NORDIC MINES AB (publ) Interim report January- March 2013

A translation First quarter 2013 *        Net sales for gold and silver amounted to SEK 85.4 million (SEK 22.6 million), including a negative impact of gold hedging of SEK -13.5 million (SEK -5.1 million). *        The company recorded a loss of SEK -59.0 million (SEK -54.0 million) of which negative exchange rate translations of SEK -14.8 million. *        The period's loss after tax was SEK -45.7 million (SEK -63.0 million), including financial expenses of SEK -12...

A translation

  

First quarter 2013

*        Net sales for gold and silver amounted to SEK 85.4 million (SEK 22.6 million), including a negative impact of gold hedging of SEK -13.5 million (SEK -5.1 million).

*        The company recorded a loss of SEK -59.0 million (SEK -54.0 million) of which negative exchange rate translations of SEK -14.8 million.

*        The period's loss after tax was SEK -45.7 million (SEK -63.0 million), including financial expenses of SEK -12.9 million, corresponding to SEK -0.17 (SEK -1.77) per share.

*        The period's total result amounted to SEK -22.5 million (SEK -77.8 million), corresponding to SEK -0.08 (SEK -2.19) per share.

*        Cash and cash equivalents were SEK 149.7 million (SEK 15.3 million) at the end of the period.

*        Investments amounted to SEK 25.9 million (SEK 37.9 million), including a deposit of SEK 8.1 million.

*        In total 278 kilos of gold (130 kilos) was produced at the Laiva mine.

*        In January 2013 a preferential rights issue of SEK 282 million was made which was oversubscribed without having to utilize the warranties.

 

 

Post balance sheet events

*        In April the price of gold reduced substantially from a level of approximately USD 1,625 to USD 1,378 as a minimum. In connection with the lower price of gold, the company pre-settled its gold hedge agreement for the second quarter at a cost of EUR 150,000.

 

 

 

 

CEO Comments:

"The actions to ensure long-term profitability are progressing according to plan"

"The quarter started with a preferential rights issue of SEK 282 million before transaction costs, which was oversubscribed without having to utilize the warranties, which both I and all employees within Nordic Mines are satisfied with. The issue has enabled us to work with the action plan communicated in November 2012. A number of changes have been made in the processing plant and various improvement measures have been initiated," begins Thomas Cederborg, CEO.

 

In total approximately one third of the proceeds from the preferential rights issue of SEK 255 million after transaction costs have been used to pay for the gold price hedging agreement, interest rates and accounts payable related to the fourth quarter of 2012. One third intended for investments has been utilized to a certain extent. The extra feeder which will increase the plant's availability at the ore intake to the processing plant has been installed successfully during the quarter. The new crusher continues to be investigated. We are investigating different solutions and we want to ensure the best possible design before the investment decision is made. The remaining part of the preferential rights issue remains as liquidity.

 

In total 278 kilos of gold was produced during the first quarter. In January we encountered a series of unforeseen production stoppages with lower gold production as a result, and in February we had a planned maintenance stoppage for six days. In March, the initial efforts in accordance with the action plan started to have positive effects where the availability and the throughput increased.

 

 

 

Sales proceeds were SEK 85.4 million during the first quarter, which was SEK 9.0 million higher compared to the previous quarter, despite lower production of 7 kilos compared to the previous quarter. The reason is primarily a high opening balance of doré bars in stock. The company recorded a loss of SEK -59.0 million, compared to SEK -35.2 million in the previous quarter. The difference mainly depends on negative exchange losses in the first quarter of 2013 in comparison to the positive in the previous quarter.

 

 

"At the end of the quarter we saw improvements in terms of availability and throughput in the processing plant which has been our highest priority so far. We are also continuing intensively with increasing the gold grade into the plant. Extensive work is ongoing in the mine for optimization of the methods for drilling of the ore, blasting and hauling. We are still far from satisfied. Therefore, there is continuous full focus on the action plan to attain increased gold production," concludes Thomas Cederborg, CEO.

 

 

 

Note

Nordic Mines is required to publish this information by the Swedish Securities Markets Act and/or the Financial Instruments Trading Act. The information was published on Wednesday 8 May 2013 at 8 am CET.

 

 

For further information, please contact:

Thomas Cederborg, CEO, tel: +46 708 480 521

Susanne Andersson, CFO, tel: +46 730 668 904

[email protected]

 

 

 

 

 

 

 

 

 

 

 

Nordic Mines in brief

Nordic Mines is a Nordic mining and exploration company. Its goal is to be one of the leading gold producers in Europe and the Nordic region as well as a role model in respecting the environment. Gold production began in the Laiva mine in Finland at the end of 2011. The deposit is among the largest in the Nordic region. Exploration is being conducted in Finland and Sweden. Nordic Mines was founded in 2005 and has approximately 100 employees with head office in Uppsala. The Nordic Mines share is traded on the Nasdaq OMX Small Cap exchange in Stockholm. Also refer to www.nordicmines.com

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