NORDIC MINING
ANNUAL REPORT 2021
CONTENT
CEO’s REPORT
OPERATIONS
BOD’s REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
19
Bulk rutile prices have continued to increase
2021, following the slowdown in 2020 as result
of the Covid-pandemic, as the pigment market
remained strong over the quarter and feed-
stock demand continuing to exceed supply.
The tight supply has limited producers from
rebuilding inventories resulting in inventory
levels below seasonal norms. The strong
demand cycle for pigment is opting producers
to maintain high utilization rate. Pigment price
are now at ten-year highs after announced price
increases of up to USD 280 per tonne announced
for Q1 2022, as producers attempt to cover
increased energy and raw material cost.
in March 2022 Nordic Mining ownership in
Keliber was diluted 12.0%.
EUR 40 per share to EUR 64 per share. The fair
value assessment considers available informa-
tion related to the developments in Keliber, the
lithium project, and in particular the development
of lithium prices and lithium development
equities as described in Note 12. The fair value
of EUR 64 per share was retained for the
year-end 2021. Please see note 12 for further
information. This values the Group’s shares in
Keliber to NOK 190.5 million, which is the
carrying value as per 31 December 2021 (NOK
100.1 million) resulting in a gain on the
investment after correcting for the Group’s
participation in the share issue in 2021 of NOK
66.4 million (2020: NOK 9.3 million gain) for the
year. For details related to the Group’s fair
value assessment see Note 12.
Nordic Mining’s total assets as of 31 December
2021 was NOK 255.3 million (31.12.2020:
NOK 173.7 million), and total equity was NOK
245.7 million (31.12.2020: NOK 164.3 million).
The Group had no interest-bearing debt.
In March 2022, Keliber released the Updated
Definitive Feasibility Study (“UDFS”) for the
lithium project. The updated study confirmed,
according to Keliber, a solid financial and
technical feasibility, with significant improve-
ments in the key financials compared to the
Definitive Feasibility Study (“DFS”) from 2019.
For details of Keliber’s UDFS see Financial
Investment on page 16.
The Group’s cash and cash equivalents as of
31 December 2021 was NOK 32.1 million. The
Group remains fully funded for the continuation
of the Engebø project towards construction,
including continuation of pre-construction
work, and other Group activities, based on
current plans and forecasts. In January 2022,
Nordic Mining completed the first part of the
project financing equity for the Engebø Rutile
and Garnet Project of NOK 132.5 million from a
group of local Sunnfjord investors led by two of
the Engineering, Procurement and Construction
(“EPC”) partners for the Engebø Project.
FINANCIAL PERFORMANCE
For comparison, numbers in brackets relate to
the comparable period in 2020.
FINANCIAL INVESTMENT
Keliber lithium hydroxide
Nordic Mining remains positive to the battery
minerals segment and to the investment in the
Finnish lithium company, Keliber. Keliber
targets to be the first producer in Europe of
battery-grade lithium hydroxide. Over the last
years, Keliber has consistently increased the
resource base for its lithium project and further
updates are expected.
The Group is in the Definitive Feasibility Study
phase of the Engebø project and has, so far, no
sales revenues from operations. Reported
operating costs for the Group for 2021 was
NOK 60.7 million (NOK 42.5 million), largely
resulting from activities related to update of
the Definitive Feasibility Study for the Engebø
which was finalized in May 2021 and later
pre-construction work to advance selected
Detailed Engineering work originally part of the
UDFS construction work, as well as general
corporate expenses. The pre-construction work
undertaken in 2021 of NOK 18.0 million will to
a large extent be deductible towards the
Engebø capital expenditure of USD 203.4 million.
In 2021, the Group has capitalized costs relating
to licenses at Engebø of NOK 0.5 million
Reported net result for the Group in 2021 was
NOK 5.4 million (NOK –32.9 million), resulting
from the positive developments in the fair value
of Keliber over the financial year.
The equity contribution is structured as a loan with
conversion rights to shares in Nordic Mining ASA,
with certain obligations on specific terms and
milestones as the project development progresses.
The convertible loan will upon conversion contri-
bute as part of the equity for the project financing
package for the Engebø Project, expected to be
around USD 250 million comprising debt, equity
and potential hybrid capital or royalty. Reference
is made to Note 25, in the consolidated financial
statements for information relating to the
convertible equity contribution.
Net cash outflow from operating activities in
2021 was NOK 60.0 million (NOK 41.8 million),
largely resulting from activities to finalize
UDFS and ongoing activities to prepare Engebø
for construction. Net cash outflow from the
Group’s investment activities in 2021 was NOK
25.9 million (NOK 0.4 million), whereof NOK
24.0 million relate to the participation in the
Keliber share issue in first half of 2021,
whereof the remaining relate to capitalized
costs relating to licenses at Engebø Net cash
inflow from financing activities in 2021 was
NOK 75.7 million (NOK 53.8 million) resulting
from the share issue in February 2021. For
more information, see Note 15.
In February 2021, Keliber entered into an
investment agreement with the leading
international mining company Sibanye-Stillwater
Limited (“SSW”) for an initial phased equity
investment of EUR 30 million for approximately
30% shareholding in Keliber. In line with the
agreement the second tranche of SSWs initial
investment of EUR 10 million was closed in
September 2021, making SSW the largest
shareholder in Keliber with a shareholding of
26.7%. Following the closing of the last
Based on current forecasts and plans, the Board
considers that the Group’s 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
(NOK 2.2 million).
In the third quarter of 2021 the Group
reassessed the fair value of Keliber to from
tranches of EUR 5 million from SSW investment
