Nordic Iron Ore Ab · OMXSTO:NIO

Nordic Iron Ore Ab — Informa 8th EU Iron Ore 2013

38 slides from Nordic Iron Ore Ab's conference presentation, Oct 1, 2013

  1. Slide 1: Nordic Iron Ore – Company Presentation

    Nordic Iron Ore – Company Presentation The Rejuvenation of the Ludvika Iron Ore Mines – Europe’s next iron ore producer Informa 8th EU Iron Ore Paris, 1-2nd October 2013 1

  2. Slide 2: Agenda

    Agenda  Introduction  Investment highlights  Project time plan  Financial information  Conclusion 2

  3. Slide 3: What defines a good iron ore project?

    What defines a good iron ore project?  Access to cost effective logistics solutions, - ie railway direct to deep sea port  Low operating costs – Under USD 60 /dmt FOB  Low capital intensity – <USD 200/annual tonne production  Nearby markets  Easily beneficiated ore  High quality product >62%Fe

  4. Slide 4: Nordic Iron Ore at a glance

    Nordic Iron Ore at a glance  Restarting Ludvika Mines – Blötberget – mining concession granted • Phase 1 Feasibility study • Environmental permit expected Q4 2013 – Väsman field – under further exploration • Mine concession application submitted 2014 • Environmental permit application 2015 – Håksbe

  5. Slide 5: Our targets

    Our targets  Production 4.3 Mtpa  Production start coarse fines: Q3 2014  Start new beneficiation plant Q3 2016  Concentrate 67% Fe or better 5

  6. Slide 6: Solid economics

    Solid economics  IRR 25 per cent  Pay back period 4.5 years  At least 15 year life of mine 6

  7. Slide 7: Investment highlights

    Agenda  Introduction  Investment highlights  Project time plan  Financial information  Conclusion 7

  8. Slide 8: One of Sweden’s largest iron mineralisations (Swedish)

    One of Sweden’s largest iron mineralisations Håksberg: Indikerat 25 mt @ 36% Antagen 12 mt @ 36% Väsmans syd mineralisering: Indikerat 7 mt @ 39% Antagen 86 mt @ 38% Blötberget : Indikerat 30 mt @ 45% Antagen 10 mt @ 43% 8

  9. Slide 9: One of Sweden’s largest iron mineralisations

    One of Sweden’s largest iron mineralisations Håksberg: 3 Indicated 25 Mt @ 36% Inferred 12 Mt @ 36% Väsman: South mineralisation: Indicated 7 Mt @ 39% Inferred 86 Mt @ 38% Blötberget: Indicated 30 Mt @ 45% Inferred 10 Mt @ 43% 9

  10. Slide 10: Expansion potential

    Expansion potential 75000 MagTot (nt) 65000 55000 Targeting mineral resources in excess of 300Mt N S 10

  11. Slide 11: Beneficiation plant next to existing railway

    Beneficiation plant next to existing railway 11

  12. Slide 12: Integrated expansion of project to 4.3Mt/y

    Integrated expansion of project to 4.3Mt/y Development in three phases 12

  13. Slide 13: Product price premium

    Product price premium  High quality products  Fines  Concentrate  67% Fe Concentrate 13

  14. Slide 14: High quality product

    High quality product NIO will produce high quality pellet feed concentrates (possibility to produce sinter fines), expected to Comparison of average % Fe yield premium pricing 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0% Resources Fortescue Dannemora (fines) Kumba Cleveland Cliffs BHP Northern Iron Va

  15. Slide 15: Competitive cost level

    Competitive cost level Competitive cash cost and premium product USD 76/dmt 51 /NIO 15

  16. Slide 16: Competitive cash costs to European market – upside potential

    Competative cash costs to European market – upside potential USD 59/dmt CFR Rotterdam / Nordic Iron Ore AB 16

  17. Slide 17: Low development risk

    Low development risk  Scaleable project  Experienced management team  Existing mine infrastructure  Reduced CAPEX  Reduced development time  Ground pre-prepared for extraction  Incremental development  Existing competitive logistics solution to deep-water port

  18. Slide 18: Existing logistics – competitive OPEX

    Existing logistics – competitive OPEX  Existing railway from mine to deep water port  MSEK 900 (MUSD 130) committed by Swedish government for refurbishment of railway  All year ice free port  Baby Cape/Panamax capacity  LoI signed with Oxelösund port 18

  19. Slide 19: Project time plan

    Agenda  Introduction  Investment highlights  Project time plan  Financial information  Conclusion 19

  20. Slide 20: Initial phase (2010-2012)

    Initial phase (2010-2012)  Organisation, management team & BoD Funding:  Two mining concessions granted  PEA/Scoping study MSEK 98  Environmental permit application (MUSD 15) 20

