Nordic Mining ASA — Interim / Quarterly Report 2021

Nov 9, 2021

Nordic Mining ASA (EN Expand:NOM) - Interim report per 30 September 2021

Nordic Mining ASA (EN Expand:NOM) - Interim report per 30 September 2021

Please find enclosed Nordic Mining's interim report and company presentation for

the third quarter of 2021. The interim report and company updates will be

presented digitally today, Tuesday 9 November 2021 at 10.00 (CET). The

presentation and Q&A session will be held in English and transferred via

webcast. You will have the opportunity to post questions online throughout the

webcast session. The webcast will be available on:

https://channel.royalcast.com/landingpage/hegnarmedia/20211109_3/

Important events in the third quarter of 2021 and year to date:

CORPORATE

Successful capital raise of NOK 80 million

In February 2021, Nordic Mining completed a private placement with gross

proceeds of NOK 80 million. The capital raise enabled the Company to participate

in Keliber's equity issue in March/April to retain an ownership of 14.3%. The

ownership in Keliber was in September 2021 diluted to 12.7%. See note 3 for

further information. The remaining funds will be used towards securing financing

for the Engebø project, and preparing for execution, as well as development of

the Group's position within the seabed mineral resources area, and for general

corporate purposes and business development.

ENGEBØ RUTILE AND GARNET PROJECT (100% ownership)

Lump sum EPC contracts signed with partners for Engebø Project construction

In November 2021 Nordic Mining signed, through its wholly owned subsidiary

Nordic Rutile AS, lump sum contracts for the Engineering, Procurement and

Construction ("EPC") for the Engebø Rutile and Garnet project's selected EPC

partners Sunnfjord Industripartner AS, Åsen & Øvrelid AS and Nordic Bulk AS. The

EPC contracts represent a formalization of the Letters of Intent signed between

the parties in June 2021 and comprise a lump sum price for the agreed scope of

work agreed in the EPC contracts. Nordic Bulk AS scope of work has been extended

to include the procurement of mechanical equipment for the crushing circuit. The

last EPC contract with Normatic AS is expected to be finalized and signed later

in November. In total the four lump sum EPC contracts will cover around 75% of

the total plant and mine capital expenditure of USD 203.4 million. The EPCs

partners will continue to work with the owners' team to further advance selected

Detailed Engineering work originally part of the UDFS construction work.

In June 2021 the Company signed Letters of Intent with leading engineering

companies Hatch and Sweco as Project Management Consultant ("PMC") for the

Engebø Rutile and Garnet project. The PMC will be integrated in the owners'

team, reporting to the Engebø Project Director, and will be responsible for

process design, and overall engineering coordination and integration of the

selected partners for Engineering, Procurement and Construction.

Full victory for Nordic Rutile

In October Oslo District Court ruled in favor of Nordic Rutile on all items in

the court case against Artic Mineral Resources ("AMR"). The ruling confirms that

Nordic Rutile's extraction rights are valid and that the company has the right

to extract and - within the limits of the Norwegian Mining's Act - utilize

garnet and all other minerals on the Vevring side of the Engebø deposit, and

conversely fully rejects AMR's claim. The ruling was expected, and Nordic Rutile

will now focus on securing awarded legal expenses of NOK 3.5 million.

Updated Definitive Feasibility Study reconfirms Engebø as a world class mineral

project

In May 2021 Nordic Mining ASA completed the Updated Definitive Feasibility study

("UDFS") for the Engebø Rutile and Garnet project. The UDFS is an update of the

DFS which was completed in January 2020. The UDFS confirmed Engebø as a

sustainable and economically robust mineral project with reduced financing risk,

improved financial resilience, and attractive financials returns.

