised as a reportable segment as a result of the positive scoping study and plans for increased exploration activities. The segment reporting and comparable numbers from last year have been updated to reflect the Group's new segment structure.

The reconciling column "Adjustments and eliminations" includes the Group's administration costs and other unallocated corporate business development costs as well as elimination entries related to preparing consolidated financial statements. The Group uses the segments' profit/(loss) before tax from continuing operations as the basis for the segment results including some allocations of corporate expenses, but excluding purchase price allocations related to business combinations. All the numbers in the table on the next page are in NOK thousands and present the period 1 January–31 December.

2013:

(Amounts in NOK thousands)	Quartz	Titanium	Adjustments and eliminations	Consolidated
Revenues	-	-	-	-
Segment result before tax	(364)	(6 809)	(20 917)	(28 090)
Impairment and share of loss from associate			(9 495)	(9 495)
Financial income	-	-	114	114
Financial costs	-	-	(11)	(11)

2012:

(Amounts in NOK thousands)	Quartz	Titanium	Adjustments and eliminations	Consolidated
Revenues	-	-	-	-
Segment result before tax	(1 808)	(9 534)	(13 895)	(25 238)
Impairment and share of loss from associate	-	-	(702)	(702)
Financial income	-	-	432	432
Financial costs	-	-	(244)	(244)

The following table reconciles the results from the reporting segments to consolidated results before tax:

(Amounts in NOK thousands)	2013	2012
Profit/(loss) from segments	(7 173)	(11 343)
Not allocated consolidated costs	(11 525)	(13 381)
Not allocated investment in associate incl. impairment	(9 495)	(702)
Not allocated net finance	103	188
Profit/(loss) before tax from continuing operations	(28 090)	(25 238)

Geographical allocation of sales revenue:

No revenue is generated for the reportable segments following the divestment of Gudvangen Stein.

NOTE 4 – SALARIES

(Amounts in NOK thousands)	2013	2012
Wages and salaries	7 487	7 805
Social security costs	1 334	1 362
Pension costs defined contribution plan	868	1 212
Other personnel costs	-	3
Share-based payment	37	1 462
Total	9 725	11 845
Average number of full time employees	5	7

See note 26 for further information about remuneration for senior managers and guidelines for remuneration.

NOTE 5 – SHARE-BASED COMPENSATION

The annual shareholders meeting of Nordic Mining in June 2012 decided to implement an incentive program for senior management and qualified resource persons. The board was given authority to allocate options that in full gives the right to sign up to 6 million new shares in Nordic Mining. In June 2013 and June 2012, the Board decided to grant options of 300 000 and 4 550 000 shares, respectively, to employees and associated resource persons at an exercise price of NOK 1.05. The share price on the allocation date in 2013 was NOK 0.65 and NOK 1.03 for the 2012 allocation. The options had no vesting requirements and may be exercised until the annual general meeting in 2014. The annual general meeting is scheduled 27 May 2014.

	2013		2012
	Number of	Weighted	Number of	Weighted
	options	average exercise	options	average exercise
		price		price
Outstanding 1 January	4 550 000	1.05	3 500 000	1.60
Granted during the year	300 000	1.05	4 550 000	1.05
Cancelled during the year	-	-	-	-
Exercised during the year	-	-	-	-
Expired during the year	-	-	(3 500 000)	1.60
Outstanding 31 December	4 850 000	1.05	4 550 000	1.05
Exercisable 31 December	4 850 000	1.05	4 550 000	1.05

Average fair value of options granted in 2013 was NOK 0.12 per share (NOK 0.40 per share granted in 2012). Weighted average assumptions used to calculate the real price of the granted options, using the Black Scholes model, were:

Issued in:	2013	2012
Volatility	68 %	71 %
Expected life (in years)	1.00	2.00
Risk free interest rate	1.40 %	1.40 %
Share price (NOK)	0.65	1.03
Exercise price (NOK)	1.05	1.05

NOTE 6 – OTHER OPERATING COSTS

(Amounts in NOK thousands)	2013	2012
Office costs and business service fee	1 376	2 240
Project costs – Engebøfjellet	2 275	3 137
Other business development	5 264	2 106
Exploration costs	64	1 439
Other consulting fees	483	1 311
Other costs	3 247	3 654
Grant to development expenses	(3 710)	-
Total	8 998	13 886

Auditor fees:

(Amounts in NOK thousands)	2013	2012
Statutory audit	472	628
Other attestation services	45	57
Tax services	15	-
Other financial audit	-	43
Total	532	728

The amounts are excluding VAT.

NOTE 7 – FINANCIAL INCOME AND FINANCIAL COSTS

(Amounts in NOK thousands)	2013	2012
Interest income on bank deposits	-	279
Foreign exchange gains	8	153
Other interest income	107	-
Finance income	114	432
Other finance costs	4	13
Foreign exchange losses	7	231
Finance costs	11	244

NOTE 8 - TAXES

The Group has incurred substantial losses to be carried forward, and the tax values are disclosed in the table below. At this stage, the Group cannot substantiate that there will be sufficient future income to be able to realise the Group's unused tax losses, and thus the Group has not recognised any deferred tax asset as at 31 December 2013. There are no limits in years for tax loss carryforward in Norway.

Amounts in thousands	2013	2012
Taxes payable	-	-
Deferred tax	-	(32)
Income tax expense/(income)	-	(32)

Tax effects of temporary differences at 31 December:

(Amounts in NOK thousands)	2013	2012
Intangible assets	-	(371)
Mineral properties/PP&E	(356)	(2 700)
Inventory	-	(298)
Receivables and prepayments	-	(2)
Financial lease liability	-	1 640
Other temporary differences	14	64
Tax loss carryforwards	56 504	56 359
Total deferred taxes	56 162	54 692
Deferred tax asset	-	-
Deferred tax liability	-	-

The Group transferred assets to a subsidiary with tax impact in 2011. The tax expense of the transaction was settled against tax loss carryforward in Nordic Mining ASA.

The Group recorded NOK 4.7 million in directly attributable transaction costs of the 2013 share issues directly against equity (in 2012 NOK 2.6 million).

The following table shows the reconciliation of expected tax using the nominal tax rate to the actual tax expense/(income):

(Amounts in NOK thousands)	2013	2012
Loss before tax	(28 090)	(25 238)
Nominal tax rate	28 %	28 %
Expected tax loss	(7 865)	(8 831)
Non-deductible costs	13	661
Non-taxable income	(56)	(286)
Effect of non-deductible expenses from associates	2 659	197
Non-recognised tax assets	5 250	8 227
Tax expense/(income)	-	(32)

NOTE 9 – EARNINGS PER SHARE

(Amounts in NOK thousands and number of shares in thousands)	2013	2012
Earnings
Loss attributable to ordinary shareholders from continuing operations	(28 090)	(25 206)
Loss attributable to ordinary shareholders from discontinued operations	(4 298)	(11 334)
Total	(32 388)	(35 404)
Number of shares
Weighted average number of ordinary shares outstanding	202 168	181 973
Earnings per share attributable to ordinary shareholders (amounts in NOK)
Basic and diluted earnings per share for continuing operations	(0.14)	(0.14)
Basic and diluted earnings per share for discontinued operations	(0.02)	(0.06)
Basic and diluted earnings per share	(0.16)	(0.19)

The effect of 4.58 million potentially diluted shares is not included in the calculation of diluted results per share for 2013 since they were anti-dilutive (4.55 million shares in 2012).

NOTE 10 – DISCONTINUED OPERATIONS

2013:

In June 2013, Nordic Mining entered into an agreement to sell all the shares in Gudvangen Stein for NOK 1.00. The sale was completed on 17 June 2013. As part of the transaction Nordic Mining was released from corporate guarantees amounting to NOK 5.7 million.

