Nordic Iron Ore Ab · OMXSTO:NIO

Nordic Iron Ore Ab — Investor Presentation (March 2014)

38 slides from Nordic Iron Ore Ab's investor presentation, March 2014

  1. Slide 1: Investor presentation – Europe's next iron ore producer

    Investor presentation – Europe’s next iron ore producer March 2014 1

  2. Slide 2: Disclaimer

    Disclaimer This document has been produced by Nordic Iron Ore AB (publ) (the “Company”) . The Company is planning to make an offering of shares in the Company by way of a private placement. This document does not constitute or form part of, and should not be construed as, an offer for sale or subscr

  3. Slide 3: Agenda

    Agenda  Introduction  Investment highlights  Project time development  Financial information 3

  4. Slide 4: What defines a good iron ore project?

    What defines a good iron ore project?  Access to railway direct to deep sea port  Easily beneficiated ore  Large iron resources  Low operating costs – Around 50 USD/dmt 62% Fe, FOB  Low capital intensity – <150 USD/annual tonne production, 62% Fe  Scaleability 4

  5. Slide 5: Nordic Iron Ore at a glance

    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 sho

  6. Slide 6: Project Update: Major Achievements 2013

    Nordic Iron Ore - Project Up date Major Achievements 2013  New Scoping study Ludvika Mines - double production capacity  Definite Feasibility Study - Phase 1 Blötberget commenced  State Investment Fund - Inlandsinnovation new financier  Increase in mineral resources + 280%  LoI Oxelösund Port –

  7. Slide 7: Our targets

    Our targets  Production 4.3 Mtpa  Production start coarse fines: Q4 2015  Commissioning new beneficiation plant Q4 2016  Concentrate 67% Fe or better 7

  8. Slide 8: Solid economics

    Solid economics  IRR 23 % (unleveraged)  Pay back period 5.5 years  At least 15 year life of mine 8

  9. Slide 9: Agenda – Investment highlights

    Agenda  Introduction  Investment highlights  Project time development  Financial information 9

  10. Slide 10: One of Sweden's largest mineralisations

    One of Sweden’s largest mineralisations Håksberg: Indicated 25 mt @ 36% Inferred 12 mt @ 36% Väsmans syd mineralisation: Indicated 7 mt @ 39% Inferred 86 mt @ 38% Blötberget : Indicated 30 mt @ 45% Inferred 10 mt @ 43% 10

  11. Slide 11: One of Sweden's largest iron mineralisations

    One of Sweden’s largest iron mineralisations Håksberg: 3 Indicated 25 Mt @ 36% Inferred 12 Mt @ 36% Väsmans South mineralisation: Indicated 7 Mt @ 39% Inferred 86 Mt @ 38% Blötberget *: Measured 11 Mt @ 35% Indicated 27 Mt @ 45% Inferred 21 Mt @ 33% * Preliminary technical report (JORC) 11

  12. Slide 12: Expansion potential

    Expansion potential 75000 MagTot (nt) 65000 55000 Targeting mineral resources in excess of 300mt N S 12

  13. Slide 13: Beneficiation plant next to existing railway

    Beneficiation plant next to existing railway 13

  14. Slide 14: Integrated scaleable project

    Integrated scaleable project Development in three phases 14

  15. Slide 15: Product price premium

    Product price premium  High quality product  67% Fe Concentrate 15

  16. Slide 16: High quality product

    High quality product NIO will produce high quality pellet fines (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 Vale Dannemora

  17. Slide 17: Competitive cost level

    Competitive cost level Competitive cash cost and premium product USD 76/dmt /NIO 17

  18. Slide 18: Low development risk

    Low development risk  Existing logistics  Existing mine infrastructure  Existing services  Scaleable project  Experienced team

  19. Slide 19: Existing logistics – competitive OPEX

    Existing logistics – competitive OPEX  Existing railway from mine to deep water port  MSEK 450 (MUSD 65) committed by government for refurbishment of railway  All year ice free port  Baby Cape/Panamax capacity  LoI signed with Oxelösund port 19

