Nordic Mining ASA

Quarterly Report • Feb 11, 2025

INTERIM REPORT Per 31 December 2024

MINERALS FOR A SUSTAINABLE FUTURE

SAFETY | ENVIRONMENT | INNOVATION

Nordic Mining ASA ("Nordic Mining" or the "Company") is a resource company with focus on highend industrial minerals and metals. The Company is undertaking a large-scale industrial development at Engebø on the west coast of Norway through its wholly owned subsidiary, Engebø Rutile and Garnet AS, which has mining rights and permits to a substantial eclogite deposit with rutile and garnet.

In addition, Nordic Mining holds interests in other initiatives at various stages of development. This includes patented rights for a new technology for production of alumina and landowner agreement for exploration and development of a high purity quartz deposit in the Kvinnherad Municipality in Norway. Nordic Mining's project portfolio is of high international standards and holds significant economic potential.

Nordic Mining is listed on Oslo Stock Exchange.

Group interim report for the quarter ended 31 December 2024

Nordic Mining ASA ("Nordic Mining" or the "Company") is a Norwegian mining and minerals company incorporated in Oslo, Norway. The Company is currently ramping up production from one of the worlds' largest resources of natural rutile in the dual mineral Engebø deposit ("Engebø" or the "Engebø Project"), and the Company is committed to deliver critical minerals to Europe and international markets, producing the worlds' most climate friendly titanium feedstock.

The Engebø deposit has among the highest grades of rutile (TiO2) compared to existing producers and other projects under development. The deposit also contains significant quantities of highquality almandine garnet. Based on the current resource and reserve estimates, the mine-life is 39 years, comprising 15 years of open pit mining followed by 24 years of underground mining and stockpile reclamation. Favorable location, topography and local green hydropower enables efficient and climate friendly production of high-quality natural rutile and garnet. Engebø was fully financed by USD 277 million in March 2023. The construction is completed through four lump-sum EPC ("Engineering, Procurement and Construction") contracts with Sunnfjord Industripartner AS, Åsen & Øvrelid AS, Nordic Bulk AS and Normatic AS, and all parts of the mine and processing plant have been installed and commissioned at site. Offtake agreements have been secured for up to the full production of rutile and garnet for the first 5 years of production.

Highlights

• The construction project at Engebø has to date (31st December 2024) reported 995 working days by the four EPCs, including subcontractors, with zero LTIs. Total hours worked at site by the EPCs exceeded 400 000 hours in the quarter.
• First mineral concentrate was produced at Engebø on 23 December 2024.
• The Company reported NOK 139.4 million in capitalized costs related to the construction of the Engebø Project in the fourth quarter. The Company's consolidated carrying amount for Mine under construction and Property, plant and equipment was NOK 2.75 billion as of 31 December 2024.
• The company transferred from trading on Euronext Expand to Euronext Oslo Børs in November 2024.

Engebø project development and economy

• The main construction activities at Engebø were completed during the fourth quarter. Only minor balance of plant items remains to complete the scope of work for the EPC and subcontractors. These activities have no impact to the production ramp-up as final testing of machinery is ongoing with EPCs and process equipment suppliers.
• The final documentation requirements according to the Planning and Building Act are being prepared by the various responsible companies in accordance with the different building applications.
• First ore to the milling and mineral separation circuits achieved in November 2024.
• First mineral concentrate achieved on 23 December 2024.
• The Company did not achieve all ramp-up goals set for January 2025 due to unforeseen challenges realised as capacity was increased during production ramp up. These issues have been identified and most have been rectified. Where rectification has not been possible, temporary short-term solutions have been implemented as we await remedied

equipment for the final solution. Temporary solutions reduce part of plant throughput but is not expected to have a significant impact on requirements in this current stage of rampup.

