NORDIC MINES AB (publ) Year-end Report January December 2014

Transcription

1 NORDIC MINES AB (publ) Year-end Report January December 2014 The English text is an unofficial translation of the Swedish original and in case of any discrepancies between the Swedish text and the English translation, the Swedish text shall prevail. This is not a legal document. Fourth quarter 2014 Net income was SEK 0.0 million (SEK 68.2 million) due to the production stop at the Laiva mine. Due to the production stop, the Company reported an operating loss of SEK million (SEK million due to significant write-downs during the fourth quarter of 2013). Profit after tax for the period amounted to SEK million (SEK million), corresponding to SEK (SEK -1.77) per share. Comprehensive income for the period amounted to SEK million (SEK million), corresponding to SEK (SEK -1.82) per share. Cash and cash equivalents were SEK 83.2 million (SEK million, 30 September 2014) at the end of the period. Equity was SEK million (SEK million, 30 September 2014) at the end of the period. As Nordic Mines decided to stop production at the Laiva mine until further notice, no ore was processed during the period. In order to achieve the overall goal of Nordic Mines to restart operations at the Laiva mine in a manner that creates conditions for profitable mining, the Company has implemented a number of measures during the period. These measures include, among other things, that the Company, in accordance with a previously disclosed schedule, delivered in January an indicative, updated action plan and an updated financial model to the Company's lenders for approval. The Company s lenders have since invited Nordic Mines to continue to discuss the action plan and the restart of operations at the Laiva Mine. Nordic Mines is now progressing in its planning and evaluating a number of alternatives to strengthen the Laiva project operationally and financially. The Company is evaluating various partnerships for the refinement process and possible structural transactions within the Nordic gold mining industry. Nordic Mines is also evaluating different alternatives for creating more financial flexibility once operations are restarted, for example through the pre-sale of gold production and gold deliveries, supplier terms and conditions or other types of bridge financing for working capital. During the fourth quarter of 2014, SRK Consulting (UK) Limited (SRK), an independent mining consultancy company, re-calculated the mineral resources in Laiva. As communicated previously, Nordic Mines intends to publish the updated calculation of the mineral resources in February 2015, and the goal is then in March 2015 to complete and via a press release present a final, updated action plan that the Company has prepared in collaboration with SRK. January December 2014 Net income was only SEK 62.9 million (SEK million) due to the production stop at the Laiva mine as of the second quarter. The Company reported an operating profit of SEK million (SEK million) due to the significant debt write-downs. Profit after tax for the period amounted to SEK million (SEK million), corresponding to SEK 0.07 (SEK -2.22) per share. Comprehensive income for the period amounted to SEK million (SEK million), corresponding to SEK 0.06 (SEK -1.93) per share. Cash and cash equivalents were SEK 83.2 million (SEK million, 30 September 2014) at the end of the period. Equity was SEK million (SEK million, 30 September 2014) at the end of the period. Comments by CEO Thomas Cederborg The overall goal of Nordic Mines is to restart operations at the Laiva mine in a manner that creates conditions for profitable mining. We are now in the final stages of updating and thoroughly verifying the action plan that Nordic Mines previously prepared in collaboration with the well-respected international mining consultancy company, SRK Consulting (UK). The updated action plan is based on a geological model and mineral resources that have been updated by SRK and focuses on an improved mining method and capacity expansion in the processing plant adjacent to the mine. The Company has set a goal to present via a press release the updated mineral resources Nordic Mines Year-end Report January December (19)