  20. Slide 20: Summary: main project characteristics

    Summary: main project characteristics 1 Large mineralization with expansion potential 2 High quality product 3 Low development risk 4 Very competitive OPEX and existing logistics 20

  21. Slide 21: Agenda – Project development

    Agenda  Introduction  Investment highlights  Project development  Financial information 21

  22. Slide 22: 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) 22

  23. Slide 23: Current phase (2013/14)

    Current phase (2013/14)  Expansion and infill drilling Funding:  Beneficiation tests and process layout MSEK 70  DFS Phase I (MUSD 11)  Preparation for IPO 23

  24. Slide 24: Construction Phase I (2014-2016)

    Construction Phase I (2014-2016)  Mining concession application Väsman Funding:  Environmental permit application Väsman MSEK 2 400  Preparation for construction phase – Dewatering Blötberget (MUSD 350) – New entrance tunnel  Production start Phase 1a 24

  25. Slide 25: Construction Phase I (2014-2016) cont.

    Construction Phase I (2014-2016) cont.  Construction project build up  Construction of plant with first production line and rail terminal • Off-take agreements • Feasibility study Phase II 25

  26. Slide 26: Construction Phase II (2017-2019)

    Construction Phase II (2017-2019)  Organizational build up Funding:  Production start and ramp-up MSEK 350  Construction of production line 2 (MUSD 50)  Commissioning of line 2 26

  27. Slide 27: Construction Phase III (2020-2021)

    Construction Phase III (2020-2021)  Mine development  Production ramp-up  Construction of production line 3  Commission production line 3 27

  28. Slide 28: Risk mitigation

    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 mo

  29. Slide 29: 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 29

  30. Slide 30: Project development schedule

    Project development schedule -- Key milestones Investment decision, Financing & Organisational build up Construction Phase 1 Beneficiation start DFS-Phase 1 Installation & commissioning & ramp up 2013 2014 2015 2016 2017-2021 Environmental permit IPO B+H 30

  31. Slide 31: 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 stock ownership 31

  32. Slide 32: Agenda – Financial information

    Agenda  Introduction  Investment highlights  Project development  Financial information 32

  33. Slide 33: Attractive economics

    Attractive economics Exemple 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 ramp up periods OPEX will be higher, but Phase 1 has an OPEX of only 46.6 USD/tonne ** Fina

  34. Slide 34: CAPEX – three phases overview and schedule

    CAPEX- three phases overview and schedule 10% MUSD 678 to full production 4% 5% 38% 200 42% 152 Mining Benefication 138 Transport & Logistics Infrastructure & Buildings Administration 128 102 100 87 Studies = 30 71 Phase III=167 Phase II =182 Phase I = 298 0 2014/15 2015/16 2016/17 2017/18 2018/19 2

  35. Slide 35: Capex incl DFS and production ramp-up, Base case

    Capex incl DFS and production ramp-up, Base case (Pre financing cost and pre tax)  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 325 200 For Phase Ia Phase I-III Intern

  36. Slide 36: Key figures (Phase 1)

    Key figures (Phase 1)  Targeting a 1.43 Mtpa operation  OPEX 46.6 USD/t  CAPEX to full production USD 298 million  Pay back period ≈ 4.5 years  NPV (@ 8.0%) USD 186 million  Project IRR 17%, (unleveraged)mine at 36

  37. Slide 37: Key figures (All Phases)

    Key figures (All Phases)  Targeting a 4.3 Mtpa operation  OPEX 51.5 USD/t  CAPEX to full production USD 678 million  Pay back period ≈ 5.5 years  NPV (@ 8.0%) USD 934 million  Project IRR 23%, (unleveraged)mine at 37

  38. Slide 38: Thank you

    Thank you www.nordicironore.se

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