• The ramp-up is currently in a phase with uncertainty, where process equipment has increasing load and extended operating hours. Additional unforeseen challenges or debottlenecking requirements might occur as the ongoing tasks are of high complexity, and activities are running in parallel to achieve the production ramp-up plans.
• Revenue forecast shifted approximately one quarter by comparison to previous expectations based on the production ramp-up challenges.
• The Company target for first shipment of garnet in the end of first quarter and first shipment of rutile in second quarter.
• The Company is fully funded until positive cash flow, but due to deferred revenues the cash low-point will be lower than the previously reported project reserves of USD 25 million.

Market development

The pigment market declined in Q4 due to several reasons, with the main drivers being the conflicts in Ukraine and the Middle East, as well as usual seasonal effects in the Northern Hemisphere. Implementation of definitive tariffs for Chinese TiO2 pigment into EU is expected to reduce the price competitiveness of Chinese imports and support operating rates for Western pigment producers. This may result in higher demand prospects for titanium feedstocks in the West going into 2025.

The demand for aircraft worldwide is strong and is growing resulting in steady demand for titanium sponge. Titanium sponge producers are reporting production levels at full capacity.

As from Q3 2023, rutile prices have been weakening due to the weakness in the pigment segment. Rutile prices seem to have stabilized and are expected to strengthen in 2025, driven by the improved market conditions in the pigment and metal sectors.

The Company has two rutile offtake agreements covering up to full production volume of rutile for the first five years. Price is based on market price mechanisms using global, independent consulting and publishing company TZ Minerals International Pty Ltd.

Industrial markets in both North America and Europe struggled in Q4. This was reflected in economic indicators and directly reflected slower demand for industrial abrasives including garnet. This trend continued into January, but there are early indications that demand will improve over the course of 2025.

Nordic Mining has offtake agreement for garnet with marketing partner BARTON group. Volume and prices are fixed for the first five years.

Financial performance in fourth quarter 20241

The Engebø Project is currently in production ramp-up and the Group has, so far, no sales revenues from operations. Reported operating loss for the fourth quarter was NOK -26.9 million (NOK –9.6 million) and NOK -54.6 million for the full year (NOK -46.5 million).

Net financial items were NOK -67.6 million in the fourth quarter (NOK 28.9 million) and NOK -60.4 million for the full year (NOK 0.4 million). The main financial items in the fourth quarter

¹ Unless other information is given, numbers in brackets for comparison relate to the corresponding period in 2023.

consisted of net loss on foreign exchange related to the bond loan and royalty liability of NOK -134.9 million, other foreign exchange gain of NOK 15.1 million, interest on cash held of NOK 5.4 million, change in estimate of royalty liability of NOK 47.9 million and transaction costs from financing of NOK -1.0 million. Please see note 9 and 10 for further information. Borrowing costs on bond loan and royalty liability, net of interest on bond Escrow, has been capitalized under Mine under construction, in total NOK 71.4 million in the fourth quarter and NOK 242.6 million for the full year.

Reported net loss in the fourth quarter was NOK -94.5 million (NOK 19.3 million) and reported net loss of NOK -115.0 million for the full year (NOK -46.1 million).

In the fourth quarter, the Group has capitalized costs related to the construction work at Engebø of NOK 139.4 million on the balance sheet under Mine under construction, down from NOK 278.3 million in the third quarter of 2024 due to less capital-intensive work in the quarter. For the full year the Group capitalized costs related to the construction work at Engebø of NOK 1,346.0 million compared to NOK 1,088.7 million in 2023. Nordic Mining's consolidated combined carrying amount for Mine under construction and Property, plant and equipment was NOK 2.75 billion as of 31 December 2024 (Third quarter 2024: NOK 2.6 billion).

Net cash flow from operating activities for the full year was NOK -48.1 million (NOK -41.0 million). Net cash flow from the Group's investment activities related to Investment in mine under construction for the full year was NOK –1,072.8 million (NOK -885.1 million), and NOK -87.8 million (NOK -2.6 million) related to Acquisition of property, plant and equipment. The cash flow amount does not include capitalized net borrowing costs or outstanding payables, both of which are booked on the balance sheet under Mine under construction and Property, plant and equipment. Interest on the bond loan for the full year of 2024 of USD 12.0 million (corresponding to NOK 136.3 million) is included in interest and financing fees paid. Please see note 6 for further information related to the bond Escrow account. For the full year, the Group released USD 108 million (corresponding to NOK 1,152.4 million) from the bond Escrow account, resulting in net cash flow from financing activities of in total NOK 1,014.3 million (NOK 1,404.4 million).

