Nordic Mining ASA — Interim / Quarterly Report 2021

Aug 13, 2021

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

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

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

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

presented digitally today, Friday 13 August 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/20210813_5/

Important events in the second 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

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)

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 will start 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.

Engineering, Procurement and Construction and Project Management Consultant

partners commissioned for construction

Nordic Mining signed in May 2021 Letters of Intent with Sunnfjord

Industripartner AS, Åsen & Øvrelid AS, Nordic Bulk AS, and Normatic AS as

partners for Engineering, Procurement and Construction (together EPCs) and

leading engineering companies Hatch and Sweco as Project Management Consultant

(PMC). The Letters of Intent are a formalization of EPCs contributions towards

the UDFS and the optimized contracting and execution strategy developed as part

of the UDFS. 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. The parties plan to formalize the

final EPC and PMC contracts during Q3 2021.

Following the commissioning of the EPCs and PMC the Company has started Pre

-Construction work to advance selected Detailed Engineering activities earlier

than UDFS project schedule, increasing flexibility on schedule for construction

activities.

Financial advisors appointed for financing of the Engebø project

In June 2021, Nordic Mining appointed Clarkson Platou Securities AS and

SpareBank 1 Markets AS to advice on the project financing for the Engebø

project. Pre-sounding with selected and strategic and financial investors to

explore available equity and debt structures has started and the process to

engage an Independent Technical Engineer for the financing transaction is

ongoing. The formal financing process is planned to start later this year, with

aim to conduct and execute financing by year-end 2021.

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 a Waste

Management 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.

Increasing demand for high-grade feedstock and supply uncertainty underpins

fundamentals for Engebø

Rutile demand continues to strengthen with recovery in Europe and USA in the

aftermath of the Covid-pandemic. Demand for high-grade feedstock is reported to

have been particularly strong in the US as result of chlorine supply challenges

for pigment production, with pigment producers having to increase the usage of

rutile to optimize production and capacity utilization in line with the

increasing demand. The average rutile price in the first half of 2021 is

reported to be around USD 1,230 per tonne (FOB), which is up around USD 30 per

tonne compared to the first quarter of 2021.

In May 2021, Iluka announced that it will suspend the production of rutile in

Sierra Leone from November this year as a result of poor economic performance.

This will reduce the global supply of rutile by more than 140,000 tons per year.

Iluka has indicated that the operations can be suspended for up to two years,

and if no progress is made, that the mine could move into closure. Furthermore,

the force majeure situation at Rio Tinto's Richards Bay plant in South Africa

has made the plant's future stability of high-titanium slag supply uncertain.

This represents a considerable short to medium term supply uncertainty, which

will continue to drive a tightening of the rutile market, with downstream users

now more active in securing rutile raw materials, and with spot supply of rutile

being very tight.

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 (14.3% ownership)

Measured and Indicated Mineral Resources of Rapasaari deposit increased by more

than 30%

In May 2021, Keliber increased the Measured and Indicated Mineral Resources of

the Rapasaari deposit to 8.10 million tonnes. This is an increase of 31% from

the previous resource estimate. Including Inferred Mineral Resource, the

increase is 17.4%. The total Measured and Indicated Mineral Resources of Keliber

now total 13.69 million tonnes (previously 11.77). Including the Inferred

Mineral Resources, the total Mineral Resources are 15.62 million tonnes

(previously14.19). The average Li?O grade of the Keliber's combined Mineral

Resources is 1.05%.

Keliber's Mineral Resource estimates comply with the JORC 2012 code, and are

reported at a cut-off grade of 0.50% Li?O.

Building international partnership with leading international mining company

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 March, the first tranche of the initial investment was closed with

SSW subscribing for shares for EUR 15 million, and at the same time a share

issue of up to 250,000 shares was opened to existing shareholders of Keliber. In

the issue, which was conducted in March/April 2021, Nordic Mining was allocated

in total 58,975 shares at an issue price of EUR 40 per share corresponding to

approximately 23.6% of the share issue, to retain an ownership of 14.3%. 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.

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 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 updated Environmental

Impact Assessment (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, 13 August 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 14.3% 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".