2012:

In September 2012, Nordic Mining and the other shareholders in Keliber entered into an agreement with new investors related to a private placement in Keliber with cash proceeds of €4 million. The agreement was conditioned, and the transaction was completed in October 2012.

Following from the transaction, Nordic Mining's shareholding in Keliber was reduced to 38%. As Nordic Mining no longer has a controlling interest in Keliber, the shareholding was classified as shares in an associated company and initially recognised at an estimated fair value of NOK 24.6 million on the balance sheet.

In the table below the reclassification from the income statement to loss from discontinued operations is specified:

	01.01-31.12		01.01-31.12
	2013		2012
(Amonts in NOK thousands)	Gudvangen	Gudvangen	Keliber	Total
Revenue	10 807	24 580	-	24 580
Other income	-	262	14	276
Cost of sales	(3 220)	(5 733)	-	(5 733)
Payroll and related costs	(2 807)	(4 579)	(1 347)	(5 926)
DD&A	(854)	(2 731)	(79)	(2 810)
Other operating expenses	(5 596)	(13 135)	(1 387)	(14 522)
Operating loss	(1 670)	(1 336)	(2 799)	(4 135)
Other (costs)/income	(441)	(1 027)	(278)	(1 305)
Loss from discontinued operations before
re-measurement to fair value	(2 111)	(2 363)	(3 077)	(5 440)
Impairment	-	(4 000)	(420)	(4 420)
Loss on disposal	(2 187)	-	(1 474)	(1 474)
Total loss for discontinued	(4 298)	(6 363)	(4 971)	(11 334)

NOTE 11 - INTANGIBLE ASSETS

(Amounts in NOK thousands)	Goodwill	Concessions
Cost
1 January 2012	7 206	7 110
Acquisition through business combinations	-	2 776
Disposal of subsidiary	(6 869)	(3 652)
Adjustment of contingent liability	(70)	-
Effect of movements in exchange rates	(267)	(99)
31 December 2012	-	6 136
1 January 2013	-	6 136
Additions		315
31 December 2013	-	6 451

Depreciation and impairment losses

1 January 2012	-	-
Impairment loss	420	-
Disposal of subsidiary	(424)	-
Effect of movement in exchange rates	4	-
31 December 2012	-	-
1 January 2013	-	-
Amortisation and impairment loss	-	-
31 December 2013	-	-

Carrying amounts

1 January 2012	7 206	7 110
31 December 2012	-	6 136
31 December 2013	-	6 451

Mining licences

The mining licences are for the Engebø and Øksfjord mineral deposits which will be depreciated according to the unit of production method when production starts. The depreciation rate will be set according to the portion of the total remaining reserves that has been produced.

In accordance with an agreement with the seller of the Engebø mineral deposit, Nordic Mining shall pay a conditional compensation to the seller of NOK 40 million if or when there is commercial production from the Engebø deposit. As of 31 December 2013, no accrual is recorded in the statement of financial position.

The proposal for industrial area plan and the application for waste disposal permit are considered by the Ministry of Local Government and Modernisation and the Ministry of Climate and Environment, respectively. If permits are not granted, it is a risk that the capitalised amounts related to Engebø will be impaired entirely. Please see note 26 for further information regarding ongoing activity in connection with the permitting process.

NOTE 12 – MINERALS, PROPERTY, PLANT AND EQUIPMENT

	Mining	Land and	Machinery and
(Amounts in NOK thousands)	properties	buildings	other equipment	Total
Cost
1 January 2012	64 964	3 478	26 983	95 425
Acquisition through business combinations	-	-	-	-
Effect of movements in exchange rates	(1 584)	(30)	(24)	(1 638)
Other additions	-	4	663	667
Disposals	(41 279)	(783)	(625)	(42 687)
31 December 2012	22 101	2 669	26 997	51 767
Acquisition through business combinations	-	-	-	-
Effect of movements in exchange rates	-	-	-	-
Other additions	-	-	296	296
Disposal of subsidiary	(22 101)	(2 669)	(27 293)	(52 063)
31 December 2013	-	-	-	-
Depreciation and impairment losses
1 January 2012	11 014	385	19 122	30 521
Depreciation	632	78	2 113	2 823
Impairment loss	4 000	-	-	4 000
Effects of movements in exchange rates	-	-	(12)	(12)
Disposals	-	-	(377)	(377)
31 December 2012	15 646	463	20 846	36 955
				-
Depreciation	77	22	693	792
Impairment loss	-	-	-	-
Effects of movements in exchange rates Disposal of subsidiary	- (15 723)	- (485)	- (21 539)	- (37 747)
31 December 2013	-	-	-	-
Carrying amounts
1 January 2012	53 950	3 093	7 861	64 904
31 December 2012	6 455	2 206	6 151	14 812
31 December 2013	-	-	-	-
Depreciation method/- time:	The unit of	Linear	Linear
	production	deprecation	deprecation
	method	10–50 years	5–36 years

The Group accounts include an impairment charge of NOK 4 million in 2012 regarding certain mining properties in Gudvangen Stein, which was sold in 2013. See note 10 for additional information.

NOTE 13 – INVESTMENT IN ASSOCIATES

The Group holds an investment of 38% (a combination of A and B shares with unequal rights) in Keliber Oy in Finland, which is accounted for as an associate. See note 10 Discontinued operations for a description of the transaction that led to the Group's reduced shareholding in the former subsidiary. The table below provides a summary of financial information of the associate as presented in its separate financial statements.

(Amounts in NOK thousands)	2013	2012
Current assets	7 457	19 212
Non-current assets	58 959	64 366
Current liabilities	(2 281)	(2 698)
Non-current liabilities	(15 816)	(16 148)
Equity	48 319	64 732
Carrying amount of investment in associate:	16 951	23 450

The Group recognised its share of loss of the associate of NOK 3.0 million in 2013 and NOK 0.7 million in 2012. Additionally, the Group recognised an impairment loss of NOK 6.5 million in 2013. The Group estimated the recoverable amount by estimated value in use. The discount rate used for the value in use calculation was approximately 24%. Additional assumptions for the value in use in calculations are; production start-up in 2016, inflation rate of 2.5%, and a lithium carbonate price of USD 8,500 per tonne for battery-grade quality.

NOTE 14 – INVENTORIES

(Amounts in NOK thousands)	2013	2012
Products	-	2 409
Materials	-	397
Total	-	2 806

The inventory in of finished products in 2012 consisted of finished minerals in Gudvangen Stein which was divested in 2013. There was no obsolescence. The inventory was part of the collateral for the Group's loans in 2012; ref. note 18.

NOTE 15 – TRADE AND OTHER RECEIVABLES

(Amounts in NOK thousands)	2013	2012
Accounts receivable	40	2 431
Other receivables	640	239
Prepayments	438	1 709
Accounts receivable VAT	-	1 052
Totalt	1 119	5 431

As per 31 December 2013, NOK 25 000 of the accounts receivables are overdue (NOK 785 000 in 2012).

NOTE 16 – CASH AND CASH EQUIVALENTS

(Amounts in NOK thousands)	2013	2012
Bank deposits	15 495	6 164
Total cash and cash equivalents	15 495	6 164
Included in cash and cash equivalents at 31 December – Employee witholding tax	313	361
Cash and cash equivalents in foreign currency	-	-

NOTE 17 – SHARE CAPITAL

Number of shares outstanding	Ordinary Shares
2012:
Opening balance	145 470 091
Share issuance	40 000 000
31 December 2012	185 470 091
2013:
Opening balance	185 470 091
Share issuance	95 034 714
31 December 2013	280 504 805

All shares have equal rights. The nominal value is NOK 0.10 per share.

