NORDIC MINING
ANNUAL REPORT 2022
CONTENT
CEO’s REPORT
OPERATIONS
BOD’s REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
16
first 5 years of production. Further to the initial
garnet oꢃake, the parties shall discuss extension
of the cooperation, comprising for example joint
marketing, sales, and distribution of garnet from
the Engebø Project. The consideration under the
garnet oꢃake agreement will be based on a
pre-agreed price schedule. In February 2023,
Nordic Rutile entered into a Memorandum of
Understanding (“MoU”) for a long-term joint
cooperation for the oꢃake of pyrite from the
Project with Green Trail Holding Ltd. Pyrite is a
mineral that is present in the Engebø Eclogite-ore
and that will be separated in the process of
purifying the rutile concentrate and that has
previously been considered as a residual waste
stream from the Engebø Project.
its shares in Keliber for a cash consideration of
EUR 157.28 per share, in total EUR 46.9 million.
The sale of the shares has been completed in Q3
2022. The Group realized a fair value gain of NOK
283.8 million in 2022. The consideration received
in EUR resulted in foreign exchange gains in 2022
of NOK 16.1 million, which is included in financial
income. Please see note 13 further information.
The Group has assessed the fair value of the
convertible loan to NOK 143.0 million as per the
fourth quarter of 2022, recognizing a fair value loss
of NOK 10.5 million in 2022. Please see note 19
for further information. Net financial items in 2022
was -25.0 million (NOK -0.3 million), with the main
net financial items being gain on foreign exchange
of NOK 13.3 million, interest cost of NOK -12.7
million, and other finance costs of NOK -25.6 million.
Please see note 7 for further information.
Net cash outflow from operating activities in 2022
was NOK 48.8 million (NOK –60.0 million). Net cash
flow from the Group’s investment activities in
2022 was NOK 239.7 million, with the main
cashflow being the proceeds from the sale of
Keliber in September of NOK 474.4 million, offset
by NOK 233.7 million in investment in Mine under
construction. Net cash outflow from financing
activities in 2022 was NOK 62.5 million, resulting
from the net proceeds from the convertible loan in
February 2022 of NOK 126.4 million and share
issue of NOK 7.4 million May 2022 following
exercise of share options held by Management,
less transfer of NOK 178.8 million for issue
discount of USD 10 million, four months bond
interest of USD 4.2 million and transaction costs of
USD 3.3 million to Bond Escrow, as well as financing
fees of NOK 17.4 million (NOK 75.7 million). Please
see note 15 for information on senior secured
bond. The Group’s cash and cash equivalents as of
31 December 2022 was NOK 164.7 million (NOK
32.1 million). In addition, the Group had NOK 1.03
billion on restricted Escrow account for bond and
NOK 4.2 million on restricted account pledged
toward Directorate of Mining for clean-up
production, including a contingency of USD 25
million and project reserve of USD 30 million. The
bond and royalty financing and is subject to certain
pre-disbursement conditions precedent before the
proceeds can be released to the Project, including
standard conditions and utilization in full of the
equity and royalty funds, respectively.
Based on current forecasts and plans, the Board
considers that the Group’s financing and working
capital is satisfactory to secure payment of
financial obligations for at least 12 months from
the time of this report. The Board confirms that the
financial statements have been prepared on the
basis of a going concern assumption and in
accordance with section 3-3a of the Accounting Act.
In January 2021, the Agency granted the revised
environmental permit, commenting that the
RISK MANAGEMENT
Reported net result for the Group in 2022 was
NOK 202.4 million (NOK 5.4 million), with the net
profit for the year being driven by the realized gain
on the sale of the shares in Keliber. In April 2022,
the Group started early construction works at
Engebø, which includes preparing the properties for
construction, continuation of detailed project
The Group is exposed to a number of risks that may
affect its business, including political and
regulatory, market, operational and financial risks.
In the opinion of the Board, the Company has
implemented management systems that are
satisfactory to address risk management and
internal controls for the current stage of the Group.
significant reduction in chemical consumption will
have lower impact on the environment than the
previous planned consumption. The decision was
confirmed by the Ministry of Climate and Environment
in November 2021 concluding that the complaints
received in relation to the revised discharge permit
do not provide any basis to revoke or change the
permit. The decision from the Ministry of Climate
and Environment is final and cannot be appealed.
planning and process for procurement of critical
process equipment, and commencement of
measures in accordance with the operating license.
Nordic Mining’s total assets as of 31 December
2022 was NOK 1.51 billion (31.12.2021: NOK
255.3 million) and total equity was NOK 454.5
million (31.12.2021: NOK 245.7 million).
Political and regulatory risk
groundworks on process plant area and tunnelling
work. In 2022 the Group has capitalized in the balance
sheet under Mine under construction direct costs
related to the construction work of NOK 259.6 million,
in addition to NOK 0.9 million in property, plant and
equipment related to the Engebø Project. In addition,
Evaluation and exploration assets related to Engebø
of NOK 28.8 million was in 2022 been reclassified in
the balance sheet to Mine under construction. Nordic
Mining’s carrying amount for Mine under construction
was NOK 288.4 million as of 31 December 2022.
Nordic Mining depends as resource company in the
mining industry on permits and licenses from
relevant authorities.
FINANCIAL PERFORMANCE
For comparison, numbers in brackets relate to the
comparable period in 2021.
In March 2023, Nordic Mining secured the final
part of the project financing package for the
Project of USD 277 million, comprising equity,
senior secured bond, and non-dilutive royalty
financing. The project financing package is
expected to fund all costs and expenditures to
bring the Engebø Project into commercial
In May 2022, the Ministry of Trade, Industry and
Fisheries (“MTIF”) resolved that Nordic Mining’s
operating license is maintained as granted with full
rights to the Engebø deposit, confirming the
resolution from the Directorate of Mining. The
decision from MTIF is final and cannot be appealed.
The operating license is granted for the life of mine
The Group is under construction of the Engebø
Project and has, so far, no sales revenues from
operations. Reported operating loss for 2022 was
NOK 45.9 million (NOK –60.7 million). In June,
Nordic Mining accepted an offer from SSW to sell