The Group's cash and cash equivalents as of 31 December 2024 were NOK 454.8 million (Third quarter 2024: NOK 586.3 million). In addition, the Group had NOK 12.6 million on restricted account pledged toward Directorate of Mining ("DirMin") for clean-up measures in accordance with the operating license.

Nordic Mining's total assets as of 31 December 2024 were NOK 3.3 billion (31 December 2023: NOK 3.1 billion), and total equity was NOK 1.4 billion (31 December 2023: NOK 1.5 billion).

For further information relating to the Company's risk assessments, reference is made to the annual report for 2023 which is available on the Company's webpage www.nordicmining.com.

Oslo, 10 February 2025 The Board of Directors of Nordic Mining ASA

CONSOLIDATED INCOME STATEMENT

		2024	2023	2024	2023	2023
		01.10-31.12	01.10-31.12	01.01-31.12	01.01-30.09	01.01-31.12
(Amounts in NOK thousands)	Note	Unaudited	Unaudited	Unaudited	Unaudited	Audited
Payroll and related costs		(3 915)	(2 921)	(11 126)	(12 161)	(15 082)
Depreciation and amortization	4	(1 499)	(108)	(2 726)	(238)	(346)
Other operating expenses	8	(21 531)	(୧ ୧୦୨)	(40 753)	(24 432)	(31 041)
Operating profit/ ( loss )		(26 945)	(9 638)	(54 605)	(36 831)	(46 469)
Fair value gains/losses on convertible loan					3 354	3 354
Net exchange rate gain/loss (-)	9, 10	(119 824)	24 190	(127 106)	1 721	25 911
Financial income	10	53 300	5 072	69 806	21 027	26 099
Financial costs	10	(1 058)	(372)	(3 115)	(54 630)	(55 002)
Profit/(loss) before tax		(94 527)	19 252	(115 020)	(65 359)	(46 107)
Income tax
Profit/ ( loss ) for the period		(94 527)	19 252	(115 020)	(65 359)	(46 107)
Earnings per share
(Amounts in NOK)
Basic earnings per share		(0,87)	0,18	(1,06)	(0,78)	(0,51)
Diluted earnings per share		(0,87)	0,18	(1,06)	(0,78)	(0,51)

STATEMENT OF COMPREHENSIVE INCOME

	2024	2023	2024	2023	2023
	01.10-31.12 Unaudited	01.10-31.12 Unaudited	01.01-31.12 Unaudited	01.01-30.09 Unaudited	01.01-31.12 Audited
(Amounts in NOK thousands)
Net profit/ (loss) for the period	(94 527)	19 252	(115 020)	(65 359)	(46 107)
Other comprehensive income: Items that will not be reclassified subsequently to profit or loss: Changes in pension estimates, net of tax	317	536	317		536
Other comprehensive income directly against equity	317	536	317		536
Total comprehensive income/(loss) for the period	(94 210)	19 788	(114 703)	(65 359)	(45 571)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

		31.12.2024	31.12.2023
(Amounts in NOK thousands)	Note	Unaudited	Audited
ASSETS
Non-current assets
Mine under construction	3	2 654 418	1 377 083
Property, plant and equipment	4	97 171	3 062
Right-of-use assets		663	1 025
Pension assets		111
Total non-current assets		2 752 363	1 381 170
Current assets
Trade and other receivables		27 704	30 561
Spare parts inventory		10 011
Bond Escrow	6		1 075 042
Restricted cash		12 645	8 430
Cash and cash equivalents		454 774	634 984
Total current assets		505 134	1 749 017
Total assets		3 257 497	3 130 187
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity	5	1 300 938	1 300 938
Share capital		276 410	277 928
Share premium Other paid-in capital		16 038	16 038
Retained earnings/(losses)		(177 263)	(62 243)
Other comprehensive income/(loss)		(3 379)	(3 696)
Total equity		1 412 744	1 528 965
Non-current liabilities
Lease liabilities		194	466
Bond loan	6	1 043 609	902 182
Royalty liability	7	599 798	517 574
Pension liabilities			219
Total non-current liabilities		1 643 601	1 420 441
Current liabilities
Trade payables		44 394	94 312
Other current liabilities		156 757	86 468
Total current liabilities		201 151	180 780
Total liabilities		1 844 752	1 601 221
Total shareholders' equity and liabilities		3 257 497	3 130 187