Share issues in 2013

In February 2013, Nordic Mining executed a private placement of 8,966,017 shares directed towards existing shareholders and Norwegian investors. A subsequent offering of 6,068,697 shares was completed in April 2013. In August 2013, Nordic Mining executed a rights issue of 80,000,000 shares with preferential right for shareholders as per the end of 5 August 2013 (as registered in the VPS as of 8 August 2013). The rights issue was substantially oversubscribed.

The total net proceeds from these shares issues is disclosed in the Cash flow statement.

Potential new shares

On 12 June 2012, the Company's annual general meeting approved an incentive program for senior management and qualified resource personnel. The Board was given authority to grant options that in total give the rights to issue up to 6 million new shares in Nordic Mining. A total of 4,850,000 new options were granted in 2012 and 2013, as described in note 5 Share-based remuneration. The authorisation from the annual general meeting was granted for two years, until the 2014 general meeting.

NOTE 18 - LOANS

2013:

The Group does not have any loans as at 31 December 2013.

Loans as per 31 December 2012 amounting to NOK 6.4 million, of which NOK 1.0 million classified as current was held by Gudvangen Stein, and the Group has been released from the loan and collateral and corporate guarantees through the divestment of Gudvangen Stein.

NOTE 19 – FINANCIAL LEASE OBLIGATIONS

2013:

The Group does not have any financial lease obligations as at 31 December 2013.

Financial lease obligations as per 31 December 2012 was held by Gudvangen Stein , amounting to NOK 5.7 million, of which NOK 2.3 million was classified as current. The Group has been released from the obligations through the sale of Gudvangen Stein.

NOTE 20 – OTHER CURRENT LIABILITIES

(Amounts in NOK thousands)	2013	2012
Tax withholding and social security accrual	727	948
Employee salary and holiday pay accrual	728	1 317
VAT payable	262	-
Accrued expenses	348	1 232
Total	2 065	3 497

NOTE 21 - FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Management of financial risk

Nordic Mining is exposed to certain types of financial risk related to the Group's financial instruments, primarily market risk related to floating interest rate risk on cash and cash equivalents and liquidity risk.

The management of Nordic Mining manages the Group's financial risk. Risk management is primarily done by identifying and evaluating potential risk areas. Management focus is primarily on management of the liquidity risk to secure continuing operation and financing of the Group's capital intensive projects. The Group has until now not found it necessary to use derivatives or other financial instruments to manage financial risks.

Liquidity risk

The liquidity risk is the risk that the Group will not be able to pay financial obligations on their due date. The Group has to a large extent used equity financing in order to meet liquidity requirements related to financial obligations, covering of operational losses and for acquisition of companies.

All of the Group's financial liabilities as at 31 December 2013, NOK 2.6 million, matures within 6 months from the balance sheet date.

The Group has sufficient cash to be able to settle liabilities as at 31 December 2013 and expects also to have sufficient cash for the estimated operating losses in 2014. Based on current forecast the Group's cash balance will last till the first quarter of 2015. The Board therefore emphasises that strategies for further financing will be important going forward. Nordic Mining will evaluate alternatives to ensure adequate liquidity for its prioritised projects and to provide for future financial strength and flexibility. Consequently, the Group will need to either raise more equity or to issue debt instruments depending on the development of ongoing projects.

Market risk

Market risk consists of the risk that real value or future cash flow related to financial instruments will vary as a consequence of market prices. Market risk includes, but is not limited to, currency risk, interest rate risk and price risk from sales. Currently, the Group has no exposure to price risk from sale of goods, and no financial instruments have been entered into related to future expected exposures. To a limited extent, the Group has market risk from financial instruments such as cash and cash equivalents and trade payables.

(i) Variable interest rate risk

The Group's cash and cash equivalents are exposed to changes in the market interest rate on bank deposits. The Group's exposure on the result is approximately +/-NOK 150 000 per percentage-point change in the variable market interest rate.

(ii) Currency exchange risk

The Group's continuing operations are primarily in NOK, and has only limited transactions in foreign currency.

Credit risk

Credit risk is the risk of financial losses if a customer or counterpart of a financial instrument is unable to meet contractual obligations.

The Group's continuing business is assessed to have only very limited credit risk as at 31 December 2013. Cash and cash equivalents and receivables on government grants represent 99.5% of total financial assets. There has been no allocation for bad debts in 2013. There has been no loss recognised on trade receivables in 2013 or 2012.

Only to a limited degree routines for evaluation of credit risk have been introduced, however discretionary evaluations are done on a case-bycase basis. Management will on an ongoing basis evaluate the necessity of implementing stricter credit evaluations. Maximal exposure to credit risk is related to receivables which on the date of the accounts were NOK 0.7 million in 2013 and NOK 2.5 million in 2012.

Categories and fair value of financial instruments

The carrying amounts on the balance sheet of cash and cash equivalents, receivables, payables to suppliers, interest bearing bank loans and other short term financial items are close to fair value due to the short time period till maturity. The Group's interest carrying debts per 31 December 2012 had variable interest rate, including a credit line with variable interest rate.

	2013		2012
(Amounts in NOK thousands)	Carrying amount	Fair value	Carrying amount	Fair value
Loans and receivables:
Trade and other receivables	681	681	2 301	2 301
Cash and cash equivalents	15 495	15 495	6 164	6 164
Total financial assets	16 176	16 176	8 465	8 465
Financial liabilities measured at amortised cost:
Interest bearing bank loans	-	-	7 417	7 417
Accounts payable	1 568	1 568	5 168	5 168
Other current financial liabilities	1 455	1 455	2 974	2 974
Total financial liabilities	3 023	3 023	15 559	15 559

The fair value measurement of assets and liabilities above, except for bank loans, approximates the carrying amounts largely due to short term maturities. Change in credit risk may affect the values. Fair value of loans is based on discounted cash flows using observable inputs.

Currency exchange rate sensitivity

There is no substantial currency exchange risk related to financial instruments as of 31.12.2013.

Capital management

The Group has used equity financing to a large degree to finance research, operations, purchase of licenses and acquisitions. The Group has previously also used long-term interest bearing loan and financial lease obligations. The goal of the Group's capital management is to secure liquidity for operations and for development of the Group's projects. The Group's ratio of net debt (debt less cash) divided by total capital (net debt and equity) as of 31 December 2013 is -48% (as of 31 December 2012 it was 28%).

NOTE 22 – INVESTMENT IN SUBSIDIARIES

(Amounts in NOK thousands)	Location	Year incorp.	Share capital	Owner ship	Equity 31.12.13	Net loss 2013	Carrying amount 31.12.13
Nordic Rutile AS	Oslo, Norway	2006	15 098	100 %	33 468	(7 214)	47 266
Nordic Ocean Resources AS	Oslo, Norway	2011	115	85 %	(278)	(589)	1 215
Nordic Quartz AS	Oslo, Norway	2011	120	100 %	(174)	(623)	2 237

NOTE 23 – SHAREHOLDERS

The following 20 shareholders held most shares in the Company as of 31 December 2013:

	Number of	%
Shareholders	shares	ownership
NORDNET BANK AB	22 169 713	7.9 %
SKAGEN VEKST	17 428 114	6.2 %
MP PENSJON PK	14 319 952	5.1 %
NORDEA BANK FINLAND	9 241 092	3.3 %
FINNISH INDUSTRY INVESTMENT LTD.	8 358 949	3.0 %
DYBVAD CONSULTING AS	7 906 148	2.8 %
VPF NORDEA SMB	6 448 929	2.3 %
VERDIPAPIRFONDET DNB	6 250 000	2.2 %
MAGIL AS	4 700 000	1.7 %
DANSKE BANK A/S	4 154 591	1.5 %
NORDNET PENSJONSFORS	4 009 158	1.4 %
SNATI AS	4 001 219	1.4 %
VICAMA AS	3 800 000	1.4 %
OVE KLUNGLAND HOLDING	3 439 281	1.2 %
CITIBANK, N.A.	3 277 896	1.2 %
OLE KRISTIAN STOKKEN	2 615 000	0.9 %
LITHINON AS	2 500 000	0.9 %
BK BYGG AS	2 487 664	0.9 %
AUDSTEIN DYBVAD	2 220 846	0.8 %
FEMCON AS	2 089 280	0.7 %
Total 20 largest shareholders	131 417 832	55.6%
Others	149 086 973	44.4%
Total	280 504 805	100 %

NOTE 24 – RELATED PARTIES AND COMPENSATION OF MANAGEMENT

Transactions with related parties

Transactions with related parties adhere to the "arm's length principle". Nordic Mining has an agreement with Dag Dvergsten AS for office rental and services. The Company's board member Tore Viana-Rønningen is employed in Dag Dvergsten AS. The agreement can be cancelled by both parties on a six months' notice.