2 before the end of February 2015 and a final, updated action plan in March 2015, says the CEO of Nordic Mines, Thomas Cederborg, in a statement. We are also evaluating possibilities to strengthen the Laiva project through partnerships and structural transactions with other actors in the Nordic gold mining industry. Nordic Mines believes that gold concentrate from several Nordic gold projects could be refined in the Nordic Mines processing plant, thereby processing the final product all the way from gold concentrate to doré bars and subsequently improving profitability. There are even clear synergies in the form of purchasing optimisation and streamlined administration. Finally, the falling price of gold, which has been the trend for the past few years, has reached a point where a number of interesting structural transactions may now occur, concludes Thomas Cederborg. Operations at the Laiva mine during the fourth quarter of 2014 In March 2014, Nordic Mines entered into codetermination negotiations with representatives for the employees at the Laiva mine to realise additional cost savings. The negotiations resulted in the lay-off of employees at the mine and plant and a production stop was implemented until further notice. The production stop, which initially applied until the external financing required to restart operations had been secured, has not been lifted yet (for more information please refer to Planning to restart operations at the Laiva mine below). Up until the production stop, the Company continued processing ore from a previously mined ore layer. Due to the production stop, no ore was processed during the fourth quarter. As of 31 December 2014, Nordic Mines had 77 employees in Sweden and Finland, of which the majority have been laid off in conjunction with the codetermination negotiations described above. As of 18 February 2015, no accidents had occurred at the Laiva mine over the past 365 days. Planning to restart operations at the Laiva mine The overall goal of Nordic Mines is to restart operations at the Laiva mine in a manner that creates conditions for profitable mining. Following the conclusion of the reorganisations for the Group's companies in Finland and Sweden, an intensive planning project is now underway for the restart. The planning project includes the update and thorough verification of the action plan that Nordic Mines previously prepared in collaboration with the well-respected international mining consultancy company, SRK Consulting (UK) Limited. The updated action plan is based on mineral resources and a geological model that has been updated by SRK and focuses on an improved mining method and capacity expansion in the process plant adjacent to the mine. In conjunction with the conclusion of the reorganisations in which the Company and some of its subsidiaries were involved, Nordic Mines entered into an agreement for significant write-downs to existing debt and in general modified loan conditions under the project financing agreement signed with the Company's lenders and which is described in more detail in the Company's supplementary prospectus dated 14 August Under this agreement, Nordic Mines undertook to report to the Company's lenders by a specified date a start-up plan (consisting of the updated action plan mentioned above) and an updated financial model for the Laiva mine, which must also be approved by the Company's lenders. In order to ensure the accuracy of and minimise the risk in this work, Nordic Mines discussed with the Company's lenders the possibility of obtaining more time for this undertaking. An extension was granted from 1 December 2015 and 15 December 2015, respectively, until January The Company delivered in January to its lenders an indicative updated action plan and a financial model. Please refer to Composition plan and agreement with banks regarding project financing loans. As communicated previously, Nordic Mines intends to publish its updated mineral resources in February The goal is then in March 2015 to complete and via a press release present a final updated action plan for the Laiva mine, including a plan for the start of production that the Company prepared in collaboration with SRK and that indicatively was delivered to the Company's lenders. Strategy for Nordic Mines and the Laiva mine As part of its planning project for the restart of the Laiva mine, the Company is also looking at possibilities to strengthen the Laiva project through partnerships and structural transactions with other actors in the Nordic gold mining industry. Nordic Mines believes that gold concentrate from several Nordic gold mines could be refined in the Nordic Mines processing plant, thereby processing the final product all the way from gold concentrate to doré bars and subsequently improving profitability. There are even clear synergies in the form of purchasing optimisation and streamlined administration. In recent years and up until the end of last year, the gold mining industry has been plagued by falling gold prices and difficult conditions for smaller exploration and mining companies. Nordic Mines firmly believes that more Nordic Mines Year-end Report January December (19)

3 consolidation in the industry will create better conditions for achieving long-term profitability, which would benefit employees, shareholders and other stakeholders alike in an industry that is important for the Nordic countries and Finland and Sweden in particular. Results, fourth quarter 2014 Net sales were SEK 0.0 million (SEK 68.2 million) during the fourth quarter of 2014 due to the production stop at the Laiva mine. Production costs for the fourth quarter of 2014 amounted to SEK 15.8 million (SEK 92.1 million). Even if there has not been any production during the quarter, the Company has maintained some of the organisation around the Laiva mine, for example for maintenance work as well as planning and preparations to restart operations at the Laiva mine. The mine and the plant also have a number of fixed costs in the form of, for example, leasing costs, which remain even when production has stopped. Depreciation, amortisation and impairment losses for the fourth quarter of 2014 were SEK 19.9 million (SEK million), which includes a revaluation of stored B-ore. Sales and administration costs amounted to SEK 9.7 million (SEK 30.1 million). Other operating income and operating expenses consist primarily of foreign exchange rate changes. The Company recorded an operating loss of SEK million (SEK million). Net financial items were SEK -6.9 million (SEK -8.4 million) and consisted primarily of accumulated interest. The Company's income tax for the period has an impact of SEK -0.9 million (SEK 15.6 million) on profit/loss. The loss for the period amounted to SEK million (SEK million). Cash flow and financial position Cash flow from operating activities including changes in working capital for the fourth quarter of 2014 amounted to SEK million (SEK million). Cash flow from the financing operations amounted to SEK -4.5 million (SEK 8.6) during the same period. Cash and cash equivalents at the end of the period amounted to SEK 83.2 million compared to SEK million as of 30 September In conjunction with the planning project to restart operations at the Laiva mine, Nordic Mines is also considering possibilities to further strengthen the project financially, for example through the pre-sale of gold production and gold deliveries, supplier terms and conditions or other types of bridge financing for working capital to decrease the risk of insufficient liquidity during the start-up months at the Laiva mine. At the end of the period, the Group s equity was SEK million, compared to SEK million as of 30 September The equity/assets ratio was 69.2 per cent compared to 70.9 per cent as of 30 September Net debt was SEK 46.7 million compared to SEK 4.7 million as of 30 September Investments Since the Company is currently not conducting any mining operations at the Laiva mine, only smaller investments have been made. Investments during the quarter amounted to SEK 0.7 million, compared to SEK 7.3 million during the same quarter of Segment reporting As per January 2013, the Group stopped using a segment division as there has only been one productive mine in Finland within the Group, and exploration work is currently limited to an administrative scope due to cost savings. The consolidated income statements and balance sheets have been reviewed and valued thereafter. Employees There were on average 77 employs during the fourth quarter of 2014, of which the majority were laid off (see Operations at the Laiva mine during the fourth quarter of 2014 above), compared to 101 during the fourth quarter of There were 77 employees at 31 December 2014, compared to 100 employees at 31 December No serious personal injuries were reported during the period. Nordic Mines Year-end Report January December (19)