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Unaudited

(Amounts in NOK thousands)	Note	Share capital	Share premium	Other-paid-in capital	Other compre hensive income/(loss)	Accumulated osses	Total equity
Equity 1 January 2023		139 390	319 430	16 038	(4 232)	(16 135)	454 491
Profit/(loss) for the period						(46 107)	(46 107
Other comprehensive income		-	-	-	536	-	536
Total comprehensive income			-	-	536	(46 107)	(45 571)
Share issue		1 161 548		-			1 161 548
Transaction costs			(41 501)		-		(41 501
Equity 31 December 2023		1 300 938	277 928	16 038	(3 696)	(62 243)	1 528 965
Equity 1 January 2024		1 300 938	277 928	16 038	(3 696)	(62 243)	1 528 965
Profit/(loss) for the period						(115 020)	(115 020)
Other comprehensive income					317		317
Total comprehensive income				-	317	(115 020)	(114 703)
Share issue	5	0					0
Transaction costs	5	-	(1 518)				(1 518)
Equity 31 December 2024		1 300 938	276 410	16 038	(3 379)	(177 263)	1 412 744

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

	2024	2023
	01.01-31.12	01.01-31.12
(Amounts in NOK thousands) Note	Unaudited	Audited
Operating activities:
Net cash from/used (-) in operating activites	(48 085)	(40 990)
Investing activities:
Investment in mine under construction	(1 072 832)	(885 096)
Acquisition of property, plant and equipment	(87 803)	(2 628)
Sale of property, plant and equipment		359
Net cash used in investing activities	(1 160 635)	(887 365)
Financing activities:
Share issuance	O	1 021 926
Transaction costs, share issue	(1 518)	(41 501)
Transfer from Bond Escrow 6	1 152 427
Net proceeds from royalty financing		536 820
Interest paid	(136 317)	(88 694)
Other financing fees paid		(23 686)
Payment of lease liabilities	(305)	(439)
Net cash from financing activities	1 014 287	1 404 426
Net change in cash and cash equivalents	(194 433)	476 072
Cash and cash equivalents at beginning of period	634 984	164 703
Effect of exchange rate fluctuation on cash held	14 224	(5 791)
Cash and cash equivalents at end of period	454 774	634 984
Net change in restricted cash	4 215	4 215
Restricted cash at beginning of period	8 430	4 215
Restricted cash at end of period	12 645	8 430
Restricted and unrestricted cash at end of period	467 419	643 414

NOTES TO THE INTERIM FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 December 2024

Note 1 – ACCOUNTING PRINCIPLES

These interim financial statements have been prepared in accordance with International Accounting Standard (IAS) 34, "Interim Financial Reporting". They do not include all the information required for full annual financial reporting and should be read in conjunction with the consolidated financial statements of Nordic Mining ASA and the Group for the year ended 31 December 2023.

This report was authorized for issue by the Board of Directors on 10 February 2025.

The accounting policies adopted are consistent with those followed in the preparation of the Company's and the Group's annual financial statements for the year ended 31 December 2023. In 2024 the Group has entered into derivative foreign exchange contracts. See note 9. Derivative instruments are classified as financial assets or liabilities at Fair Value Through Profit or Loss (FVTPL). The carrying value of derivative instruments at FVTPL represents the instrument's fair market value. Any gains or losses arising on re-measurement are recognized in the income statement as incurred.