Key UDFS economic figures and highlights:

·

· Pre-tax NPV@8% of USD 355 million

· Pre-tax IRR of 22.5%

· Post-tax NPV@8% of USD 260 million

· Post-tax IRR of 19.8%

· High-margin cash flow and short pay-back support bankability:

· Initial capital investment of USD 218 million reduced from USD 311 million

in DFS, maintaining a Run-of-Mine ("ROM") of 1.5 Mtpa

· Life of Mine EBITDA of USD 2.1 billion, corresponding to an EBITDA-margin

of 68%

· Life of Mine Operating Cash Flow of USD 1.7 billion

· Free Cash Flow the first 10 years of full operations of USD 51 million per

annum

· Pay-back period of 4.4 years from start of production

· Reduced environmental footprint:

· 99% reduction in consumption of approved chemicals in the production

process (compared with the 2016 environmental permit)

· ~ 80% reduction of CO2 emissions

· ~ 40% reduction of the process plant facilities footprint

Long-term offtake agreements signed for the full rutile production from Engebø

In July 2021 Nordic Mining signed term sheets for offtake of rutile with a

reputable Japanese trading house and Kronos (US), INC., a globally leading

pigment producer and, which subject to the entering into of the final offtake

agreement, will secure sales for all the annual production of rutile for the

first five years of production. The term sheet with the Japanese trading house

builds on the Heads of Agreement signed in January 2019 for offtake of rutile

and participation in the financing for the Engebø project.

The parties are in the process of finalizing the final offtake agreement, which

in respect of the Japanese trading house will be negotiated in parallel with

negotiating their participation in the financing of the Engebø project and

expect the final agreements to be signed by year-end.

Nordic Mining is currently in constructive discussions with selected partners

for offtake and distribution of garnet to Europe and overseas markets.

Processes ongoing with selected strategic investors related to participation in

project financing

In June 2021, Nordic Mining appointed Clarkson Platou Securities AS ("CPS") and

SpareBank 1 Markets AS ("SB1M") to advice on the project financing for the

Engebø project. Positive interest has been received from investor pre-soundings

undertaken this summer-autumn, and the Group is now in processes with selected

strategic investors related to possible participation in the project financing.

The formal financing process will be started in due course pending final

decision on the operating license by the Ministry of Industries, Trade and

Fisheries.

Implementation of environmental and social management systems

The Company is implementing an integrated and comprehensive Environmental and

Social Management System ("ESMS") for the Engebø project to ensure environmental

and social issues are managed in accordance with International Finance

Corporation's ("IFC") Performance Standards and the Equator Principles, as well

as Norwegian permits and regulations.

The Company has implemented a Stakeholder Engagement Plan to strengthen and

build sustainable stakeholder relations prior to, and during construction, and

further into the production phase, and is in the process of finalizing and

implementing a Waste Management Plan and a Closure and Rehabilitation Plan. The

management plans have been reviewed by the international mining consultancy firm

SRK Consulting ("SRK") to ensure compliance with the IFC standards. A local

resource group has been established with participation from key stakeholder

groups to participate in the Company's environmental monitoring program.

Revised discharge permit granted

In January 2021, the Environment Agency granted a revised discharge permit

implying a substitution of chemicals from the original permit, commenting that

the significant reduction in chemical consumption will have lower impact on the

environment than the previously planned consumption.

Long-term rutile price expectations increase as result of increasing supply

uncertainty

Bulk rutile prices continued to increase in the third quarter of 2021 as the

already strong demand for high-grade feedstocks was inflated by low inventory

levels and shortages of chloride feedstock in North America and Europe. Reports

from western producers indicate that the strong and increasing demand will limit

their opportunities to rebuild inventories for the remainder of 2021, and that

this momentum could extend into 2022. Notwithstanding Iluka's decision to delay

its suspension of operation from November 2021 to January 2022, the overall

supply impact is muted driven by the supply disruption at Rio Tinto's Richards

Bay plant in South Africa. TZMI have on the back of this revised their 2020 bulk

rutile price forecast to over USD 1,400/mt FOB, corresponding to a price

increase of close to 15% compared to the forecasted average bulk price in 2021.

Real long-term bulk rutile prices are expected to remain in the range USD 1,300

-1,320/mt FOB, which is USD 120-140/mt above the long-term rutile price used in

the UDFS in May 2021.