4 Exploration Due to cost savings, Nordic Mine's exploration work was more or less suspended at the beginning of In total, capitalised exploration expenses as of 31 December 2014 amounted to SEK 64.3 million. Upon restart of the Laiva mine, focus will be on the current mineral resources and the Company will postpone additional exploration until further notice. Mineral resources and mineral reserves During the fourth quarter of 2014, SRK, an independent consultancy firm, carried out additional work with the aim of conducting new calculations of the mineral resources. The Company will present these new calculations before the end of February The most recent calculations of the mineral resources at the Laiva deposit before this were from November SRK also assisted with these calculations. The previously estimated mineral resources from SRK from November 2013 are as follows: MINERAL RESOURCES AT LAIVA, NOV 2013 In-situ Tonnes of ore Gold g/tonne Kg gold Indicated Mineral Resources (cut-off 0.6 g/tonne) , Inferred Mineral Resources (cut-off 0.6 g/tonne) , Note: as compared to CSA s 2012 statement of Mineral Resources, the new 2013 statement is constrained within an economic pit shell at a gold price of /ounce. This complies with the JORC code requirement to show that the Resources have reasonable prospects of eventual economic extraction. The technical report is available at: Due to the limited time and liquidity available within the framework of the reorganisation period, SRK's complete report is not yet ready. However, SRK made a preliminary calculation of the economically extractable portion of the mineral resource, a so-called Preliminary Economic Assessment, based on a gold price of 950 /tr oz. SRK used the above mineral resource model with a cut-off grade of 0.6 g of gold per tonne and based on a maximum annual production of 2 million tonnes after a gradual production increase from 1.6 million tonnes per year upon restart of the mining operations. This results in a remaining useful life of 5 years for the mine, producing approximately 10.6 million tonnes of ore with a head grade of approximately 1.3 g of gold per tonne. The previously published mineral reserve, updated by CSA Global Ltd (CSA) in November 2012, amounted to 15.2 million tonnes of ore (cut-off 0.5) with a grade of approximately 1.6 g of gold per tonne. The reason the new preliminary calculations of the economically extractable portion are lower in terms of the number of tonnes of ore and grams of gold/tonne is that the new model uses wider mineralised zones, which means the planned head grade will be lower, but the stripping ratio (SR) (i.e. the ore/waste rock ratio) is lower and more beneficial. This means that less waste rock will need to be mined to achieve the corresponding amount of ore. The new preliminary calculation is also based on updated mining and processing costs, which together with lower head grades in the ore zones affect the amount of mineable ore available. For definitions, please refer to Definitions in accordance with SveMin below. Nordic Mines Year-end Report January December (19)

5 The gold market and price of gold According to LBMA (London Bullion Market Association) gold fixing, the price of gold was listed at the beginning of the quarter per tr oz at USD 1,217 and EUR 964, and at the end of the quarter at USD 1,199 and EUR 987. EUR/ Ounce Gold, USD Gold, EUR USD/ Ounce The Nordic Mines share The Nordic Mines share has been traded on the Nasdaq Stockholm's Small Cap list since July The ticker symbol for the share is NOMI and the ISIN code is SE Shareholders As per 31 December 2014, there were approximately 11,000 shareholders in Nordic Mines. The ten largest shareholders in the company are listed in the table below. Shareholders as at 31 December 2014 Number of shares Holdings % GOLDMAN SACHS INTERNATIONAL LTD, W8IMY 834,614, % J P MORGON CLEARING CORP, W9 291,230, % EVLI CORPORATE FINANCE AB 226,282, % UBS AG CLIENTS ACCOUNT 212,533, % FÖRSÄKRINGSBOLAGET, AVANZA PENSION 202,537, % KÖBMAND BAMSE HOLDING APS 141,203, % ROBUR FÖRSÄKRING 130,297, % NOVATELLIGENCE AB 105,000, % NORDNET PENSIONSFÖRSÄKRING AB 94,377, % HANDELSBANKEN LIV 78,428, % OTHER 3,086,536, % Total 5,403,043, % Share capital and options As per 31 September 2014, the share capital amounted to SEK 391,835, divided between 5,403,043,196 shares with a quota value of SEK 7.25 öre each. In addition there are also, for example, the 736,778,618 warrants issued by Nordic Mines that target the Company's lenders. Equity amounted to SEK million as per 31 December 2014, compared to SEK million as per 30 September Nordic Mines Year-end Report January December (19)

