Europe’s next iron ore producer
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Europe’s next iron ore producer

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Mining On Top: Stockholm 2013

Mining On Top: Stockholm 2013
26-27 Nov 2013

Nordic Iron Ore update – Christer Lindqvist, Nordic Iron Ore; CEO and President

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    Europe’s next iron ore producer Europe’s next iron ore producer Presentation Transcript

    • Europe’s next iron ore producer IntierraRMG - Mining on the Top – Stockholm 10th Anniversary Conference 26-27 Nov 2013 1
    • Agenda  Introduction    Investment highlights Financial information Conclusion 2
    • Nordic Iron Ore at a glance  Restarting Ludvika Mines – Blötberget – concession granted – Väsman field – under further exploration – Håksberg – concession granted  A brownfield iron ore project  Existing rail from mine to deep water port  Environmental permit expected shortly  Scoping study shows very attractive ROI 3
    • Nordic Iron Ore - Project Up date Major Achievements 2013  New Scoping study Ludvika Mines - double production capacity  Definite Feasibility Study - Phase 1 Blötberget commenced  New Financier - State Investment Fund Inlandsinnovation AB  Increase in mineral resources; + 180%  LoI Oxelösund Port – secured port alternative  National Transport Administration – Commenced the rail project  1st Customer – LoI for coarse fines  Environmental Court proceedings commenced October 4
    • Our targets  Production 4.3 Mtpa  Production start coarse fines: Q3 2015  Start new beneficiation plant Q3 2016  Concentrate 67% Fe or better 5
    • Solid economics  IRR 24 per cent  Pay back period 5.4 years  At least 15 year life of mine 6
    • Competitive cost level Competitive cash cost and premium product Fortescue USD 76/dmt /NIO 7
    • Agenda  Introduction  Investment highlights   Financial information Conclusion 8
    • One of Sweden’s largest mineralisations Håksberg: Indicated 25 mt @ 36% Inferred 12 mt @ 36% Väsmans South mineralisation: Indicated 7 mt @ 39% Inferred 86 mt @ 38% Blötberget : Indicated 30 mt @ 45% Inferred 10 mt @ 43% 9
    • One of Sweden’s largest iron mineralisations Håksberg: Indicated 25 mt @ 36% Inferred 12 mt @ 36% 3 Väsmans South mineralisation: Indicated 7 mt @ 39% Inferred 86 mt @ 38% Blötberget : Indicated 30 mt @ 45% Inferred 10 mt @ 43% 10
    • Expansion potential 75000 MagTot (nt) 65000 55000 Targeting mineral resources in excess of 300mt N S 11
    • Beneficiation plant next to existing railway 12
    • Processing plant and terminal in Skeppmora (Blötberget) Existing Rail Road: Bergslagsbanan Processing plant designed for expansion 1) mtpy = million tonnes per year 13
    • Existing logistics – Large Competitive Advantage  Existing railway from mine to deep water port  MSEK 900 (MUSD 130) committed by government for refurbishment of railway  All year ice free port  Baby Cape/Panamax capacity  LoI signed with Oxelösund port 14
    • Integrated scaleable project Development in three phases 15
    • Low development risk  Scalable project  Experienced team  Existing mine infrastructure
    • Product price premium  High quality product  67% Fe Concentrate 17
    • High quality product Dannemora (lump) Dannemora (fines) Fortescue Cleveland Cliffs Rio Tinto Ferrexpo Kumba LKAB (pellets) Vale Nordic Iron Ore Northern Iron LKAB (fines) 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0% Northland Resources Kaunisvaara Comparison of average % Fe BHP NIO will produce high quality pellet fines (possibility to produce sinter fines), expected to yield premium pricing 18
    • Risk mitigation Construction risk and process risk greatly reduced due to: 1 Complete DFS before final investment decision 2 Experienced project management team 3 Detailed planning and close monitoring of schedule 4 Focus on cost control and follow up systems 5 Professional procurement with close monitoring of contractors 19
    • Risk mitigation – separate project organisation Project director Exploration Controller Procurement & quality Economy & finance Planning HSE Logistics CEO HR Blötberget Väsman Production Marketing and sales Environment Håksberg Skeppmora 20
    • Project development schedule - Key milestones Investment decision, Financing & Organisational build up Construction Phase 1 Installation & commissioning DFS-Phase 1 2013 2014 2015 2016 Beneficiation start & ramp up 2017-2021 Environmental permit B+H • Phase 1 Blötberget – viable stand alone project: • IRR 18% • Cash cost USD 47/dmt (FOB) • Pay back 4.3 years 21
    • Agenda   Introduction Investment highlights  Financial information  Conclusion 22
    • Attractive economics Exemple calculation at full production, USD/t Assumed long term price (62% Fe) Premium (67% Fe) Freight FOB OPEX* OH-cost Financing cost** Margin *During the first 2 years OPEX will be higher ** Financing cost should be lower after ≈ 5 years 120 +15 –24 111 -52 -1 -10 48
    • Capex incl DFS and production ramp-up (Pre financing cost and pre tax)     200 Second fund raise only after production start Phase I Revenue from Q3 2015 Gradual ramp up of logistics chain Large part of Capex financed internally - external need MUSD 306 For Phase Ia Phase I-III Internally financed coarse fines Concentrate Mt 4.00 150 3.00 100 4.2 3.5 77 126 119 50 0.5 72 25 2015 2016 2017 0.25 14 8 0 2.15 92 75 70 2014 2.00 2018 2019 2020 2021 2014 2016 2017 2018 1.00 1.4 0.6 2015 1.4 2019 2020 2021 0.00 24
    • Key figures       Targeting a 4.3 Mtpa operation OPEX 51.5 USD/t CAPEX to full production USD 678 million Pay back period ≈ 5.4 years NPV (@ 8.0%) USD 952million IRR 24%mine at
    • Agenda    Introduction Investment highlights Financial information  Conclusion 26
    • Conclusion 1 Large mineralization with expansion potential 2 High quality product 3 Low development risk 4 Very competitive OPEX and existing logistics 27
    • Thank you www.nordicironore.se