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Northland Resources operational update on the Kaunisvaara project

Steel News - Published on Fri, 25 Jan 2013

Northland Resources SA announced its sixth bi monthly operational and construction update on the Kaunisvaara project.

Forecasted production
1.5 million dry metric tonnes (“dmt”) in 2013
3.1 million dmt in 2014
Full production rate of 4 million dry metric tonnes per annum (“dmtpa”) as of the third quarter of 2014
69 percent iron ore concentrate with very low impurities expected to position Northland’s product in the top 5 per cent of global iron ore production from a quality perspective.

Operational update - Commissioning according to plan

The Kaunisvaara process plant is working according to its design and no modification has been necessary

In December 2012, the Kaunisvaara project produced its first iron ore concentrate which was transported by truck and rail to its Fagernes Terminal in the Port of Narvik. The entire logistical chain works well.

To-date 18,500 tonnes of iron ore concentrate have been produced in Kaunisvaara

Approximately 4,500 tonnes of concentrate is currently stored in Narvik

Approximately 5,000 tonnes of concentrate is currently stored in Pitkäjärvi

The first customer shipment is expected to leave Narvik for Tata Steel in the Netherlands in mid February 2013

Road and rail interchange work has been completed at Pitkäjärvi

Permits necessary for a temporary solution for the Fagernes Terminal in the Port of Narvik are in place

The announcements of the Hannukainen and Pellivuoma DFSs, have been postponed until the contemplated financing transaction has been completed.

Karl-Axel Waplan, President and CEO of Northland Resources S.A. said, “Northland has progressed the Kaunisvaara project from bog to mine in less than two years. We are now preparing for the next major step to reach full production from our Tapuli mine in the third quarter of 2014. To achieve this we unfortunately need to raise additional financing due to cost overruns and higher initial operating costs. We are comfortable with the estimates for the remaining investments and our forecasted Life of Mine operating cost per tonne.”

“The production ramp-up has been successful and to date Northland has produced approximately 18,500 dmt of iron ore concentrate with Fe-grade and quality well in accordance with specifications. Simultaneously, we have been carefully assessing the long-term financing needs of the Kaunisvaara project. We have devoted significant effort to verifying the numbers, pursuing possible mitigating activities and have identified an additional financing requirement of USD 425 million, which is required to cover higher than expected capital and higher initial operating expenditures for the first two years. The Company has estimated that Life of Mine (“LoM”) Opex/tonne will be USD 67 and is in line with the Definite Feasibility Study, adjusted for the currency effect”.

The Company has retained Arctic Securities ASA and Pareto Securities AS as Joint Lead Managers and Bookrunners, and Ocean Equities Limited and SpareBank 1 Markets AS as Co-lead managers to advise the Company in connection with the expected equity and bond offerings.

Source - Northland Resources


Posted By : admin on Fri, 25 Jan 2013
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