6 Significant risks and uncertainties All enterprise is associated with a certain degree of risk. Nordic Mines operations must be assessed based on the risk, cost and difficulty that companies in the mining and exploration business often face. The risks in the majority of cases are such that the Company cannot protect itself from them. In addition, it should be noted that Nordic Mines is in an early phase of its operational activities. Nordic Mines is a small company and is dependent on a number of key individuals. The risk faced by mining and exploration companies is mainly associated with the outcome of the exploration itself, the production and the market price on the metal markets, but there is also risk associated with licensing issues related to exploration, processing and the environment. See also the detailed risk section in the 2013 Annual Report. Employees A limited expected lifetime and to date weak profitability for the Laiva mine can result in restricted opportunities to recruit key personnel once the mine restarts its operations. Financial risk management policy The Group is exposed to a variety of financial risks. These risks consist primarily of currency risk, gold price risk, credit risk, liquidity risk and interest rate risk. The Board and Management attempt to address these risks by identifying, evaluating and mitigating the risks listed above where appropriate. Currency risk Gold is quoted in USD, the majority of the costs occur in EUR and the Group is consolidated in SEK. Accordingly, the company is directly dependent on exchange rates for these currencies. If USD strengthens against EUR, this has a positive effect. If EUR strengthens against SEK, this has a positive effect on sales, but a negative effect on costs. Gold price risk Sales commenced in January 2012 and essentially have consisted of a single product, doré bars, containing gold, silver and copper. A decline in the price of gold could have an immediate negative impact on the Group's future profit as well as a negative impact on the Company's possibilities for restarting the Laiva mine. Composition plan and agreement with banks regarding project financing loans One condition for a successful implementation of the adopted composition plan for the Group's Finnish subsidiary, Nordic Mines Oy, is that the agreement reached with the bank consortium, with which a project financing agreement has been signed, can be fulfilled. As per the agreement, a number of changes were made to the project financing agreement and new opportunities for the bank consortium to terminate the agreement were inserted. These include the following. A draft of the start-up plans was delivered on 1 November 2014 and a final version must have been delivered on 1 December The financial model shall have been updated no later than 15 December 2014 and must be approved by the bank consortium. If the start-up plans are not delivered or the updated financial model is not delivered and approved on time, this shall serve as grounds for termination as per the project financing agreement. In order to ensure the accuracy of and minimise the risk in the work with the start-up plans and the associated financial model, Nordic Mines discussed with the Company's lenders the possibility of obtaining more time for this work. An extension was requested from 1 December 2015 and 15 December 2015, respectively, until January In January, the Company also delivered an indicative updated action plan and financial model to the Company s lenders for approval. The Company s lenders have currently not approved the action plan, but invited Nordic Mines to continue discussing the action plan and the restart of operations at the Laiva Mine. Furthermore, the existing financial covenants were replaced with five operational tests. These operational tests mean that Nordic Mines Oy at various points in time must achieve a certain percentage of a budgeted or forecast level to fulfil the requirements of the project financing agreement. Additional work is required before the budgeted and forecast levels can be adopted and approved by the bank consortium. The Company, therefore, does not know at this point in time against which levels the operational tests will be measured. The Company also does not know if it will have sufficient room to withstand swings in production or unforeseen events, particularly during the start-up phase. If the operational tests are not fulfilled, this will serve as grounds for termination as per the project financing agreement. If Nordic Mines Oy does not have sufficient funds to make the investments required by the financial model, this will serve as grounds for termination as per the project financing agreement. Other grounds for termination include those related to the Group companies not fulfilling their payment obligations under the composition plans. If Nordic Mines Oy significantly breaches the project financing agreement, the bank consortium is entitled to apply for a default of the Finnish composition plan. If the Company or Nordic Mines Oy breaches the composition plans or if the agreement with the bank consortium cannot be fulfilled, there is a risk that the Finnish composition plan or the agreement with the bank consortium will fail, which could lead to a new reorganisation, bankruptcy or other winding down of the Company. In the event the Finnish composition plan or the agreement with the bank consortium defaults, the relevant creditors' claims return to Nordic Mines Oy, including the claims the bank consortium and Nordic Mines Year-end Report January December (19)