In 2013, the Company has expensed NOK 1.2 million related to the agreement with Dag Dvergsten AS (NOK 2.2 million in 2012).

Compensation of board members and key management in 2013:

	Salary	Board member	Other	Pension	Share-based
(Amounts in NOK thousands)		fees	compensation	cost	payment	Total
Ivar Sund Fossum, CEO	1 875	-	241	240	-	2 356
Lars K. Grøndahl, CFO	1 419	-	160	246	-	1 825
Mona Schanche, Exploration manager	907	-	52	119	-	1 078
Ottar Nakken, previous VP Commercial1	1 293	-	89	240	-	1 622
Paul I. Norkyn, previous VP Mining2	917	-	105	152	-	1 173
Tarmo Tuominen, Board chairman	-	300	-	-	-	300
Kjell Roland, Board member	-	96	-	-	-	96
Tore Viana-Rønningen, Board member	-	175	-	-	-	175
Mari Thjømøe, Board member	-	-	-	-	-	-
Hilde Myrberg, Board member	-	-	-	-	-	-
Camilla Fiskevoll, former Board member	-	175	-	-	-	175
Thorild Widvey, former Board member	-	96	-	-	-	96
Anne Dæhlie, former Board member	-	79	-	-	-	79
Egil M. Ullebø, former Board member	-	79	-	-	-	79
Total	6 411	1 000	647	997	0	9 054

1) Ottar Nakken terminated his employment with Nordic Mining from 30 June 2013.

2) Paul I. Norkyn terminated his employment with Nordic Mining from 30 September 2013.

Compensation of board members and key management in 2012:

		Board member	Other	Pension	Share-based
(Amounts in NOK thousands)	Salary	fees	compensation	cost	payment	Total
Ivar Sund Fossum, CEO	1 852	-	239	200	401	2 691
Lars K. Grøndahl, CFO	1 403	-	162	209	280	2 055
Mona Schanche, Exploration manager	846	-	26	99	280	1 251
Ottar Nakken, previous VP Commercial	1 273	-	165	208	220	1 866
Paul I. Norkyn, previous VP Mining	1 272	-	139	190	220	1 821
Tarmo Tuominen, Board chairman	-	191	-	-	-	191
Dag Dvergsten, former Board chairman	-	210	-	-	-	210
Kjell Roland, Board member	-	-	-	-	-	-
Tore Viana-Rønningen, Board member	-	23	-	-	-	23
Camilla Fiskevoll, former Board member	-	196	-	-	-	196
Thorild Widvey, former Board member	-	-	-	-	-	-
Anne Dæhlie, former Board member	-	175	-	-	-	175
Egil M. Ullebø, former Board member	-	175	3	-	-	178
Total	6 645	971	734	905	1 402	10 658

Guidelines for management remuneration

The main components of the guidelines for senior management salaries are as follows:

• The compensation package should reflect the responsibility and the tasks that the individual persons in senior management, and that the employee contributes towards the long-term creation of value in Nordic Mining.
• The Company will offer competitive conditions in order to attract relevant expertise for the development of the Company.
• The compensation package consists of fixed salary plus participation in an option program that has previously been approved by the annual meeting.
• Senior management participates in pension and insurance plans.
• Neither the Company's CEO nor other members of the senior management team has an agreement of a severance package in their employment contracts.

These guidelines have been used to hire senior management in Nordic Mining ASA and to establish salary levels.

Payables to management:

(Amounts in NOK thousands)	2013	2012
Ivar Sund Fossum, CEO	28	53
Lars K. Grøndahl, CFO	4	88
Ottar Nakken, previous VP Commercial	-	13
Paul I. Norkyn, previous VP Mining	-	10
Tarmo Tuominen, Board chairman	-	5
Total	31	169

Shares owned/controlled by members of the Board and senior management and those related to them as of 31 December 2013:

Name	Position	Number of shares	% ownership
Ivar Sund Fossum	CEO	1 525 877	0.54 %
Lars K. Grøndahl1	CFO	4 700 000	1.68 %
Mona Schanche	Exploration manager	132 306	0.05 %
Tarmo Tuominen	Board chairman	47 677	0.02 %
Kjell Roland	Board member	250 000	0.09 %
Tore Viana-Rønningen	Board member	140 000	0.05 %
Mari Thjømøe2	Board member	100 000	0.04 %
Total		6 895 860	2.46 %

1) The shares are owned through the company Magil AS.

2) The shares are owned through the company ThjømøeKranen AS.

Options held by board members and key management as of 31 December 2013:

Name	Position	Total granted and	All granted in
		outstanding	2012
Ivar Sund Fossum	CEO	1 000 000	1 000 000
Lars K. Grøndahl	CFO	700 000	700 000
Mona Schanche	Exploration manager	700 000	700 000
Total		3 500 000	3 500 000

NOTE 25 – PENSIONS

The Group has one benefit plan for Norwegian employees with a total of 3 active members. The Group disposed of Gudvangen Stein in 2013 and thus exited the defined benefit plan with the majority of active members employed by the Group at 31.12.2012.

Pension cost:
(Amounts in NOK thousands)	2013	2012
Pension cost - employee benefit	1 123	1 598
Pension cost - interest expense	(33)	(103)
Total pension related costs	1 090	1 495
Re-measurement gains/(losses) recorded to Other Comprehensive Income	(738)	1 035
Movements in pension obligations during the year were as follows:
(Amounts in NOK thousands)	2013	2012
Pension obligations January 1	9 061	8 989
Current value of pension benefits for the year	1 156	1 288
Interest costs	292	299
Curtailment/settlement	(2 124)	-
Sale of subsidiary	(1 384)	-
Payments	(494)	(338)
Re-measurement loss/(gain)	581	(1 177)
Pension obligations as of 31 December	7 088	9 061
Movements in pension funds during the year were as follows:
(Amounts in NOK thousands)	2013	2012
Pension funds 1 January	8 815	8 008
Interest income	305	284
Curtailment/settlement	(2 035)	-
Sale of subsidiary	(1 226)	-
Contributions	1 572	1 291
Payments	(232)	(338)
Other	-	(161)
Re-measurement (loss)/gain	(157)	(269)
Pension funds as of 31 December	7 042	8 815
The pension asset/(liability) is classified on the balance sheet as follows:
(Amounts in NOK thousands)	2013	2012
Pension funds	7 042	8 815
Pension obligations	(7 088)	(9 061)
Total	(46)	(246)
Social security accrual	(6)	(18)
Net pension asset	(52)	(264)
Pension asset/(liability) is shown in the balance sheet as:
Other long-term asset	-	244
Other liabilities	(52)	(508)
Assumptions:
	2013	2012

Discounted interest rate	3.70 %	3.90 %
Annual projected increase in salary	3.50 %	3.50 %
Annual projected G- regulation	3.25 %	3.25 %
Annual projected regulation of pension under payment	0.50 %	0.20 %

NOTE 26 – EVENTS AFTER THE BALANCE SHEET DATE

New Exploration Rights granted on the Øksfjord Peninsula

Nordic Mining has been granted two new Exploration Rights on the Øksfjord Peninsula in Loppa municipality in Finnmark county in Norway. The new exploration areas are located east of the Company's current exploration prospect (i.a. copper, nickel, cobalt, PGE) in Reinfjord. The total area of the new Exploration Rights is 20 km2.

