Northland Operational Update-March 2012
LUXEMBOURG, LUXEMBOURG -- (Marketwire) -- 03/19/12 -- Northland Resources S.A. (TSX: NAU)(FRANKFURT: NPK)(OSLO: NAUR) ("Northland" or the "Company") advises that the Company will initiate a bi-monthly operational and construction update on its Kaunisvaara project.
"This is the first in a series of updates that Northland plans to provide on progress of the Kaunisvaara project," said Karl-Axel Waplan, President and CEO of Northland Resources S.A. "This is in line with our plan to keep the market updated with the latest developments and will be in additional to our quarterly reports. Following the successful settlement of our equity and bond offering, of a total of USD 675 million, we are now focused on the ongoing construction of the Kaunisvaara project and the goal to start production at the Tapuli mine in the fourth quarter of 2012. I am very pleased that Northland is able to maintain the strong momentum with the Kaunisvaara project, which is indicative of our committed staff that has made this possible."
-- The schedule for Kaunisvaara remains unchanged with the start of
production from the Tapuli Mine during fourth quarter of 2012 and with
shipments in first quarter of 2013.
-- The project including Tapuli, construction, partial mining equipment and
ship loader, was at the end of February 46% complete.
-- Following the decision to organize the logistics as wholly-owned
entities and to focus on the Tapuli mine, the overall project was at the
end of February 27% complete.
-- Construction of the transshipment terminal in Pitkajarvi has commenced.
-- Construction of the Fagernes Terminal in Narvik Port started mid-January
2012 and remains on schedule. The initial piling work has been
successful.
-- Ship loader has been ordered and will be fully operational in third
quarter of 2013. A preliminary loading solution is being planned and
will utilize existing dock facilities. Shipment will be possible as
planned in the beginning of 2013.
-- Per the end of February, Northland had committed USD 803 million of
Capex for its Kaunisvaara project and the Value of Work done was USD 263
million.
Conference Call
On Wednesday March 21, 2012, Northland will host a webcast presentation and conference call to discuss the details of the Operational Update. The presentation is scheduled to begin at 4.00 p.m. Central European Time / 11.00 a.m. Eastern Daylight Time / 9 a.m. Pacific Time Standard Time and will be chaired by Karl-Axel Waplan, Chief Executive Officer.
A link to the live audio webcast of the conference call, together with supporting presentation slides, will be available on the corporate website, http://www.northland.eu/en-us/investor-relations.
Please call about five minutes before the advertised starting time to access the conference call.
Call-in details:
US/Canada: +1 866 458 4087
Norway: +47 21 51 11 88
Sweden: +46 (0)8 505 598 53
United Kingdom: +44 (0)203 043 24 36
To view Graph please click on the following link: http://media3.marketwire.com/docs/NAU0319a.pdf
Kaunisvaara
Progress at the Kaunisvaara mine site is continuing according to the time plan. More than 148,000 m3 of the Tapuli overburden has been removed so far, and the current average rate is 120,000 m3 per week. Construction of foundation for the primary crusher for the Tapuli ore is ongoing and is on schedule to be ready at the time the crusher is delivered. Construction of the ors sheds are also progressing well.
All external panels are now mounted on the process plant and the work is concentrated on the internal design, including foundations for the autogenous grinding mills, as well as the secondary mills (Vertimills). These and other key equipment from Metso are expected to be delivered starting second quarter 2012 and are on time. The main items include crusher and mills from Metso.
The work on the excavation and construction for the 130 kV power lines to the site is now focused on the installations of pylons. Work is slightly ahead of program. The construction work of the building for the electrical switch-gear was commissioned and work will start beginning of April 2012.
Starting second quarter of 2012, Northland will receive Caterpillar mining equipment. An agreement for the ongoing maintenance and repair of the mobile mining equipment for the Kaunisvaara project is expected to be signed beginning of the second quarter of 2012.
Northland is in receipt of all necessary exploitation concession and environmental permits required in order to carry out the first phase of the Kaunisvaara project. The first phase will comprise the construction of the necessary phase to ensure the extraction and processing of iron ore and to produce iron ore concentrate from the Tapuli mine.
Logistics
The current logistics solution includes truck transportation from Kaunisvaara to Pitkajarvi for reloading to railway wagons, rail transportation from Pitkajarvi to Narvik on the railway track "Malmbanan" and the use of Fagernes Terminal in Narvik.
Two wholly-owned logistics companies, Northland Logistics AB and Northland Logistics AS, have been established. Service contracts with logistic providers to operate overall logistics planning, trucking and port management to be finalized during second quarter of 2012.
Test for dispensation of 90 tonnes truck is ongoing in cooperation with the Swedish Transport Authority ("STA"). Field studies of the roads are carried out by the engineering consultant Vectura.
Finalized land procurement and land rental for the reloading terminal in Pitkajarvi. Peab and STA are engaged for the construction works. Construction works started March 6, 2012. Building permit application for erection works has been filed with Kiruna Municipality.
The engineering company Norconsult was engaged for Fagernes Terminal design and project support. The jetty design was finalized and construction is ongoing. The terminal construction work is progressing according to original time schedule.
Contracts
The total value of commitments made during February 2012 amounted to USD 7 million. The largest commitments during the period are Peab's construction work in Narvik and Kaunisvaara.