7 other companies in the Group have granted payment exemption to in accordance with the composition plan, at their full amount, and in the event of bankruptcy all shareholders will lose the entire amount of their previously invested share capital. Liquidity risk The Company applied for reorganisation on 8 July 2013 due to insufficient liquidity. Due to the conclusion the reorganisation and the completed rights issue, the Company has a stronger financial position than it held previously. However, the Company continues to have limited financial resources. Furthermore, Nordic Mines is currently in phase where the restart of the Laiva mine is being planned and funds for expenditure are not currently covered by internally generated revenues. Therefore, the Company s growth may still require external financing. There is no guarantee that additional financing, if such proves necessary, will be made available to the Company on acceptable terms, if at all. Instability of financial institutions can have an impact on the Company's ability to conduct a new share issue or obtain future financing through loans. Disruptions in the capital and credit markets due to uncertainty, changed or increased regulation of financial institutions, decreased alternatives or the failure of significant financial institutions can negatively affect the Company's access to external capital. Interest rate risks Interest rates have a negative impact on the consolidated profit/loss and cash flow. All interest rates have both an annual fixed interest rate margin and a variable component that follows Euribor. If the Euribor rate is increased, the Company's interest expenses increase. The average rate for the original EUR 53.0 million of the project loan has been approximately 4 per cent. The average rate for the additional credit frameworks of EUR 7.5 million and EUR 6.0 million, respectively, has been approximately 10 per cent. The bank consortium has invoiced the Company an additional 2 percentage points on the loan due to the reorganisation and lack of liquidity. Interest has not been paid while the Company was undergoing its reorganisation, but it was reported as accrued expenses. Through the composition plan with the Company's Finnish subsidiary and the changes in the facility agreement with the Company's lenders, the fixed interest rate margin will be raised to 8 per cent. Accounting principles The consolidated accounts have been prepared in accordance with the International Financial Reporting Standards (IFRS) as endorsed by the EU and recommendation RFR 1 issued by the Swedish Financial Reporting Board on Supplementary Accounting Rules for Groups, which specifies the additions to the IFRS disclosures that are required as stipulated in the Annual Accounts Act. This financial report was prepared in accordance with IAS 34, Interim Financial Reporting. The Parent Company s financial statements are prepared in accordance with the Annual Accounts Act and RFR 2, Accounting for Legal Entities. The Group uses the same accounting principles as those described in the 2013 Annual Report. No new IFRS additions or regulations that affect the Group have entered into force. Annual General Meeting The Annual General Meeting will be held in May/June The company will provide information about the Nomination Committee for the Annual General Meeting at a later stage. Annual Report The annual report will be available on the Company's website, no later than four weeks prior to the Annual General Meeting. It will also be available at the Company's head office. Upon request, the annual report can be sent by regular mail. Upcoming information meetings Report for the first quarter of April 2015 Report for the second quarter of August 2015 Report for the third quarter of October 2015 Nordic Mines Year-end Report January December (19)

8 The Board of Directors and the Chief Executive Officer hereby confirm that this interim report gives a true and fair view of the company s and the Group s operations, financial position and results of operations, and describes significant risks and uncertainties faced by the company and the companies in the Group. The report for January December 2014 has not been reviewed by the Company's auditors. Uppsala, 18 February 2015 NORDIC MINES AB (publ) Lennart Schönning Chairman of the Board Helve Boman Board member Krister Söderholm Board member Thomas Cederborg CEO Note Nordic Mines is required to publish this information pursuant to the Securities Markets Act and/or the Financial Instruments Trading Act. The information was published on 19 February 2014 at 8:00 a.m. For further information, please contact: Thomas Cederborg, CEO, tel: Jonatan Forsberg, CFO, tel: info@nordicmines.se Nordic Mines Year-end Report January December (19)