The garnet demand in 2020 was impacted by reduced economic activity and lower

oil price. Prices of garnet to end-customers in the main markets in Europe and

USA have to a large extent been reported to remain unaffected, despite demand

having contracted with an estimated 20-25%. The existing main producers of

garnet are in Australia, China, India, and South-Africa, with no production in

Europe. In the USA, domestic production is significantly short of the demand.

Various garnet buyers have indicated that long-term supply of high-quality

garnet from Europe is important for supply security and efficient logistics.

Nordic Mining has provided garnet samples for testing, and the results compare

well with industrial reference qualities.

Positive discussions continue with potential distributors for long-term offtake

agreements.

KELIBER LITHIUM PROJECT (12.7% ownership)

Rallying lithium prices are boosting valuation of lithium development projects

Lithium development equities has seen a positive movement over the past year

driven by the massive increase in adaptation of EV's and improved investor

sentiment towards the green transition, with the share prices of a Keliber peer

-group having increased by over 330% on average over the last year. The Group

have as per 30 September 20210 assessed the fair value the Keliber investment to

NOK 193.9 million per Q3 2021, which represents a fair value gain of NOK 72.6

million compared to the second quarter of 2021. See note 3 for details on fair

value assessment as per 30 September 2021.

Sibanye-Stillwater closes EUR 10 million second tranche of equity investment in

Keliber

In February 2021, Keliber entered into an investment agreement with the leading

international mining company Sibanye-Stillwater Limited ("SSW") for an initial

phased equity investment of EUR 30 million for approximately 30% shareholding in

Keliber. In line with the agreement the second tranche of SSWs initial

investment of EUR 10 million was closed in September 2021, making SSW the

largest shareholder in Keliber with a shareholding of 26.7%. Following the share

issue, Nordic Mining was diluted from 14.3% to 12.7% ownership in Keliber. The

first tranche of SSWs initial investment of EUR 15 million was closed in March

2021, and at the same time a share issue of up to 250,000 shares was opened to

existing shareholders of Keliber. Nordic Mining was allocated in total 58,975

shares in the share issue at a price of EUR 40 per share corresponding to 23.6%

of the share issue.

SSW plans to play a key role as an industrial anchor investor in the project

financing planned for mid-2022 and has in accordance with the investment

agreement the option to secure a majority shareholding in Keliber, following the

completion of the updated Feasibility Study.

Reserves of Keliber's largest lithium deposit increased by 30%

Keliber announced on 15 September 2021 an update of the company's ore reserve

estimate, with an effective date as of 31 August 2021. The update is based on

the revised mineral resource estimate, published in May 2021. Keliber's total

proven and probable ore reserves have increased to 12.30 million tonnes,

representing a growth of 32 percent, compared to the previous estimate published

in December 2019. The ore reserves of the largest lithium deposit, Rapasaari,

have increased by 55 percent.

Keliber's total proven and probable ore reserves are 12.30 million tonnes (2019:

9.37 million tonnes) at an average grade of 0.94% (2019: 0.98%) Li?O, using a

cut-off grade of 0.40% Li?O for the open pit ore reserves and a cut-off grade of

0.40-0.70% Li?O for the underground ore reserves. The Rapasaari deposit

represents 67% (2019: 56%) of Keliber's total ore reserves.

The total measured and indicated mineral resources of Keliber is total 13.69

million tonnes (previously 11.77). Including the inferred mineral resources, the

total mineral resources are 15.62 million tonnes (previously 14.19). The average

Li?O grade of the Keliber's combined mineral resources is 1.05%.

Keliber's ore reserve and mineral resource estimates comply with the JORC 2012

code. See note 3 on fair value assessment of the investment in Keliber as per 30

September 2021.