Funding granted for drilling at Reinfjord

The Group has been granted NOK 2 million from NordMin to a research program that is coordinated by the Norwegian University of Science and Technology ("NTNU"), and where Nordic Mining is a partner. The aim of the program is to explore and define the genesis of the deposits in the Reinfjord Intrusion that was discovered by Nordic Mining by drilling in 2012. NordMin is funded by the Nordic Council of Ministers and projects are meant to have a strong industry component.

Currents measurements for the Førdefjord in line with previous results

Data from measurements of water circulation in the Førdefjord for the second measuring period was collected by DNV GL in February 2014. The results show moderate currents in the planned disposal area, in line with previous measurements. The measurement program is an important part of the supplementary information requested by the Ministry of Climate and Environment in connection with the industrial area plan and the discharge permit for the Engebø rutile project.

Keliber has been granted a new lithium deposit at Rapasaari

The Finnish Ministry of Employment and the Economy has accepted Keliber's (owned 38% by the Group) offer to acquire the Rapasaari lithium deposit. The agreement documents are in preparation.

Patent filed for new alumina technology

Nordic Mining, together with Institute for Energy Technology ("IFE") has filed a patent application for a new technology for extraction of alumina from alumina/calcium-rich minerals. The new technology is an innovative solution for production of alumina from alternative mineral sources such as anorthosite, with the integrated use and storage of CO2.

Subsidiaries pre-registered for VAT

In April 2014, Nordic Rutile AS and Nordic Quartz AS were pre-registered for VAT. Accounting effects following from the pre-registrations will be implemented in the interim financial statements for the first quarter 2014. Going forward, the pre-registrations will have a positive impact on the Group's liquidity.

Corporate accounts for Nordic Mining ASA

INCOME STATEMENTS

			2012
(Amounts in NOK thousands)	Note	2013	Restated*
Other income		3 723	1 020
Payroll and related costs	4,5	(9 725)	(10 321)
Other operating expenses	6	(5 917)	(9 752)
Depreciation	10	-	(13)
Impairment shares in subsidiaries and associates	14	(10 765)	(10 579)
Operating loss		(22 685)	(29 645)
Financial income	7	1 809	2 417
Financial costs	7	(11)	(596)
Profit/(loss) before tax		(20 887)	(27 824)
Income tax	8	-	-
Net profit/(loss)		(20 887)	(27 824)
Allocation of the loss
Allocated to retained losses		(20 887)	(27 824)
Total allocation of the loss		(20 887)	(27 824)

BALANCE SHEETS

			2012
(Amounts in NOK thousands)	Note	2013	Restated*
ASSETS
Non-current assets
Licences	9	1 326	1 326
Investment in subsidiaries	3,14	50 719	29 110
Investment in associate	14	16 951	24 568
Total non-current assets		68 996	55 005
Financial assets
Long term receivables Group companies	10	14 752	31 385
Pension assets	18	-	245
Total financial assets		14 752	31 630
Total non-current assets		83 748	86 634
Current assets
Other receivables and prepayments	10	6 607	5 558
Cash and cash equivalents	11	14 666	6 060
Total current assets		21 273	11 618
Total assets		105 021	98 252

			2012
(Amounts in NOK thousands)	Note	2013	Restated*
SHAREHOLDERS' EQUITY & LIABILITIES
Shareholders' equity
Share capital	12	28 050	18 547
Share premium	12	227 146	206 821
Other paid-in capital	12	8 893	8 856
Retained losses	12	(162 041)	(140 416)
Total equity	12	102 048	93 808
Non-current liabilities
Pension liabilities	18	52	-
Total non-current liabilities		52	-
Current liabilities
Trade payables	17	1 205	2 449
Provision and other current liabilities	13	1 717	1 994
Total current liabilities		2 921	4 444
Total liabilities		2 974	4 444
Total shareholders' equity and liabilities		105 021	98 252

* Restated for the implementation of new accounting principles for pensions (see note 2).

Oslo, 24 April 2014 The Board of Directors of Nordic Mining ASA

Mari Thjømøe Hilde Myrberg

Ivar S. Fossum CEO

Tarmo Tuominen Chairman

Kjell Roland Tore Viana-

Rønningen

CASH FLOW STATEMENTS

			2012
(Amounts in NOK thousands)	Note	2013	Restated*
CASH FLOW FROM OPERATING ACTIVITIES
Loss before income tax		(20 887)	(27 824)
Depreciation	9	-	13
Write down of receivables and investments in subsidiaries	14	3 148	10 579
Write down of investments in associates	14	7 617	-
Share-based expenses	4	37	1 462
Amortisation of interest	7	5	(1 219)
Effect of changes in foreign exchange rates		-	(300)
Changes in assets and liabilities:
Other receivables and prepayments		(4 197)	(1 400)
Trade payables		(1 245)	442
Accrued expenses and other current liabilities		(720)	(377)
Net cash used in operating activites		(16 242)	(18 624)
CASH FLOW FROM INVESTING ACTIVITIES
Acquisition of mineral license		-	(1 326)
Loan to subidiaries		-	(3 550)
Repayment of loans from to subsidiaries	10	16 628	-
Investment in subsidiaries	14	(21 608)	(3 196)
Net cash used in investing activities		(4 980)	(8 072)
CASH FLOW FROM FINANCING ACTIVITIES
Share issuance net of transaction costs	12	29 828	33 406
Payment of contingent liability		-	(3 023)
Net cash from financing activities		29 828	30 383
Net change in cash and cash equivalents		8 606	3 687
Cash and cash equivalents at beginning of period	11	6 060	2 373
Cash and cash equivalents at end of period	11	14 666	6 060

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1 – GENERAL INFORMATION

Nordic Mining ASA ("the Company") and its subsidiaries (together "the Group") focus on exploration, extraction and production of high-end industrial minerals and metals. The address of Nordic Mining's office is Munkedamsveien 45, N-0250 Oslo, Norway.

The Board approved publication of the accounts on 24 April 2014.

NOTE 2 – SUMMARY OF THE MOST IMPORTANT ACCOUNTING PRINCIPLES

The most important accounting principles that have been used in developing the Company accounts are described below. These principles have been consistently applied unless otherwise stated.

Basic principles

The Company accounts have been presented in accordance with the Norwegian accounting act and generally accepted accounting principles in Norway. The related notes are an integral part of the financial statements of the Company.

The annual accounts are based on the going concern assumption. For further comments the Board of Directors' Report and note 21 of the consolidated financial statements are refered.

New accounting principles for pension accounting – restatement of comparative information

New accounting principles for pensions have been incorporated with effect from 1 January 2012, and thus the 2012 figures have been restated to reflect this. The effects on the 2012 figures are:

• Income statement; increase in expenses with NOK 61,000
• Balance sheet; Net pension assets reduced by NOK 190,000 with corresponding adjustment to equity.

The new accounting principles for pensions are described below.

