NORDIC MINES AB (publ) Interim report January - March 2014

First quarter 2014

·         Net sales proceeds for Gold and silver amounted to SEK 51.6 million (SEK 85.4 million).
·         The company recorded an operating loss of SEK -36.9 million (SEK -59.0 million).
·         The period's loss after tax amounted to SEK -36.4 million (SEK -45.7 million),
corresponding to SEK -0.11 (SEK -0.17) per share.
·         The period's comprehensive income amounted to SEK -37.0 million (SEK -22.5 million), corresponding to SEK -0.11 (SEK -0.08) per share.
·         Cash and cash equivalents were SEK 21.9 million (SEK 149.7 million) at the end of the period.
·         Investments were SEK 0.5 million (SEK 16.5 million).
·         In total, 187 kilograms of gold (278 kilograms) were produced at the Laiva mine.
·         Since applying for reorganisation, the bank consortium continues to exercise an administrative option of withholding payments from sales of gold, which increases the risk of delayed or missed payments to other creditors, such as suppliers, authorities and employees.
·         On 14 January 2014, the Uppsala District Court decided that the reorganisation proceedings in the Swedish companies would continue for another three months.
·         The legal proceedings initiated by a supplier during the fourth quarter were concluded and paid in January 2014.
·         On 14 February 2014, the Oulu District Court decided that the reorganisation proceedings in the Finnish subsidiary would continue until 30 May 2014.
·         On 12 March, the company announced that the Finnish subsidiary, Nordic Mines Oy, was starting collaboration negotiations with the union representatives to plan a temporary stop in production at the Laiva mine to realise additional cost savings.
·         On 13 March the company announced that Jonatan Forsberg was taking over the role as interim CFO since Susanne Andersson had decided to leave the company.
·         On 26 March a notification for an extraordinary general meeting on 28 April 2014 was announced. The purpose of the meeting is to decide on the Board's decision to conduct a new share issue, proposals for issue authorisation and related proposals aiming to create flexibility in the management of the company's capitalisation and reorganisation.

Post balance sheet eventsOn 17 April 2014 the Uppsala District Court decided that the organisation proceedings in the Swedish companies would continue for another three months until 8 July 2014. As of 8 July 2014, the Swedish companies will have been undergoing a reorganisation for 12 months. According to Swedish law, it is not possible to extend a reorganisation beyond 12 months unless there are special grounds for doing so. If a solution is not in place by 8 July 2014, the company runs the risk of bankruptcy.Comments from the CEO

"The search for alternative funding solutions continues in order to safeguard a restart of operations at the Laiva mine."

"The first quarter consisted of intense efforts to find external financing and planning work for the impairment of liabilities in the event of future composition negotiations. To safeguard cash liquidity during the reorganisation, the company has held collaboration negotiations with union representatives for the employees at the Finnish subsidiary, after which the decision was made to temporarily stop production at the Laiva mine to realise additional cost savings," says Thomas Cederborg, CEO. 

In total, 187 kilograms of gold were produced during the first quarter of 2014, compared to 241 kilograms during the previous quarter. Since the end of July 2013, the company has temporarily ceased mining in the mine in order to gain cost savings during the reorganisation efforts. During this period, the processing plant is taking in ore from the stock piles, which contains a lower head grade. As of 31 March 2014, there were 335,800 tonnes of ore in stock. Processing plant throughput was 371,678 tonnes of ore for the quarter.

Sales proceeds were SEK 51.6 million, compared to SEK 68.2 million during the fourth quarter. The reduction is the result of lower production of gold due to a lower head grade. The lower grade is due to the falling head grade in the remaining ore stock that was processed during the first quarter.
The operating loss was SEK -36.9 million, compared to SEK -610.5 million during the fourth quarter. The loss during the fourth quarter is primarily due to extraordinary adjustments of SEK 575.9 million.
Because the company is running at a loss and using cash, primarily due to a much too low head grade in the ore stock, the additional decision was made to temporarily stop production in the processing plant. The restart of operations at Laiva is entirely dependent on that an external financing is secured.

Liquidity remained strained and totalled SEK 21.9 million compared to SEK 28.1 million as at 31 December 2013.

"A restart of mining operations is dependent on write down of liabilities in future composition negotiations as well as additional external financing. Efforts are continuing to find alternative funding solutions. It is important to keep all options open, and this requires more time," says Thomas Cederborg, CEO.

For further information, please contact:
Thomas Cederborg, CEO, +46 708 480 521
Jonatan Forsberg, CFO, +46 761 051 310

For further information regarding Nordic Mines, please connect to www.nordicmines.com

The information above has been made public in accordance with the Securities Market Act and/or Financial Instruments Trading Act. The information was published at 08.00 (CET) on April 23, 2014.

Nordic Mines is a Nordic mining and exploration company whose vision is to be one of the leading gold producers in the Nordics and Europe and a role model in respecting the environment. The company started mining gold in the Laiva mine in Finland in summer 2011. These gold deposits are among the largest in the Nordic region. Exploration is in progress in Finland and in Sweden. Nordic Mines was established 2005 and have more the 100 employees with head office in Uppsala, Sweden, The Nordic Mines share is traded on the Nasdaq OMX Small Cap list in Stockholm.

Nordic Mines AB Interim Report january - march 2014


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Source: Nordic Mines AB via Globenewswire
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