  21. Slide 21: Current phase (2013)

    Current phase (2013)  Resource expansion and infill drilling Funding:  Beneficiation tests and process layout SEK 50 million  DFS Phase I (MUSD 7.5)  Exploratory talks with market for off-take agreements 21

  22. Slide 22: Construction Phase I (2014-2015)

    Construction Phase I (2014-2015)  Mining concession application Väsman Funding:  Environmental permit application Väsman MSEK 2 000  Preparation for construction phase – Dewatering Blötberget (MUSD 300) – New entrance tunnel  Production start Phase Ia 22

  23. Slide 23: Construction Phase I (2014-2015) cont.

    Construction Phase I (2014-2015) cont.  Construction project build up  Construction of plant with first production line and rail terminal • Off-take agreements (preferred with finance) • Complete feasibility study - Phase II 23

  24. Slide 24: Construction Phase II (2016-2017)

    Construction Phase II (2016-2017)  Organizational build up  Development of Väsman Funding: MSEK 700  Complete production line 1 - commission (MUSD 100)  Production start and ramp-up  Construction of production line 2  Commissioning process line 2 24

  25. Slide 25: Construction phase III (2018-2019)

    Construction phase III (2018-2019)  Mine development of N Väsman & S Håksberg  Production ramp-up  Construction of production line 3  Commission production line 3 25

  26. Slide 26: Risk mitigation

    Risk mitigation Construction and process risk greatly reduced due to: 1 Complete DFS before final investment decision 2 Experienced project management team, supported by strong engineering and mine development functions 3 Detailed planning and close monitoring of schedule 4 Focus on cost control and

  27. Slide 27: Risk mitigation – separate project organisation

    Risk mitigation – separate project organisation Project director Exploration Procurement & Controller quality Production Economy & finance Planning HSE CEO Logistics HR Marketing and sales Blötberget Väsman Environment Håksberg Skeppmora 27

  28. Slide 28: Project development schedule

    Project development schedule -- Key milestones Investment decision & start of early production Construction, Beneficiation start DFS-Phase I Installation & commissioning & ramp up 2013 2014 2015 2016 2017-2019 Environmental permit B+H Environmental permit V Mining concession V Permits/concessions re

  29. Slide 29: Management and board

    Management and board Management Christer Lindqvist Lennart Eliasson Hans Thorshag Louise Sjögren Paul Marsden CEO CFO Technical Director Chief Geologist Sales and Marketing Board of directors  Broad mix of skills, knowledge and experience  Board is incentivised through stocks and options 29

  30. Slide 30: Financial information

    Agenda  Introduction  Investment highlights  Project time plan  Financial information  Conclusion 30

  31. Slide 31: Attractive economics

    Attractive economics Example calculation at full production, USD/t Assumed long term price (62% Fe) 120 Premium (67% Fe) +15 Freight –24 FOB 111 OPEX* -52 OH-cost -1 Financing cost** -10 Margin 48 *During the first 2 years OPEX will be higher ** Financing cost will be lower after ≈ 5 years

  32. Slide 32: CAPEX- three phases overview and schedule

    CAPEX- three phases overview and schedule 10% MUSD 671 to full production 4% 5% 38% 200 42% 152 Mining Benefication Transport & Logistics Infrastructure & Buildings 138 Administration 128 100 95 87 Studies = 23 71 Phase III=168 Phase II =182 Phase I = 298 0 2014 2015 2016 2017 2018 2019 32

  33. Slide 33: Capex and production ramp-up

    Capex and production ramp-up  Staged mine development brings down risk  Revenue from Q3 2014  Gradual ramp up of logistics chain  Part of Capex financed internally 200 Chart Title 4.00 150 20 3.00 100 4.3 152 3.6 2.00 70 128 118 50 2.5 71 87 0.5 1.9 1.00 25 0.5 0.6 0.2 0 0.00 2014 2015 2016 2017

  34. Slide 34: Funding strategy

    Funding strategy Financing steps, MUSD Funds raised = MSEK 98 (approx. MUSD 14) ≈ 300 300 Investments will be financed approx. 50/50 debt/ equity IPO planned in connection with funding of investment 200 Second raise for phase II and III after start of production Phase I IPO ≈ 100 100 1,5 3,2 8,6 7,5

  35. Slide 35: Key figures

    Key figures  Targeting a 4.3 Mtpa operation  OPEX 51.5 USD/t  CAPEX to full production USD 671 million  Pay back period ≈ 4.5 years  NPV (@ 8.0%) USD 1,024 million  IRR 25%mine at

  36. Slide 36: Conclusion

    Agenda  Introduction  Investment highlights  Project time plan  Financial information  Conclusion 36

  37. Slide 37: Conclusion

    Conclusion 1 Low development risk Opportunity to capitalise 2 on sunk capital Existing Logistics 3 solution 4 High quality product Very competitive OPEX 5 with upside potential Large mineralization with 6 expansion potential 37

  38. Slide 38: Thank you

    Thank you www.nordicironore.se

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