Investment in subsidiaries and associated entities

Subsidiaries are companies controlled by the entity. Associated companies are investments in companies where the company has significant influence, but not control. Significant influence normally exists when the company controls between 20% and 50% of the voting rights.

Subsidiaries and associates are measured at cost in the statutory accounts. The investments are measured at acquisition cost, unless impairment has been necessary. Such assets are deemed to be impaired at fair value when a decrease in value cannot be considered to be of temporary nature and in accordance with generally accepted accounting principles. Impairments are reversed when the basis for the impairment no longer applies.

Transactions in foreign currency

Transactions in foreign currencies are initially recorded in the functional currency rate at the date of the transaction. Monetary items denominated in foreign currencies are translated at the exchange rate at the balance sheet date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.

Acquisition of mining and mineral properties and exploration and development of such properties

Exploration and evaluation assets are classified as tangible or intangible according to the nature of the assets acquired.

Some exploration and evaluation assets should be classified as intangibles, such as drilling rights and capitalised exploration costs. When technical feasibility and commercial viability of extracting a mineral resource is demonstrable, the assets should be reclassified as tangible assets. Evaluation and exploration assets that are classified as intangible assets are tested for impairment prior to reclassification.

Mining and mineral properties

Mining interests represent capitalised expenditures related to the acquisition, exploration and development of mining properties and related plant and equipment. Capitalised costs are depreciated and depleted using a unit of production method over the estimated economic life of the mine to which they relate.

Exploration and development for mineral properties

The Company employs the successful efforts method to account for exploration and development costs. All exploration costs, with the exception of acquisition costs of licenses and direct drilling costs of exploration wells are charged to expenses as incurred. Drilling costs of exploration holes are temporarily capitalised pending the evaluation of the potential existence of mineral reserves. If reserves are not found, or if discoveries are assessed not to be technically and commercially recoverable, the drilling costs of exploration holes are expensed. Costs of acquiring licenses are capitalised and assessed for impairment at each reporting date.

Receivables

The Company's receivables are mainly receivables on group gompanies. Receivables are recognised initially at cost, and subsequently measured at amortised cost using the effective interest method if the amortisation effect is material, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Company may not be able to collect all amounts due according to the original terms of receivables.

Cash and cash equivalents

Cash and cash equivalents consist of cash, bank deposits and other short term, easily convertible investments with maximum three months original maturity.

Share capital

Ordinary shares are classified as equity. Expenses that are directly linked to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Loans

All loans and borrowings are initially recognised at cost, being the fair value of the consideration received net of issue costs associated with the borrowing. After initial recognition, interest-bearing loss and borrowings are subsequently measured at amortised cost using the effective interest method; any difference between proceeds (net of transaction costs) and the redemption value is recognised on the income statement over the period of the interest bearing liabilities.

Trade payables

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, if the amortisation effect is material.

Government grants

Government grants are recognised in profit and loss on a systematic basis over the periods in which the Company recognises expenses the related cost for which the grant are intended to compensate.

Government grants related to capitalised assets is presented in the balance by deducting the grant in arriving at the carrying amount of the asset.

Share-based compensation

The Company uses share-based, equity settled warrants to compensate service providers. The fair value of the services received is recognised as an expense in the financial statements over the period the options vest. The fair value of options that are fully vested on the grant date are fully recognised in the income statement when granted. Share-based compensation to employees and others providing a similar service is measured by reference to the fair value of equity instruments issued. The Company uses the Black Scholes model to measure the fair value of options and warrants. In some circumstances, the Company has granted options to parties that are not employees and parties that do not provide similar services. In general, the services received in return for the grant of options cannot be reliably measured and the share-based payments have therefore been measured at the fair value of the granted options.

Deferred tax

Income tax expense represents the sum of the taxes currently payable and deferred tax. Taxes payable are provided based on taxable profits at the current tax rate. Deferred taxes are recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible

temporary differences can be utilised. Deferred income tax is not recognised on temporary differences arising from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit nor loss. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable income will be available to allow all or part of the asset to be recovered.

Revenue recognition

The primary revenue comes from sale of services to Group companies. Revenues are recognised in the accounting period in which the services are provided.

Pensions

The Company has a defined benefit pension plans for its employees that meet the Norwegian statutory requirement. For the defined benefit plan, the cost of providing the benefits is determined using the unit credit method, with actual valuations being carried out at the end of each annual reporting period. Re-measurement, comprising actuarial gains and losses, the effect of asset ceiling (if applicable) and the return on plan assets (excluding interest), is reflected immediately in the statement of financial position with a charge or credit recognised in equity in the period in which they occur. Past service costs are recognised in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset.

Cash flow statement

The Company reports the cash flow statement using the indirect method. That involves that the result for the period are adjusted for the effects of transactions without effect on cash and changes in assets and liabilities to show net cash flow from operations. Cash flow relating to investment activities and financing activities are shown separately.

Related parties

All transactions, agreements and business activities with related parties are processed on standard arm's length business terms. Parties are related if they have the possibility to directly or indirectly control the business or provide significant influence over the financial and operational decision of the business. The parties are also related if they are subject to "common control". The Company provides information in notes about transactions and balances with related parties.

Earnings per share

The calculations of earnings per share are based on the result assigned to ordinary shareholders using a weighted average of outstanding shares through the period after deduction for weighted number of shares in the period. The calculation of diluted earnings per share is consistent with the method for calculating basic earnings per share, considering potential diluted shares in the period:

• The net profit for the period that is assigned to ordinary shareholders is increased with an after-tax amount for dividends and interest recognised in the period related to potential diluted shares.
• Weighted average number of shares issued that include the effect of all potential diluted had been converted to ordinary shares in the beginning of the period or from the issuing date is this is later.

NOTE 3 – SIGNIFICANT TRANSACTIONS

As a part of Nordic Mining's assessment of strategic options and alternatives for the various parts of its business Gudvangen Stein was divested in June 2013. Nordic Mining was released from corporate guarantees at a total amount of NOK 5.7 million. The Company recognised a loss of NOK 3.1 million from impairment of the investment in Gudvangen Stein.

In 2012, Nordic Mining's shareholding in Keliber was reduced to 38%. As Nordic Mining no longer has a controlling interest in Keliber, the shareholding has been classified as shares in an associate. For more information, see note 10 in the consolidated financial statements.

NOTE 4 – SALARIES

See note 4 in the consolidated financial statements.

NOTE 5 – SHARE-BASED REMUNERATION

See note 5 in the consolidated financial statements.

NOTE 6 – OTHER OPERATIONAL COSTS

(Amounts in NOK thousands)	2013	2012
Office costs and business service fee	1 376	2240
Other business development	4 340	2 171
Exploration costs	64	1 439
Other costs	3 247	3 902
Grant to development expenses	(3 110)	-
Totalt	5 917	9 752
Remuneration to the auditor:
(Amounts in NOK thousands)	2013	2012
Statutory audit	380	425

Other attestation services	25	43
Tax services	15	-
Other financial audit	-	38
Total	420	506

The amounts are excluding VAT.

NOTE 7 – FINANCIAL INCOME AND FINANCIAL COSTS

(Amounts in NOK thousands)	2013	2012
Interest income on bank deposits	-	278
Intercompany interest	1 698	1 651
Other finance income	-	70
Foreign exchange gains	8	418
Other interest income	103	-
Finance income	1 809	2 417
Other finance expenses	4	369
Foreign exchange losses	7	227
Finance costs	11	596

NOTE 8 – TAXES

Income taxes for the year:
(Amounts in NOK thousands)	2013	2012
Taxes payable	-	-
Change in deferred tax	-	-
Income tax expense/(income)	-	-

Tax impact of temporary differences as of 31 December:

(Amounts in NOK thousands)	2013	2012
Property, plant and equipment	2	3
Tax loss carryforwards	51 427	49 277
Licences	(358)	(371)
Pension asset/(liabilities)	14	(68)
Net deferred tax asset	51 085	48 840
Tax rate	27 %	28 %
Recognised deferred tax in the balance sheet
Deferred tax asset	-	-
Deferred tax	-	-

The Company has incurred substantial losses to be carried forward, and the tax values are disclosed in the table below. At this stage, the Company cannot substantiate that there will be sufficient future income to be able to realise the Company's unused tax losses, and thus the Company has not recognised any deferred tax asset as at 31 December 2013. There is no limit in years for tax loss carryforward in Norway.