Project update and review

Keliber continues to advance the lithium project including technical planning,

permitting, ore potential, market assessments and financing. The company have

decided to increase the production capacity for lithium hydroxide from 12,000 to

15,000 tonnes per year. Further, the concentrator plant will be moved closer to

the main spodumene deposits to increase efficiency and reduce environmental

footprint. Basic engineering work is ongoing related to the concentrator,

tailings disposal solutions and the chemical plant.

Environmental permit applications for all main activities have been submitted.

The Environmental Impact Assessment ("EIA") report for the concentrator and main

mining areas was submitted to the authorities in November 2020. In June 2021

Keliber submitted applications for environmental and water management permits

for the Rapasaari mine and the Päiväneva concentrator, following the Vaasa

Administrative Court rejection of the appeals to the permits. The environmental

permit application for the Kokkola chemical plant was submitted in December

2020. In June 2021 the ELY Centre for South Ostrobothnia issued a reasoned

conclusion on the EIA report for the Kokkola chemical plant stating that the

plant does not have a significant environmental impact. Keliber expects the

permit decision by end of 2021.

Keliber is expected to complete an update of the DFS early in 2022.

Electrical Vehicle market and shift to e-mobility driving lithium market outlook

In the first part of 2020, lithium prices were under pressure driven by the

uncertainties caused by the Covid-pandemic. In the second half of the year,

economic activity including electrical vehicle manufacturing picked up and the

market balance for lithium was tightening. The ongoing and expected recovery of

economies and the pace of transition towards greener and more sustainable

solutions are expected to fuel the lithium market in the coming years.

In the 2020 list of Critical Raw Materials, the European Union indicated that

Europe would need about 60 times more lithium, which is critical for a shift to

e-mobility, for EV batteries and energy storage by 2050. The first European

battery giga-factories are coming to production in 2021, and with more giga

-factories in project phase, including significant battery initiatives in the

Nordic countries.

Keliber's targeted position as a low-cost producer and the first producer in

Europe of battery-grade lithium hydroxide is expected to be an advantage when it

comes to future sales to battery manufacturers.

NORDIC OCEAN RESOURCES (NORA) (100% ownership)

Nordic Mining has taken pioneering initiatives related to seabed mineral in

Norway through the subsidiary Nordic Ocean Resources ("NORA") giving the Company

valuable knowledge for business development. NORA participated in the MarMine

project on marine mineral resources coordinated by the Norwegian University of

Science and Technology ("NTNU"). Research assessments indicate an attractive

potential for discovery of metallic ore deposits with possible significant

economic values within Norway's exclusive economic zone.

In 2019, the new Seabed Minerals Act came into force as result of systematic

mapping of seabed minerals by the Norwegian Petroleum Directorate. Prior to

opening for seabed mineral extraction, an environmental impact assessment must

be carried out and in January 2021 the Ministry of Petroleum and Energy on

issued a hearing for a proposal for an impact assessment program.

Nordic Mining have, in light of the positive developments on the regulation of

seabed minerals, and increased focus on how the Norwegian mining industry can

play an important role on seabed minerals to support the green transition,

increased the efforts to commercializing the Groups understanding and

positioning on seabed minerals developed through the pioneering initiatives of

NORA.

Oslo, 9 November 2021

Nordic Mining ASA

Nordic Mining ASA (www.nordicmining.com)

Nordic Mining ASA ("Nordic Mining" or the "Company") is a resource company with

focus on high-end industrial minerals and metals. The Company's project

portfolio is of high international standard and holds significant economic

potential. The Company's assets are in the Nordic region.

Nordic Mining is undertaking a large-scale project development at Engebø on the

west coast of Norway where the Company has rights and permits to a substantial

eclogite deposit with rutile and garnet. Nordic Mining also holds 12.7% of the

shares in Keliber Oy, which is developing a lithium project in Finland to become

the first European producer of battery grade lithium hydroxide.

In addition, Nordic Mining holds interests in other initiatives at various

stages of development. This includes patented rights for a new technology for

production of alumina and exploration of seabed minerals.

Nordic Mining is listed on Euronext Expand Oslo with ticker symbol "NOM".