Finances
A revision of the Capital expenditures ("Capex") was carried out in January 2012 in order to reach 4.4 million dmt per annum capacity at end of 2014. The estimated Capex is USD 875 million, adjusted for revised exchange rates and additional contingency. The increase compared to the Capex of USD 765 million as presented in the DFS May 2011 is to be referred mainly to the inclusion of the logistics solution.
The revised operational expenditures ("Opex") following the update in January 2012 for the Life of Mine operation is estimated to be USD 55.6 per tonne of concentrate (dry) delivered Free on board ("FOB") to the Port of Narvik, Norway. Out of the 40% of the costs are related to transportation, of which two thirds is for trucking, see further details below.
To view Pie Chart please click on the following link: http://media3.marketwire.com/docs/NAU0319b.pdf
Pellivuoma
A third iron deposit, Pellivuoma, is located approximately 18 km west of Kaunisvaara. It is a fully-owned asset of Northland. Long term, the Company plans to develop this deposit to extend the Kaunisvaara project's Life of Mine ("LOM") materially, or increase the production or a combination thereof.
A DFS is ongoing, expected to be published end of second quarter of 2012.
Other matters
To be able to have all key staff in place at the start of production, Northland launched an ad campaign in mid-March. In this initial recruitment phase, the Company will recruit around 100 employees for various positions. Already before the ad campaign kicked off for the recruitment process around 3,000 job applications were received.
Next Operational Update
The Operational Update - May 2012 will be published on May 22, 2012.
Photos
To view Photos please click on the following link: http://media3.marketwire.com/docs/NAU0319c.pdf
Additional photos and video clips are available on Northland's website, www.northland.eu.
Corporate, January 1 - March 15, 2012
March 7, 2012: Northland Completes USD 350 million offering of Senior Secured Bonds - The Company announces that its subsidiary Northland Resources AB (publ) has completed the offering of senior secured bonds in an amount equivalent to USD 350 million.
March 7, 2012: Northland streamlines its management structure ahead of production start-up in Kaunisvaara - The Company has decided to change its management organization by appointing a Chief Operating Officer.
February 24, 2012: Northland Publish the Listing Prospectus - The Company has published a listing prospectus, available at the Company's webpage.
February 23, 2012: Northland Completes USD 325 Million Offering of Shares - The Company is pleased to announce that it has completed its previously announced offering of new shares of the Company for the equivalent of approximately USD 325 million.
February 16, 2012: Northland Announces the Successful Subscription of Bond Offering and Equity Offering - The Company is pleased to announce that it has closed the Equity Offering for the equivalent of USD 325 million at a price equal to NOK 6.50 per share and the Bond Offering equivalent to USD 350 million.
February 15, 2012: Northland Announces fully subscribed Bond Offering and re-launch of fully subscribed Equity Offering - The Company is pleased to announce that the Company has received subscriptions for USD 350 million in its senior secured bond offering and re-launch of an equity offering equivalent to USD 325-330 million, and together with the Bond Offering.
February 10, 2012: Northland Announces Full Subscription of the Equity Offering - The Company is pleased to announce that the equity offering of the equivalent of minimum USD 225 million and maximum USD 250 million, previously announced on February 2, 2012, has been significantly oversubscribed.
February 9, 2012: Northland publishes its Audited Financial Statements and MD&A for the Fiscal Year ended December 31, 2011, including Q4 results.
Complete press releases are available on www.northland.eu.
Karl-Axel Waplan, President & CEO, Northland Resources S.A.
Northland is a development-stage mining company with a portfolio of iron ore projects in northern Sweden and Finland. The Company's Kaunisvaara Project will exploit two magnetite iron ore deposits in Sweden. The process is expected to yield a high-grade, high-quality magnetite iron concentrate. The construction of the Kaunisvaara project is well underway and production is planned to start in the fourth quarter of 2012. Northland has entered into industrial off-take contracts for the entire production from Kaunisvaara. The Company is also preparing a Definitive Feasibility Study for its Hannukainen Iron Oxide Copper Gold Project in Kolari, northern Finland. The results of the study are expected to be released towards the end of the first quarter of 2012.
Important Notice
Forward-Looking Statements
This announcement may include "forward-looking" statements within the meaning of applicable securities laws. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are expectations concerning, among other things, Northland's results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which it operates. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Readers are cautioned that forward-looking statements are not guarantees of future performance and that Northland's actual results of operations, financial condition and liquidity, and the development of the industry in which it operates may differ materially from those made in or suggested by the forward-looking statements contained in this press release. In addition, even if Northland's results of operations, financial condition and liquidity, and the development of the industry in which Northland operates are consistent with the forward-looking statements contained in this press release, those results or developments may not be indicative of results or developments in subsequent periods.
Contacts:
Northland Resources S.A.
Karl-Axel Waplan
President and CEO
+46 705 104 239
Northland Resources S.A.
Peder Zetterberg
Acting CFO
+46 708 652 120
Northland Resources S.A.
Anders Antonsson
Vice President - Investor Relations
+46 709 994 970
Northland Resources S.A.
Marguerite Manshreck-Head
Investors Relations, Canada
+1 647 224 7882
www.northland.eu