Reconciliation of effective tax rate:

(Amounts in NOK thousands)	2013	2012
Loss before tax	(20 887)	(27 824)
Nominal tax rate	28 %	28 %
Expected tax loss	(5 848)	(7 791)
Impairment shares in subsidiaries and associates	3 014	2 962
Non-deductible expenses	13	640
Non-taxable income	-	(94)
Non-recognised tax loss carryforwards	2 821	4 283
Tax income/(loss) for the year	-	-

Government grants/ R&D tax credits:

The Company received nil in R&D tax credits in 2013 (NOK 94,000 in 2012).

NOTE 9 – FIXED AND INTANGIBLE ASSETS

Carrying amount of concession related assets of NOK 1.3 million in 2013 and 2012 relates to successful exploration drilling in Øksfjord capitalised in accordance with the successful effort method. The assets will be amortised using the units of production method when the production commences.

NOTE 10 – OTHER RECEIVABLES AND PREPAID EXPENSES

(Amounts in NOK thousands)	2013	2012
Accounts receivable	40	-
Prepayments	438	1 367
VAT receivable	-	346
Intercompany receivables	6 128	3 845
Total	6 607	5 558

Specification of short-term intercompany receivables

(Amounts in NOK thousands)	2013	2012
Nordic Rutile AS	5 139	969
Nordic Ocean Resources AS	512	387
Nordic Quartz AS	477	665
Gudvangen Stein AS	-	1 761
Keliber Oy	-	63
Total	6 128	3 845

Long-term receivables Group companies

(Amounts in NOK thousands)	2013	2012
Nordic Rutile AS	14 746	31 133
Nordic Quartz AS	7	252
Total	14 752	31 385

NOTE 11 – CASH AND CASH EQUIVALENTS

(Amounts in NOK thousands)	2013	2012
Bank deposits	14 666	6 060
Total cash and cash equivalents	14 666	6 060
Included in cash and cash equivalents at 31 December:
Employee withholding tax	313	361
Foreign currency	-	-

NOTE 12 – SHARE CAPITAL AND CHANGES IN EQUITY

Number of shares outstanding	Ordinary Shares
2012:
Opening balance	145 470 091
Share issuance	40 000 000
31 December 2012	185 470 091
2013:
Opening balance	185 470 091
Share issuance	95 034 714
31 December 2013	280 504 805

All shares have equal rights. Nominal value is NOK 0.10 per share. For additional information see notes 17 and 26 in the consolidated financial statements.

Changes in the equity

	Share	Share	Other paid	Retained
(Amounts in NOK thousands)	capital	premium	in-capital	earnings	Total
Equity at 31 December 2011	14 547	177 415	7 033	(112 463)	86 533
Equity at 1 January 2012, restated*	14 547	177 415	7 033	(113 837)	85 159
Share-based payment	-	-	1 823	-	1 823
Share issue	4 000	32 000	-	-	36 000
Transaction costs on share issue	-	(2 594)	-	-	(2 594)
Actuarial gain/(losses) on pensions	-	-	-	1 245	1 245
Loss for the period	-	-	-	(27 823)	(27 823)
Equity at 31 December 2012	18 547	206 821	8 856	(140 415)	93 808
Share-based payment	-	-	37	-	37
Share issue	9 503	25 020	-	-	34 523
Transaction costs on share issue	-	(4 695)	-	-	(4 695)
Actuarial gain losses on pensions	-	-	-	(739)	(739)
Loss for the period	-	-	-	(20 887)	(20 887)
Equity at 31 December 2013	28 050	227 146	8 893	(162 041)	102 048

* 2012 figures has been restated due to implementation of new accounting standard for pensions. Effects from implementation on 2012 figures are: 1) Income statement: Loss for the year increased with NOK 61 000, 2) Balance sheet: Net pension assets decreased with NOK 190 000. See Accounting principles in note 2 for description of the new accounting policies for pensions.

NOTE 13 – PROVISION AND OTHER CURRENT LIABILITIES

(Amounts in NOK thousands)	2013	2012
Tax withholding and social security accrual	727	644
Employee salary and holiday pay accrual	728	767
VAT payable	262	-
Accrued expenses	-	584
Total	1 717	1 994

NOTE 14 – INVESTMENTS IN SUBSIDIARIES AND ASSOCIATE

Investments in Subsidiaries

		Year	Share	Owner	Equity	Net loss	Carrying amount
(Amounts in NOK thousands)	Location	incorp.	capital	ship	31.12.13	2013	31.12.13
Nordic Rutile AS	Oslo, Norway	2006	15 098	100 %	33 468	(7 214)	47 266
Nordic Ocean Resources AS	Oslo, Norway	2011	115	85 %	(278)	(589)	1 215
Nordic Quartz AS	Oslo, Norway	2011	120	100 %	(174)	(623)	2 237

In 2013, Gudvangen Stein AS has been sold resulting in a loss of NOK 3.1 million from the impairment of the investment. In 2012, the Company recognised an impairment loss of the shares in Gudvangen Stein of NOK 5.7 million and an impairment loss of the investment in Keliber of NOK 4.9 million.

Investments in Associate

The Company holds an investment of 38% in Keliber Oy in Finland. See note 3 and note 10 in the consolidated financial statements for a description of the transaction that led to the Company losing control in the former subsidiary. See note 13 in the consolidated financial statement for information about impairment recognised in 2013.

(Amounts in NOK thousands)	2013	2012
Initial fair value 26.10.2012	24 568	24 568
Impairment in 2013	(7 617)	-
Carrying amount	16 951	24 568

NOTE 15 – SHAREHOLDERS

An overview of the largest shareholders in the Company as per 31 December 2013 is shown in note 23 of the consolidated financial statements.

NOTE 16 – RELATED PARTIES AND SALARY TO SENIOR MANAGEMENT

See note 24 in the consolidated financial statements.

NOTE 17 – FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Management of financial risk

Nordic Mining is exposed to various types of financial risk related to the Company's financial instruments, primarily credit risk related to customer receivables and other financial claims, market risk related to floating interest rate, risk on cash and cash equivalents and interest bearing debts, currency risk and liquidity risk. The Company manages financial risk primarily by identifying and evaluating potential risk areas. The Company has at this time not found it necessary to use derivatives to several financial risks. For information about operating risks, including political risks, related to the Engebø deposit, see Board of Director's report.

Liquidity risk

The liquidity risk is the risk that the Company is not able to pay its financial obligations upon maturity. The Company has used equity financing to a large degree in order to meet liquidity demands related to financial obligations, cover operational losses and acquisition of businesses. Nordic Mining ASA does not have significant financial obligations. For a more complete description of Nordic Mining Group's liquidity risk see note 21 in the consolidated financial statements.

Market risk

Variable interest risk

The Company is exposed to cash flow risk related to receivables from subsidiaries that has a floating interest rate. Furthermore, the Company has exposure to the floating interest risk related cash or cash equivalent deposits.

Currency exchange risk

The Company has limited exposure to currency exchange risk as at 31 December 2013. Currency transactions may arise, amongst others related to its associate. The Company evaluates unpaid balances and transactions in foreign currency, but has so far not decided to secure against currency exposure.

