NORDIC GOLD CORP. (TSX-V: NOR) is pleased to announce that it has reached an agreement with PFL Raahe Holdings LP to provide US$7,000,000 in additional funding to enable the Company to reach production at the Laiva Gold Mine. PFL is an investment vehicle controlled by Pandion Mine Finance Fund, LP
The mine is a past producer, is fully built and fully permitted. On October 11th, Laiva received written approval for startup. Mining started on August 5th. 1stgold pour is scheduled for November 27th, 2018.
The terms of the Supplemental Tranches are as follows:
Nordic announced on September 6, 2018 that it had reached an agreement with PFL to amend additional terms and provisions of the PPF Agreement.
The parties have agreed to remove the entirety of Section 23 of the PPF Agreement, which allowed PFL to elect, in lieu of delivery of 24,000 ounces of gold (from the restart of the Laiva Gold Mine), to exchange such ‘gold delivery’ for up to 270 million common shares of Nordic (“Nordic Shares”) in increments of 100 ounces of gold equal to 1,125,000 Nordic Shares, subject to PFL restricting such exercise at any time such that it would not, following exercise, own more than 20% of the Nordic Shares.
In return for the removal of Section 23, the parties have agreed to the following:
The foregoing amendments have been given provisional approval of the TSX Venture Exchange.
The PPF Agreement includes provisions for early buy back. Nordic has advised Pandion that it intends to exercise such provisions.
Michael Hepworth, President and Chief Executive Officer said, “The gold forward sale initially enabled our small company with a market cap of around $3,000,000 to acquire a high-value, fully-built and permitted mine for around $25,000,000. The previous owners, Nordic Mines AB, invested €220,000,000 to build the Laiva Gold Mine. In addition, there is a US$155,000,000 tax loss carry-forward provision in place that the Finnish government has already approved for Nordic’s use should the company accrue taxable income.”
“Our financing options have significantly increased, now that the project is largely de-risked, and first gold is scheduled to be poured on November 27th, 2018. The PEA gives us an after tax NPV of US$69 million and a 1.7-year payback. As production is expected to be 67,000 ounces of gold in the first 12 months, this means that some debt is now an option and consequently we intend to refinance at more favorable terms. “
Nordic is already in discussion with several banks and several potential strategic investors, with regard to a refinancing. The goal is to have such financing in place by May 2019.
The Company also amended the terms of its non-brokered private placement, announced on September 6, 2018. Specifically, Nordic announced that it intends to reprice the previously announced private placement to raise up to $10,000,000 in gross proceeds. Nordic now plans to issue units consisting of one Nordic common shareand a full warrant at $0.10 per Unit. Each Warrant forming part of the Units will be exercisable for 24 months at $0.13 per share and will contain an early acceleration clause if the common shares trade above $0.25 for 30 consecutive days.
About the Company
Nordic Gold Corp. is a junior mining company with a near production gold mine in Finland. The Laiva Gold Mine is fully built, fully permitted and financed to production via a gold forward sale agreement. Production is scheduled to start in the 4thquarter of 2018.
The Company’s name was changed from Firesteel Resources Ltd. to Nordic Gold Corp. on August 9, 2018.
A recently released PEA was conducted by John T. Boyd Company of Denver, Colorado (“Boyd”).
Summary of the PEA results include:
|Model||IRR||NPV 5||Payback (Yrs)|
|After Tax wo/tax losses||36.5%||$68,965,000||2.1|
|After Tax w/tax losses||44.4%||$90,728,000||1.7|
Other Highlights include:
The PEA is preliminary in nature and includes Inferred Mineral Resources that are too speculative geologically to have economic considerations applied to them that would enable them to be categorized as Mineral Reserves. There is no certainty that PEA results will be realized. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
As previously announced, when Nordic acquired the Laiva Gold Mine, the Company was granted, €131,716,248in tax loss provisions which may be used to offset future taxes should taxable income be earned in Finland prior to expiration of the tax loss carry forwards. The tax loss provisions expire between 2020 and 2028 (see the Company’s audited financial statements for the year ended January 31, 2018 for detailed disclosure of the expiration schedule).The recognition of the tax loss carry-forwards has a material impact on the economic assessment of the Laiva Gold Mine project and are contingent upon the Company achieving taxable net income per Finnish tax laws.
Nordic Gold’s management has identified several opportunities outside of the scope of the mine plan studied in the PEA, which could further improve the mine plan and the economics of the project. Most important of these being the three additional 100% owned exploration properties close to the mine. Nordic is currently conducting magnetic surveys on all of the company’s properties. All three properties are fully permitted for exploration.
The report also identifies near mine targets for exploration as potentially 3.2 to 5.1 million tonnes grading at 1.25 to 1.45 grams per tonne. This estimate is based on drilling beneath the south and north pits at depths up to 250 m below surface and is open at depth. Further infill and step-out drilling is required to test these targets. Grade estimate is based on assuming the same weighted average grade of the measured, indicated and inferred resources reported in the Boyd report. The report also identifies a target in the eastern extension as potentially 0.85 to 3.2 million tonnes grading 1.25 to 1.45 grams per tonne. This estimate is based on three to five mineralized zones of 200 m to 300 m length, 50 m to 75 m vertical extent and 10 m width. Drilling has identified multiple mineralized zones up to 750 m from the north pit that extend to depths of at least 100 m. Grade estimate is based on intercepts of reconnaissance drilling and the weighted average grade of the measured, indicated and inferred resources reported in the Boyd report. The exploration targets are conceptual in nature as there has been insufficient exploration work to define a mineral resource and it is uncertain if further exploration will result in the target being delineated as a mineral resource. The economics of the PEA do not include these exploration opportunities.
Mineral Resources were prepared by JT Boyd (Nordic Press Release August 21, 2017).
Canarc Resource Corp. (TSX:CCM) (OTCQB:CRCUF) (Frankfurt:CAN) ann... READ MORE
Mako Mining Corp. (TSX-V: MKO) is pleased to report further posit... READ MORE
Surge Exploration Inc. (TSX-V: SUR) (OTC: SURJF) (FRA: DJ5C... READ MORE
FIORE GOLD LTD. (TSX-V: F) (OTCQB: FIOGF) is pleased to announce ... READ MORE
Marathon Gold Corporation (TSX: MOZ) is pleased to report an addi... READ MORE