LUXEMBOURG, LUXEMBOURG — (Marketwired) — 11/14/13 — Northland Resources S.A. (OSLO: NAUR)(FRANKFURT: NPK)(OMX: NAURo) (together with its subsidiaries „Northland“, „NRSA“ or the „Company“) publishes an operational update for the Kaunisvaara project, including production figures for the third quarter of 2013. Among other important milestones, the third Vertimill („VTM“) has been installed and is operational. The Company is also expecting to have completed the installment of the ship-loader and the unloading facilities at the Port of Narvik during the fourth quarter of 2013.
Reference is made to the press release dated November 13, 2013 announcing that the third quarter result will be postponed until November 28, 2013.
The following is an operational update of the Kaunisvaara Project.
Kaunisvaara Project
Kaunisvaara Production
In December, 2012, Northland produced its first iron ore concentrate in the process plant. During the three first quarters of 2013, the Company has continued to ramp up production and hot commissioning is now close to completion. The logistics chain has proven solid and the Company has successfully delivered ten shiploads of iron ore concentrate to end customers. Northland expects completion and hand over of the unloading station and ship loader in the Port of Narvik during the fourth quarter of 2013.
Mine and process plant
Production during third quarter
Summary:
The Fe grade during Q3 was lower than planned as mining positions have not been fully met due to the lower production rate compared to budget for the first three quarters.
During Q3, the process plant operated with only two VTM-s. During the first two months of the quarter, there were large variations in Fe-grade for the incoming ore going through to the processing plant. This has affected production by periodically high circulating loads in the VTM circuits. The quality of the product has been consistently good except for the moisture level, which from time to time has been above 7%.
The mine has managed to minimize variations of Fe grade of the ore during September.
The third VTM was put into trial operation during the last week of Q3, 2013 which immediately resulted in a significantly higher production.
Kaunisvaara marketing and sales
The logistics chain
The Port
Organization
Northland Resources has completed the transition into becoming an operational Mining Company. Since mid-2012 the Company has been staffed in all functions required to produce high quality iron ore concentrate. During the Q4, 2012, the Company started operations in the mine and went into hot commissioning, producing iron ore concentrate. The period since, has been very intensive, but successful from an operational perspective. The mine and the process plant are currently in operation, producing iron ore concentrate 24/7 and the Company continues to hire staff.
On September 12, 2013 it was announced that Johan Dagertun will replace Eva Kaijser as CFO on November 15. Mr. Dagertun has held various positions in the Company since 2010. His current position in the Company is VP Business Development and Deputy COO. Due to the postponement of the third quarter result, Eva Kaijser will keep her position as CFO until the third quarter results has been published at the end of November.
By September 30, 2013, the total number of employees in the Company was 276.
Safety
Lost Time Injury Frequency Rate („LTIFR“), according to the Swedish standard was 4.65 from the end of September 2012 until end of September 2013 (4.64 for the previous period, i.e. end of June 2012 to June 2013). The corresponding number according to the international standard for the same period was 0.77 per 200,000 worked hours (0.80 for the previous period)
There was 1 lost time injury („LTI“) reported, both according to international and Swedish standards, during the third quarter, 2013 (in the previous quarter, there were no LTIs according to Swedish and international standards respectively). A total of 108 near hits were reported for the third quarter (previous quarter: 107 near hits).
In October, the LTIFR was 6.70 according to Swedish standard and 1.0 according to international standard. There were 2 LTI during October and 60 near hits.
Environment
24 environmental incidents were recorded during the third quarter, typically minor oil spills, occurring within the industrial area as a consequence of vehicle or mobile unit malfunctions. Routines are in place for collecting oil spills and managing contaminated material appropriately. In October there were 6 environmental incidents.
A number of actions have been taken in order to address complaints and mitigate the risk of dusting during transportation of the iron ore concentrate. In Kaunisvaara, truck tracks inside the area as well as the exit have been paved with asphalt in order to reduce the amount of concentrate that sticks to the truck wheels and is released during the transport to Pitkajarvi. Wind breakers have also been installed to reduce the risk of concentrate being carried by the wind to surrounding areas. In Pitkajarvi, Northland has started spraying the train wagons with a dust binding agent in order to further reduce the risk of dusting during train transports up to Narvik. Equipment to measure dusting has also been placed along the railroad to Narvik.
Permitting
The environmental permitting process for the Extended Kaunisvaara Operations including the Sahavaara mine continues. A preliminary hearing was held by the Environmental Court September 16-19, 2013. At the meeting, a need for additional complementary information was identified. This is considered to be quite extensive work and the due date for submission of new material to the court is set to December 20, 2013. Consequently, the main court hearings will be postponed to first quarter of 2014.
An extended mine concession covering the Southern extension of the Tapuli pit is in the final stages of preparation.
Hannukainen and Pellivuoma DFS release
Northland is currently focusing on its current and planned production from the Tapuli and Sahavaara deposit, in line with its business plan. Therefore the finalization of the Pellivouma deposit DFS will not published in the near term. The DFS report for Hannukainen is expected to be published during the first half of 2014.
Northland is a producer of iron ore concentrate, with a portfolio of production, development and exploration mines and projects in northern Sweden and Finland. The first construction phase of the Kaunisvaara project is complete and production ramp-up started in November 2012. The Company expects to produce high-grade, high-quality magnetite iron concentrate in Kaunisvaara, Sweden, where the Company expects to exploit two magnetite iron ore deposits, Tapuli and Sahavaara. Northland has entered into off-take contracts with three partners for the entire production from the Kaunisvaara project over the next seven to ten years. The Company is also preparing a Definitive Feasibility Study („DFS“) for its Hannukainen Iron Oxide Copper Gold („IOCG“) project in Kolari, northern Finland and for the Pellivuoma deposit, which is located 15 km from the Kaunisvaara processing plant.
Forward-Looking Information
This announcement may include „forward-looking“ information within the meaning of applicable securities laws. This forward-looking information can be identified by the use of forward-looking terminology, including the terms „believes“, „estimates“, „anticipates“, „expects“, „intends“, „may“, „will“ or „should“ or, in each case, their negative, or other variations or comparable terminology. This forward-looking information includes all matters that are expectations concerning, among other things, Northland-s results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which it operates. By their nature, forward-looking information involves risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Readers are cautioned that forward-looking information is not a guarantee of future performance and that Northland-s actual results of operations, financial condition and liquidity, and the development of the industry in which it operates may differ materially from those made in or suggested by the forward-looking information contained in this press release. In addition, even if Northland-s results of operations, financial condition and liquidity, and the development of the industry in which Northland operates are consistent with the forward-looking information contained in this press release, those results or developments may not be indicative of results or developments in subsequent periods.
Contacts: Northland Resources S.A. Jonas Lundström Senior Vice President Corporate Communication +46 705 49 33 38
Northland Resources S.A. Johan Dagertun VP Business Development & Deputy COO +46 703 700 031
Northland Resources S.A. Eva Kaijser CFO +46 709 320 901
Northland Resources S.A. Petter Brunnberg Investor Relations +46 727 24 41 09
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