9 Definitions according to SveMin Proven mineral reserve Probable mineral reserve Measured mineral resources Indicated mineral resources Inferred mineral resources Availability Throughput The part of a measured mineral resource where it has been established through mining and feasibility studies that it is technically and economically viable to mine and process the deposits. The part of a measured and indicated mineral resource where it has been established through mining and feasibility studies that it is technically and economically viable to mine and process the deposits. Mineral resource about which there is a sufficient amount of information for the geological and grade continuity to be confirmed. Mineral resource where the amount of information is not sufficient to confirm continuity but where, based on this information combined with geoscientific interpretation, the geological continuity and grade continuity can be reasonably assumed. Mineral resource where the amount of information is not sufficient to confirm geological and grade continuity and where the technical data consists of reasonable assumptions. The percentage of the month's hours which the plant has been in use. The goal is for availability to exceed 90%. The number of tonnes of ore per hour that goes through the processing plant. The design capacity is 250 tonnes ore per hour. Financial definitions Return on total capital (%) Return on equity (%) Equity/assets ratio (%) Number of shares after dilution Earnings per share Equity per share Net debts Cash cost (USD/troy oz) Cost per enriched ore tonne Profit/loss for the period after net financial items plus financial expenses as a percentage of the average total assets. Profit/loss for the period as a percentage of the average equity. Equity divided by total assets. Dilution of outstanding options has been calculated according to IAS 33 Earnings Per Share. Net profit/loss after tax for the period divided by the average number of outstanding shares for the period before dilution. Calculated according to IAS 33 Earnings Per Share. Total equity as above at the end of the period divided by the total number of outstanding shares as per the same date. Interest-bearing liabilities (interest-bearing receivables + cash) Production costs/sold/delivered gold in troy oz Production costs/throughput, Enriched ore (tonnes) Nordic Mines Year-end Report January December (19)

10 Consolidated Statement of Comprehensive Income Q 4 Q 4 Full year Full year SEK 000 Note Sales revenues Cost of goods sold of which production costs of which depreciations Gross income Selling and administrative expenses Other operating income Other operating costs Operating income Financial income Financial expenses Income after financial items Income tax Net income Other comprehensive income Cash flow hedges Exchange rate differences for the period Total comprehensive income net of tax for the period Total comprehensive income for the period Net income attributable to: equity holders of the parent Total comprehensive income attributable to: equity holders of the parent Average number of shares before dilution, thousands Average number of shares after dilution, thousands Earnings per share before dilution, SEK -0,01-1,77 0,07-2,22 Earnings per share after dilution, SEK -0,01-1,77 0,07-2,22 Comprehensive income per share before dilution, SEK -0,01-1,82 0,06-1,93 Comprehensive income per share after dilution, SEK -0,01-1,82 0,06-1,93 Nordic Mines Year-end report (19)

11 Consolidated Statement of Comprehensive Income, quarterly Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 SEK 000 Note Sales revenues Cost of goods sold of which production costs of which depreciations Gross income Selling and administrative expenses Other operating income Other operating costs Operating income Financial income Financial expenses Income after financial items Income tax Net income Other comprehensive income Cash flow hedges Exchange rate differences for the period Total comprehensive income net of tax for the period Total comprehensive income for the period Net income attributable to: equity holders of the parent Total comprehensive income attributable to: equity holders of the parent Average number of shares before dilution, thousands Average number of shares after dilution, thousands Earnings per share before dilution, SEK -0,17-0,08-0,14-1,77-0,11-0,08 0,16-0,01 Earnings per share after dilution, SEK -0,17-0,08-0,14-1,77-0,11-0,08 0,16-0,01 Comprehensive income per share before dilution, SEK -0,08 0,11-0,06-1,82-0,11-0,10 0,15-0,01 Comprehensive income per share after dilution, SEK -0,08 0,11-0,06-1,82-0,11-0,10 0,15-0,01 Other information Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Throughput, ore milled (ton) Gold grade, gram per ton 1,0 1,0 0,8 0,8 0,6 N/A N/A N/A Availability/hours capacity utlilization (%) 83% 86% 82% 84% 87% N/A N/A N/A Gold recovery in plant (%) 84% 86% 86% 82% 79% N/A N/A N/A Gold production (kg) Gold production (tr oz) Gold sold/delivered (kg) Gold sold/delivered (tr oz) Cash cost (USD/oz) N/A N/A Cost per ore milled, ton (EUR) N/A N/A N/A Cost per ore milled, ton (SEK) N/A N/A N/A LTIFR, including contractors (accidents per 1 million working hours) USD/SEK, average rate 6,43 6,56 6,55 6,51 6,46 6,60 6,95 7,42 EUR/SEK, average rate 8,50 8,56 8,68 8,85 8,86 9,05 9,20 9,27 EUR/SEK, closing rate 8,36 8,71 8,70 8,92 8,94 9,18 9,20 9,47 Nordic Mines Year-end report (19)

12 Consolidated Statement of Financial Position 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep 31 Dec SEK 000 Note TILLGÅNGAR Non-current assets Intangible assets Property, plant and equipment Financial assets Total non-current assets Current assets Inventories and work in progress Current receivables Cash and cash equivalents Total current assets TOTAL ASSETS EQUITY AND LIABILITIES Equity Non-current liabilities Borrowings Provisions Derivative instruments Total non-current liabilities Current liabilities Accounts payable Borrowings Derivative instruments Other liabilities Accrued expenses and prepaid income Total current liabilities TOTAL EQUITY AND LIABILITIES Real estate mortgages Financial guarantees Consolidated Statement of Changes in Equity SEK 000 Equity Other capital Reserves Retained earnings Total equity Opening balance at January 1, Comprehensive income Net income Other result for the period Total comprehensive income for the period Transactions with equity holders New share issue Issue expenses Total comprehensive income for the period Total equity at December 31, Opening balance at January 1, Comprehensive income Net income Other result for the period Total comprehensive income for the period Transactions with equity holders New share issue Issue expenses Total comprehensive income for the period Total equity at December 31, Nordic Mines Year-end report (19)