Credit risk

The Company does not have receivables from sales and there are not many other payables (loans and payables are primarily with the companies within the Group which amounts to NOK 20.8 million). The Company therefore has a limited credit risk from external parties.

Sensitivity analysis

The Company's result and equity is exposed only to a limited degree to changes in interest rate (bank deposit and intercompany loans) and currency exchange rates.

NOTE 18 – PENSIONS

See note 25 in the consolidated financial statements.

NOTE 19 – EVENTS AFTER THE DATE OF THE ACCOUNTS

See note 26 in the consolidated financial statements.

Nordic Mining ASA Munkedamsveien 45

Vika Atrium Munkedamsveien 45 Entrance A – 5th floor N-0250 Oslo Norway Munkedamsveien 45 Entrance A – 5th floor N-0250 Oslo Norway N-0250 Oslo Norway Tel. : +47 22 94 77 90 Fax.: +47 22 94 77 91 Nordic Mining ASA Vika Atrium Munkedamsveien 45 Entrance A – 5th floor

Tel. : +47 22 94 77 90 Fax.: +47 22 94 77 91 Fax.: +47 22 94 77 91 post@nordicmining.com www.nordicmining.com N-0250 Oslo Norway

post@nordicmining.com www.nordicmining.com www.nordicmining.com Org. no. 989 796 739 Tel. : +47 22 94 77 90 Fax.: +47 22 94 77 91

Org. no. 989 796 739 post@nordicmining.com

RESPONSIBILITY STATEMENT RESPONSIBILITY STATEMENT We confirm to the best of our knowledge that the consolidated financial statements for 2013

We confirm to the best of our knowledge that the consolidated financial statements for 2013 have been prepared in accordance with IFRS as adopted by the European Union, as well as additional information requirements in accordance with the Norwegian Accounting Act, that the financial statements for the parent company for 2013 have been prepared in accordance with the Norwegian Accounting Act and generally accepted accounting practice in Norway, and that the information presented in the financial statements gives a true and fair view of the assets, liabilities, financial position and result of Nordic Mining ASA and the Nordic Mining Group for the period. We confirm to the best of our knowledge that the consolidated financial statements for 2013 have been prepared in accordance with IFRS as adopted by the European Union, as well as additional information requirements in accordance with the Norwegian Accounting Act, that the financial statements for the parent company for 2013 have been prepared in accordance with the Norwegian Accounting Act and generally accepted accounting practice in Norway, and that the information presented in the financial statements gives a true and fair view of the assets, liabilities, financial position and result of Nordic Mining ASA and the Nordic Mining Group for the period. have been prepared in accordance with IFRS as adopted by the European Union, as well as additional information requirements in accordance with the Norwegian Accounting Act, that the financial statements for the parent company for 2013 have been prepared in accordance with the Norwegian Accounting Act and generally accepted accounting practice in Norway, and that the information presented in the financial statements gives a true and fair view of the assets, liabilities, financial position and result of Nordic Mining ASA and the Nordic Mining Group for the period. We also confirm to the best of our knowledge that the Board of Directors' Report includes a true RESPONSIBILITY STATEMENT We confirm to the best of our knowledge that the consolidated financial statements for 2013 have been prepared in accordance with IFRS as adopted by the European Union, as well as additional information requirements in accordance with the Norwegian Accounting Act, that the financial statements for the parent company for 2013 have been prepared in accordance with the Norwegian Accounting Act and generally accepted accounting practice in Norway, and that the information presented in the financial statements gives a true and fair view of the assets,

We also confirm to the best of our knowledge that the Board of Directors' Report includes a true and fair review of the development, performance and financial position of Nordic Mining ASA and the Nordic Mining Group, together with a description of the principal risks and uncertainties that they face. We also confirm to the best of our knowledge that the Board of Directors' Report includes a true and fair review of the development, performance and financial position of Nordic Mining ASA and the Nordic Mining Group, together with a description of the principal risks and uncertainties that they face. and fair review of the development, performance and financial position of Nordic Mining ASA and the Nordic Mining Group, together with a description of the principal risks and uncertainties that they face. liabilities, financial position and result of Nordic Mining ASA and the Nordic Mining Group for the period. We also confirm to the best of our knowledge that the Board of Directors' Report includes a true and fair review of the development, performance and financial position of Nordic Mining ASA

Oslo, 24 April 2014

Oslo, 24 April 2014 Oslo, 24 April 2014 The Board of Directors of Nordic Mining ASA

__________________ __________________ __________________

Chairman Deputy chairman Board member Chairman Deputy chairman Board member __________________ __________________ __________________

The Board of Directors of Nordic Mining ASA

__________________ __________________ __________________ __________________ __________________ __________________ Tarmo Tuominen Kjell Roland Hilde Myrberg Tarmo Tuominen Kjell Roland Hilde Myrberg Chairman Deputy chairman Board member

__________________ __________________ __________________ Tarmo Tuominen Kjell Roland Hilde Myrberg Chairman Deputy chairman Board member

__________________ __________________ __________________ __________________ __________________ __________________ Mari Thjømøe Tore Viana-Rønningen Ivar S. Fossum Board member Board member CEO

Mari Thjømøe Tore Viana-Rønningen Ivar S. Fossum Board member Board member CEO Mari Thjømøe Tore Viana-Rønningen Ivar S. Fossum Board member Board member CEO __________________ __________________ __________________

Mari Thjømøe Tore Viana-Rønningen Ivar S. Fossum Board member Board member CEO

ARTICLES OF ASSOCIATION for Nordic Mining ASA per 28 August 2013

• 1. The name of the company is Nordic Mining ASA. The company is a public limited liability company.
• 1. The registered office of the company is in Oslo.
• 1. The object of the company is to carry on exploration for coal, minerals and ores, mining activity, technology development, activities that may be associated herewith, and participation in other companies anywhere in the world.
• 1. The share capital of the company amounts to NOK 28,050,480.50 divided on 280,504,805 shares of a nominal value of NOK 0.10. The shares of the company shall be registered in the Norwegian Registry of Securities.
• 1. The board of directors of the company shall have from 3 to 8 members according to the decision of the shareholders' meeting. Two board members jointly can sign on behalf of the company.
• 1. The company shall have an Election Committee consisting of three members who shall be elected by the general meeting. The members of the Election Committee shall, when they are elected, be shareholders or representatives of shareholders of the company. The Election Committee shall make recommendations to the general meeting concerning the election of members and deputy members to the board of directors. The Election Committee shall also make recommendations concerning remuneration to such members. Members of the Election Committee are elected for a period of two years. The members of the board of directors which have been elected by the general meeting make recommendations for and adopt instructions for the Election Committee.
• 1. The shareholders' meeting shall deal with:
• i) Adoption of the annual accounts and annual report, including payment of dividends.
• ii) Other matters that pursuant to law are the business of the shareholders' meeting.
• 1. If a document that relates to an issue that the general meeting shall decide on is made available to the company's shareholders on the company's website, then such a document does not have to be physically sent to the shareholders of the company. However, such a document shall be sent to the shareholder free of charge if shareholders request it.
• 1. Shareholders that plan to attend a General meeting have to give notice to the company within 5 days of the general meeting. Shareholders who have not given such notice within 5 days of the general meeting may be denied entrance to the general meeting.

FINANCIAL CALENDAR 2014

February May May August November

28 Fourth quarter results 2013

16 First quarter results 2014

27 Annual General Meeting

15 Second quarter results 2014

14 Third quarter results 2014

Nordic Mining ASA Munkedamsveien 45 A NO-0250 Oslo Norway Tel: +47 22 94 77 90 Fax: +47 22 94 77 91 www.nordicmining.com