Interim Report January - September 2022

Significant events during the third quarter 2022

Third quarter, 1 July – 30 September 2022

Interim period, 1 January – 30 September 2022

Significant events after the end of the period

Comments from the CEO:

Continued negotiations with Cargill and increased pace of preparations

The work in the company has during the quarter has largely been characterized by the ongoing negotiations with Cargill, a work which has been intensified after the holiday period. Our ambition is to conclude the negotiations as quickly as possible, but as a matter of fact this is a multi-faceted negotiation regarding, for example, offtake, investment and strategic cooperation, and it takes its time. As soon as we have an outcome from the negotiations, the outcome will be communicated to the market.

In addition to the negotiations with Cargill, renewed and repeated contacts have been made with potential suppliers in order partly to obtain updated tenders and quotations, partly to validate previous assumptions. The information also constitutes valid basis from which we can proceed in the next phase when we start to establish mining operations in Blötberget.

Blötberget, when the re-establishment is completed, will produce approximately 1,600,000 tons of iron ore concentrate per year with an average iron content close to 69%, one of the highest on the market. We get strong signals that such a product, characterized by its high quality, the proportion of magnetite and the low concentration of harmful elements, would be well received by the steel industry. This is due to that the product will be very suitable for reducing the CO₂ intensity throughout the steel supply chain.

In addition to the more practical work with the negotiations and preparations for the launch of the project, we have worked to strengthen our market communication through participation in various forums aimed at investors in the mining sector. In addition, we have had initial discussions with investors and lending institutions for future financing of the project up to operation. The feeling is that there is initial interest and that long-term financing of the business up to operation and own positive cash flow should be possible after signing an offtake agreement with Cargill, another corresponding party or with a steel manufacturer.

Although plans for a new organizational structure for both the project and future mining operations have become clearer, we have chosen to proceed with caution. We have not yet started active recruitment, all in order not to risk to increase the cost level before it is necessary. In the short term, the company's operations continue to be financed through the bridge loans provided by major shareholders. There is a continuous monitoring of the liquidity situation in the company and dialogue with the lenders so that the company has access to the liquidity required to run the business.

The iron ore market has been pressured by the continued war in Ukraine and the high rate of inflation, which has meant that several central banks around the world have raised their respective policy rates. This, in turn, has contributed to an increased fear of a global recession. The demand for steel has decreased both in China and elsewhere in the world, and thus the demand for iron ore has also decreased. Although the climate transition in the steel industry is proceeding at a rapid pace, this has not yet fully taken effect in terms of the demand for high-quality iron ores. In the short term, this is mainly because a lower steel production reduces the total carbon dioxide emissions, even if lower quality iron ores are used. This is likely to be a temporary situation and the demand for high-quality iron ore products is expected to recover. Another explanation is that the large ongoing investments to implement the technology shift to green steel production are not yet in production on a large scale.

It is worth noting that despite the depressed iron ore market, the average price during the quarter was above the price used in our profitability studies, i.e. despite the current negative market climate, the calculations continue to show a profitable operation for Blötberget.

Ronne Hamerslag
Chief Executive Officer
Nordic Iron Ore AB (publ)

For more information contact:

Ronne Hamerslag
Chief Executive Officer
Telephone: +46 (0)240 88 301
E-mail: ronne.hamerslag@nordicironore.se

Nordic Iron Ore Group is a mining company with the ambition to revive and develop the iron ore production of Ludvika Mines in Blötberget and Håksberg. The company also intends to expand its mineral resources, and upgrade them to ore reserves, primarily through exploration and other studies of the connecting Väsman field. The Company has all the necessary permits in place for the mine in Blötberget and will be able to produce iron ore of extremely high quality.

For more information, see www.nordicironore.se.

Nordic Iron Ore’s shares and warrants are listed at Nasdaq First North Growth Market. Wildeco is the company’s Certified Adviser (info@wildeco.se tel +46-8-545 271 00).

This information is required and provided by Nordic Iron Ore AB (publ) under the EU Market Abuse Regulation. The information was provided through the agency of the contact person set out above for publication at the date and time set above.


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