13 Consolidated Statement of Cash Flows Q4 Q4 Full year Full year SEK Operating activities Income after financial items Adjustments for items not included in cash flow: Depreciations and write-offs Provisions Others Cash flow after operating activities before changes in working capital Cash flow from changes in working capital Changes in inventories and work in progress Changes in current receivables Changes in accounts payable Changes in current liabilities Cash flow from operating activities Investing activities Acquisition of intangible assets Acquisition of fixed assets Recovery/ aquisition of other fixed assets Cash flow from investing activities Financing activities Rights issue Amortization and loans Cash flow from financing activities Changes in cash and cash equivalents Cash and cash equivalents in the beginning of the period Cash and cash equivalents in the end of the period Consolidated Statement of Cash Flows, quarterly Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 SEK Operating activities Profit/loss after financial items Adjustments for items not included in cash flow Depreciations and write-offs Provisions Others Cash flow after operating activities before changes in working capital Cash flow from changes in working capital Changes in inventories and work in progress Changes in current receivables Changes in accounts payable Changes in current liabilities Cash flow from operating activities Investing activities Acquisition of intangible assets Acquisition of fixed assets Recovery/ aquisition of other fixed assets Cash flow from investing activities Financing activities Rights issue Amortization and loans Cash flow from financing activities Changes in cash and cash equivalents Cash and cash equivalents in the beginning of the period Cash and cash equivalents in the end of the period Nordic Mines Year-end report (19)

14 Consolidated Key Ratios Q4 Q4 Full year Full year Investments in plant, SEK Exploration, SEK of which in Laiva EBITDA SEK Income after financial items, SEK Return on total assets, % Neg Neg 40 Neg Return on equity, % Neg Neg 27 Neg Equity, SEK Balance sheet total, SEK Net debt, SEK Equity/assets ratio, % 69,2 26,6 69,2 26,6 Average number of employees Number of employees at the end of the period Equity per share after dilution, SEK 0,09 0,67 0,09 0,67 Number of shares, thousands Number of shares after dilution (at the end of the period), thousands Number of shares after dilution (average), thousand Cash flow per share, SEK -0,01-0,05 0,01-0,12 Consolidated Quarterly Key Ratios Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Investments in plant, SEK Exploration, SEK of which in Laiva EBITDA SEK Income after financial items, SEK Return on total assets, % Neg Neg Neg Neg Neg Neg 53 Neg Return on equity, % Neg Neg Neg Neg Neg Neg 46 Neg Equity, SEK Balance sheet total, SEK Net debt, SEK Equity/assets ratio, % 54,0 59,3 58,6 26,6 23,2 19,4 70,9 69,2 Average number of employees Number of employees at the end of the period Equity per share after dilution, SEK 2,44 2,55 2,49 0,67 0,56 0,47 0,10 0,09 Number of shares, thousands Number of shares after dilution (at the end of the period), thousands Number of shares after dilution (average), thousand Cash flow per share, SEK 0,24-0,30-0,01-0,05-0,02-0,04 0,02-0,01 Nordic Mines Year-end report (19)

15 Parent Company Income Statement Q4 Q4 Full year Full year SEK Administrative costs Other operative income Other operating costs Operating income Financial items, net Income after financial items Income tax Net income Averge numer of shares before dilution, thousands Average number of shares after dilution, thousands Basic earnings per share, SEK 0,00-2,61-0,09-2,68 Diluted earnings per share, SEK 0,00-2,61-0,09-2,68 Parent Company Balance Sheet 31 Dec 31 Dec SEK 000 Note ASSETS Non-current assets Intangible assets Property, plant and equipment Financial assets Total non-current assets Current assets Current receivables Cash and cash equivalents Total current assets TOTAL ASSETS EQUITY AND LIABILITIES Equity Non-current liabilities Current liabilities TOTAL EQUITY AND LIABILITIES Pledged assets Contingent liabilities During the fourth quarter 2013, the parent company Nordic Mines AB made a write-off of the intercompany loans to subsidiaries of SEK m as well as a write-off of deferred tax assets of SEK 30.4 m due to the current financial situation. During the third quarter of 2014 the parent company made a composition loss referring to internal claims on subsidiaries in a total of million (of which million was written down during the fourth quarter of 2013). Nordic Mines Year-end report (19)