New standards, amendments and interpretations to existing standards effective from 1 January 2024 did not have any significant impact on the financial statements.

Note 2 – SEGMENTS

The Group presents segments based on of the Group's mineral projects. The only reportable segment of the Group is the Rutile and Garnet segment. These are the minerals which can be produced from the mineral deposit at Engebø. The Chief Operating Decision Maker ("CODM") for the segment is the board of Nordic Mining ASA.

Note 3 - MINE UNDER CONSTRUCTION

The Engebø project is in a test phase and ramp-up phase, which means that the construction phase has been completed and all significant parts of the mine and processing plant have been installed and commissioned at site. At the end of the period, the company does not consider the plant to be operating in the manner intended by the management and the direct costs related to the work described above have been capitalized in the balance sheet as Mine under construction.

Note 4 - PROPERTY, PLANT AND EQUIPMENT

Additions to Property, plant and equipment in 2024 relate mainly to the administration building and the process area workshop. The administration building and the process area workshop are depreciated on a straight-line basis over an estimated useful life of 39 years.

Note 5 - SHARE CAPITAL

Following the issuance of 5 shares in Q1 2024 to facilitate the 20:1 reverse split completed in the first quarter, Nordic Mining's share capital increased by NOK 3 to NOK 1,300,938,396 divided into 108,411,533 shares, each with a par value of NOK 12.

Note 6 - BOND LOAN AND BOND ESCROW

Nordic Mining ASA's wholly owned subsidiary Engebø Rutile and Garnet AS has a USD 100 million 5-year senior secured bond listed on Nordic ABM with ticker: ERUGA01 PRO. The bond is administered by Nordic Trustee, has fixed coupon of 12.5% per annum, with interest payable quarterly in arrears, and an issue price of 90%.

The net proceeds of the bond of USD 90 million were on issue deposited into a Bond Escrow account, together with issue discount of USD 10 million, four months bond interest of USD 4.2 million, and transaction costs of USD 3.3 million, transferred by Engebø Rutile and Garnet AS in line with the bond terms. Following conditions of the Engebø Project being fully funded, which were satisfied on 8 March 2023, the bonds were reclassified to non-current liability in the statement of financial position. The proceeds from the bond were released in three tranches from the Bond Escrow account after satisfaction of certain predisbursement conditions precedent, to be used for costs and expenditures to bring the Engebø Project into commercial production.

In Q1 2024 the first release of USD 30 million from the bond escrow was completed, in Q2 2024 the second release of USD 30 million was completed, and in Q3 2024 the Company completed the third and final release of USD 48 million.

The bond agreement has a financial covenant stipulating that Engebø Rutile and Garnet AS shall at all times maintain cash on its account of no less than USD 15 million. A breach of the covenant could result in a default under the agreement.

Note 7 - ROYALTY LIABILITY

In November 2023 Nordic Mining ASA's wholly owned subsidiary Engebø Rutile and Garnet AS completed drawdown of the USD 50 million non-dilutive royalty instrument from OMRF (Zr) LLC which is managed by the Orion Resource Partners Group ("Orion"). The future royalty payments under the royalty agreement equal to 11% of gross revenue from the Engebø Project.

The royalty liability was initially recognized at the USD 50 million drawdown received net of directly attributable transaction costs at drawdown. After initial recognition the liability under the royalty agreement is subsequently measured at amortized cost using the effective interest method.

Amortized cost is recognized as borrowing cost and capitalized under Mine under construction until construction is completed, in total NOK 111.1 million YTD 2024.

In fourth quarter 2024 the Company has, based on updated Rutile price forecasts from TZMI, revised its estimates of future cash flows related to the royalty agreement. The net effect of the change in estimate, NOK 47.9 million, has been recognized as financial income.

Next year's estimated royalty payments have been reclassified to other current liabilities.

Note 8 - OTHER OPERATING EXPENSES

The Norwegian Supreme Court ruled in March 2024 in favor of Nordic Mining on all counts in the case against Arctic Mineral Resources ("AMR"). The court also ruled that AMR shall pay all legal expenses. Total refund of legal expenses amounted to NOK 12.4 million and has been recorded as a reduction of other operating expenses in Q1 2024. The amount was received in April 2024.

