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 ex...
Nordic Iron Ore - Project Up date
Major Achievements 2013

 New Scoping study Ludvika Mines - double production capacity
...
Our targets
 Production 4.3 Mtpa
 Production start coarse fines:
Q3 2015
 Start new beneficiation plant
Q3 2016
 Conce...
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 mineralisatio...
One of Sweden’s largest iron mineralisations

Håksberg:
Indicated 25 mt @ 36%
Inferred 12 mt @ 36%

3

Väsmans South miner...
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...
Existing logistics – Large Competitive Advantage
 Existing railway from mine to deep
water port
 MSEK 900 (MUSD 130) com...
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 (...
Risk mitigation
Construction risk and process risk greatly reduced due to:
1

Complete DFS before final investment decisio...
Risk mitigation – separate project organisation
Project
director
Exploration
Controller

Procurement &
quality
Economy &
f...
Project development schedule
- Key milestones
Investment decision, Financing &
Organisational build up

Construction Phase...
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)
Frei...
Capex incl DFS and production ramp-up
(Pre financing cost and pre tax)





200

Second fund raise only after producti...
Key figures







Targeting a 4.3 Mtpa operation
OPEX 51.5 USD/t
CAPEX to full production USD 678 million
Pay back ...
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 co...
Thank you
www.nordicironore.se
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Europe’s next iron ore producer

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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

  1. 1. Europe’s next iron ore producer IntierraRMG - Mining on the Top – Stockholm 10th Anniversary Conference 26-27 Nov 2013 1
  2. 2. Agenda  Introduction    Investment highlights Financial information Conclusion 2
  3. 3. 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
  4. 4. 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
  5. 5. Our targets  Production 4.3 Mtpa  Production start coarse fines: Q3 2015  Start new beneficiation plant Q3 2016  Concentrate 67% Fe or better 5
  6. 6. Solid economics  IRR 24 per cent  Pay back period 5.4 years  At least 15 year life of mine 6
  7. 7. Competitive cost level Competitive cash cost and premium product Fortescue USD 76/dmt /NIO 7
  8. 8. Agenda  Introduction  Investment highlights   Financial information Conclusion 8
  9. 9. 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
  10. 10. 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
  11. 11. Expansion potential 75000 MagTot (nt) 65000 55000 Targeting mineral resources in excess of 300mt N S 11
  12. 12. Beneficiation plant next to existing railway 12
  13. 13. Processing plant and terminal in Skeppmora (Blötberget) Existing Rail Road: Bergslagsbanan Processing plant designed for expansion 1) mtpy = million tonnes per year 13
  14. 14. 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
  15. 15. Integrated scaleable project Development in three phases 15
  16. 16. Low development risk  Scalable project  Experienced team  Existing mine infrastructure
  17. 17. Product price premium  High quality product  67% Fe Concentrate 17
  18. 18. 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
  19. 19. 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
  20. 20. 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
  21. 21. 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
  22. 22. Agenda   Introduction Investment highlights  Financial information  Conclusion 22
  23. 23. 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
  24. 24. 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
  25. 25. 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
  26. 26. Agenda    Introduction Investment highlights Financial information  Conclusion 26
  27. 27. Conclusion 1 Large mineralization with expansion potential 2 High quality product 3 Low development risk 4 Very competitive OPEX and existing logistics 27
  28. 28. Thank you www.nordicironore.se
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