16 Parent Company Statement of Changes in Equity SEK 000 Equity Statutory reserve Share premium reserve Retained earnings Total Equity Opening balance at January 1, New share issues Issue expenses Net income Translation difference Closing balance at December 31, Belopp i Tkr Aktiekapital Reservfond Överkursfond Balanserat resultat Summa eget kapital Opening balance at January 1, New share issues Issue expenses Net income Translation difference Closing balance at December 31, Parent Company Statement of Cash Flows Q4 Q4 Full year Full year SEK Cash flow from operating activities before change in working capital Change in working capital Cash flow from operating activities Cash flow from investing activities Cash flow from financing activities Change in cash and cash equivalents for the period Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period Nordic Mines Year-end report (19)

17 Note 1 Sales revenues Q1 Q2 Q3 Q4 Full year Q1 Q2 Q3 Q4 Full year SEK Gold sales Silver sales Hedging of gold price Total sales revenues Note 2 Other operating income and other operating costs Q 1 Q 2 Q 3 Q 4 Q1 Q2 Q3 Q4 SEK Exchange gains (unrealized) Exchange losses (unrealized) Composition profit Total other operating income and other operating costs Note 3 Group reserves 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep 31 Dec SEK Hedges At beginning of period Cash flow hedge: Fair value, gain/loss in the quarter Tax on fair value, gain/loss in the quarter Total hedges Closing balance Translations At beginning of period Exchange rate differences - Group Total translations Closing balance Total hedges Note 4 Intangible Assets 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep 31 Dec SEK Opening balance Purchases Write-off Exchange rate differences Closing balance Nordic Mines Year-end report (19)

18 Note 5 Property, plant and equipment 31 Dec 2014 Machinery Total Buildings, Mine and Production property SEK 000 land assets Inventory facility plant Opening book value Purchases Disposals Exchange rate differences Depreciation Closing book value Note 6 Inventories and work in progress 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep 31 Dec SEK Mined ore in stockpile Consumables Work in progress Doré bars Total inventories and work in progress Note 7 Bank debt In conjunction with the Finnish reorganisation, the Group's loans were renegotiated. As a result of this renegotiation, the loans amount to EUR 12.5 million, or SEK 115 million. The original facility agreements and the original amounts excluding amortisation (EUR 53 million) continue to be the basis for the relationship with the bank consortium. In conjunction with the reorganisation, the bank consortium has therefore submitted a waiver for the difference between the original amounts and the amounts under the reorganisation. The waiver is primarily based on the Group following the conditions of the reorganisation. At period end, the Group is judged to fulfil the conditions under the reorganisation, and the loans are therefore recorded at EUR 12.5 million or SEK 115 million. For more information please refer to the composition plan on page 7. In conjunction with the Group's financial challenges and its subsequent reorganisation, Nordic Mines realised a guarantee provided by the bank consortium. The bank consortium has received a convertible promissory note for SEK 53.5 million that can only be converted into shares. The consortium has also received warrants corresponding to 12% of the capital, or 736,778,618 shares. The warrants expire in Since the promissory note can only be converted into shares and in addition under special conditions is not judged to result in a future payment, it has been booked under equity in the consolidated accounts. In order to enable a future conversion, the promissory note has been recorded at its full amount in the Parent Company's accounts. A future payment obligation can only arise if Nordic Mines AB refuses to convert the note into shares. It is the assessment of the Board of Directors that this condition is not present at period end. In the Parent Company, the realisation of the guarantee has been recorded as an investment in Nordic Mines OY. Note 9 Derivative instruments, share of non-current and current liabilities 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep 31 Dec SEK Long-term debts Current debts Total derivatives instruments Nordic Mines Year-end report (19)

19 Note 9 Pledged assets SEK Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep 31 Dec Own liabilities and provisions Restricted cash, Deposition Trade-, Traffic- & Environment authority in Finland Restricted cash, Bergstaten Leasehold mortgages (MEUR 700) Floating charges (MEUR 730) Property mortgages (MEUR 730) Total A significant portion of the project funding raised in March 2011 is from the land around Laiva, the properties and machinery owned by the Company, which was pledged to the benefit of the project financiers. The value was set by the National Land Survey of Finland at EUR 730 million. The book value is significantly lower on the corresponding assets and was SEK 459 million (roughly EUR 50 million) as at 30 September Note 10 Contingent liabilities 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep 31 Dec SEK Guarantee Tallqvist AB (MEUR 1) Guarantee Atlas Copco AB (maximum amount) Guarantee Nordea Oy (MEUR 1,1) Total Nordic Mines Year-end report (19)