Note 9 - FOREIGN EXCHANGE (FX) DERIVATIVE CONTRACTS

The Group has entered into foreign exchange (FX) derivative contracts for forward sale of USD and purchase of NOK in Q2 2024 and Q3 2024. The purpose of the trades was to hedge the USD/NOK foreign exchange rate for the release of USD amounts from bond escrow. The value dates aligned with the expected bond Escrow account release dates for the second and third releases.

				Buy
Description	Sell currency Sell amount Buy currency			amount	Exchange	Value Date
Forward FX contract	USD	25 million	NOK	262.5 million		10,5000 23 May 2024
Forward FX contract	USD	20 million	NOK	211.6 million	10,5818	20 Aug 2024

The contracts listed above expired in Q2 and in Q3 2024, with a net YTD loss of NOK 5.9 million. See note 10.

Note 10 - NET EXCHANGE RATE GAIN/LOSS (-), FINANCIAL INCOME AND FINANCIAL COSTS

2024:

Net exchange rate gain/loss (-) in the fourth quarter and YTD 2024 consists mainly of:

• foreign exchange gain of NOK 0.0 million on bond Escrow in USD (YTD 2024: gain NOK 51.9 million),
• foreign exchange loss of NOK 84.6 million on the USD bond loan (YTD 2024: loss NOK 118.1 million),
• foreign exchange loss of NOK 50.3 million on the USD royalty liability (YTD 2024: loss NOK 66.3 million),
• foreign exchange gain of NOK 0.0 million on foreign exchange derivatives (YTD 2024: loss NOK 5.9 million), and
• other foreign exchange gain of NOK 15.1 million (YTD 2024: gain NOK 11.3 million).

Financial income in the fourth quarter and YTD 2024 consists mainly of:

• interest on cash held of NOK 5.4 million (YTD 2024: NOK 21.9 million).
• change in estimate royalty liability of NOK 47.9 million (YTD 2024: NOK 47.9 million).

Financial costs in the fourth quarter and YTD 2024 consist mainly of:

• transaction costs, fees from financing and other items of NOK 1.0 million (YTD 2024: NOK 3.1 million).

2023:

Net exchange rate gain/loss (-) in the fourth quarter and YTD 2023 consists mainly of:

• foreign exchange loss of NOK 46.9 million on bond Escrow in USD (YTD 2023: gain NOK 30.9 million),
• foreign exchange gain of NOK 45.0 million on the USD bond loan (YTD 2023: loss NOK 31.5 million),
• foreign exchange gain of NOK 31.6 million on the USD royalty liability (YTD 2023: gain NOK 31.6 million), and
• other foreign exchange loss of NOK 5.4 million (YTD 2023: loss NOK 5.0 million).

Financial income in the fourth quarter and YTD 2023 consists mainly of:

• interest on cash held and bond Escrow of NOK 5.1 million (YTD 2023: NOK 26.1 million).

Financial costs in the fourth quarter and YTD 2023 consists mainly of:

• interest costs on bond loan of NOK 0.0 million as borrowing costs have been capitalized to Mine under construction (YTD 2023: NOK 30.1 million), and
• transaction costs from financing of NOK 0.3 million (YTD 2023: NOK 24.8 million).

Note 11 - FIXED PRICE ELECTRICITY CONTRACT

The Company has entered into a fixed price contract for the purchase of electricity to the mining facilities in Engebø. The fixed price contract covers a portion of the estimated use by the production facilities over the next three years (2025-2027). The contract qualifies for the own use exemption under IFRS 9 and is not defined as a financial instrument.

Note 12 – EVENTS AFTER BALANCE SHEET DATE

In January there was a minor fire discovered in one of the drying machines at the Engebø facility. No one was injured due to the incident, and the incident was handled according to procedures. The fire has not caused any significant delays in the production ramp-up phase.