Company Spotlight: Northland Resources
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Karl-Axel Waplan
President & CEO
Northland Resources
Europe’s Premium Iron Ore Miner Mines and Money, London 2012 Karl-Axel Waplan, President and CEO
Please see Cautionary Statement on last slide 4 December 2012
Mining has Commenced
4 October 2012
Karl-Axel Waplan, President and CEO at Northland (left) and the Governor of
Norrbotten, Mr. Sven-Erik Österberg set off the first iron ore blast in Kaunisvaara.
Kupari Rautuvaara Rautuoja Untested but identified targets in Kaunisvaara area
Europe’s Premium Iron Ore Miner
5
Kaunisvaara is on-track to start production in the end of November 2012. Northland has material production upside from Pellivuoma, Hannukainen as well as a portfolio of approximately 20 highly prospective exploration targets
On-track for first production in Q4 2012 and first shipment in Q1 2013
Ramping up to ~4 dmtpa* in Q3 2014 High grade, low impurity iron ore concentrate
Kaunisvaara: Tapuli and Sahavaara, Sweden (100%) 1
Pellivuoma, Sweden (100%) – DFS completion targeted in early 2013
Hannukainen, Finland (100%) – DFS completion targeted in early 2013
Potential Production upside 2
Rail Road Cities and Communities Kaunisvaara Project Mineral Deposits
Existing Mines
Narvik
Gällivare Kolari
Pajala
Rovaniemi
Luleå Oulu
Tornio Kemi
Tapuli Sahavaara
Kiruna
Norway
Sweden
Finland
Norway
Sweden Finland
Pellivuoma Hannukainen 2 2
1
* Dry million tonnes per annum
Extensive Exploration Targets 3
3 3
6
A Differentiated Investment Opportunity
Outlook for iron ore market remains attractive
Benefits of partnering
with high quality suppliers/
contractors based
regionally
On-track to reach production in
Q4 2012
High quality iron ore concentrate
expected to achieve a
significant price premium
Significant upside potential
from approximately 20 highly
prospective exploration
targets
Existing infrastructure
and skilled workforce in an
established mining region
Blue-Chip Management
team has experience developing
mines
Listed in Toronto and Oslo
Share Price Development
Stock Symbol Toronto Stock Exchange / Oslo Børs NAU / NAUR
Current Share Price* CAD 0.75/ NOK 4.16
Indices MSCI NORWAY INDEX
Shares issued 514,178,899
Options 12,660,000
Warrants (Standard Bank) 1,697,995
Fully diluted 528,536,894
Market Cap* CAD 385.6m/ NOK 2,151m (USD 373.2m)
52 week trading range* CAD 0.56 – 2.05 NOK 3.35 – 12.45
Bonds Oslo Børs NORES01 / NORES02
Share Overview Toronto,
NAU
Oslo, NAUR
7 * Market Cap based on closing prices on November 13, 2012 on TSX and OSL
Shareholders and Analysts
Rank Holding % Institution 1 49,245,906 9.6 Avanza Bank AB (Custodian bank)
2 35,232,269 6.9 Deans Knight Capital Mgmt
3 29,950,130 5.8 Handelsbanken, SWE+FIN (Custodian)
4 24,048,741 4.7 Nordnet Bank (Custodian bank)
5 22,481,088 4.4 Henderson Global Investors
6 16,750,361 3.3 SEB, SWE-FIN (Custodian bank)
7 15,318,352 3.0 Swedbank (Custodian bank)
8 12,885,284 2.5 Pohjola Bank
9 11,965,814 2.3 Holberg Funds
10 11,900,000 2.3 Kommunal Landspensjon
11 10,842,188 2.1 DNB Funds
12 10,551,842 2.0 Investec Asset Management
13 10,300,000 2.0 Fondsfinans Spar
14 8,140,000 1.6 Texas Teachers
15 6,785,400 1.3 Finnish Industry Investment
∑ 276,397,375 53.8
Analyst coverage / Recommendation
8 Northland compiled data using internal sources, Oslo Børs and VPS as of November 2012
Arctic Securities / Buy Kenneth Sivertsen
Credit Suisse / Neutral Nathan Littlewood
DnB NOR Markets / n.a. Sampsa Karhunen
First Securities / no recomm. Henrik Madsen
Goldman Sachs / Buy/attractive Fawzi Hanano
GMP Sec / Buy Matt Fernley
Handelsbanken / Accumulate Fredrik Agardh
Haywood Sec. / Sector outperf. Colin Healey
Ocean Equities / no recomm. Adam Lucas
Morgan Stanley / Overweight Eric Zaunscherb
Nordea / Hold Johannes Grasberger
Pareto Sec / Buy Thomas Aarrestad
SEB Enskilda / Buy Harald Hornes Øyen
Société Générale / Buy Abishek Shukla
TD Securities / Hold Craig Miller
Shareholders
From Bog to Mine in Two Years
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October 2011
October 2010
September 2012
Recent Development in Kaunisvaara
10 Kaunisvaara Process Plant beginning of November 2012
Top left, the first blast for iron ore in Tapuli. The primary crusher and the conveyor belts started in November and next – the commissioning of the process plant.
Strong Logistical Chain
27 11
Overview of the Pitkäjärvi trans-loading terminal, (mid-September 2012)
Cool, local design on the trucks
Storage facilities in Pitkäjärvi will be heated
Local rail tracks are now connecting the terminal with the national rail network
Spiral Discharge System
27 12
Rail cars are being manufactured in Kiruna
Spiral discharge system will be used at the Port of Narvik
100% controlled Fagernes Terminal will Handle Cape-size Vessels
27 13
Benefitting from Existing Transportation and Logistics Network
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Well-maintained, existing infrastructure, with good accessibility
SEK 1.3 bn will ensure the capability of existing 150 km public road from Kaunisvaara to Pitkäjärvi
Swedish Transport Administration expected to grant dispensation for 90 tonne trucks
New trans-loading terminal at Pitkäjärvi will provide access to railway
1
Roadway
Port Authority agreement for use of existing port Northland is constructing a new iron ore terminal
with heated storage facility 10 million tonnes capacity Uncongested port can take Capesize vessels
and is ice-free all year round
3
Seaport (Narvik)
Existing 226 km Malmbanan “the Ore Railway” has capacity to meet projected demand
Railway owned by Swedish state and is “open access”, requested four slots have been granted
SEK 1.3 bn will be invested by the Swedish Government to upgrade and increase capacity
Railway
2
2
1 3
Port of Narvik
Kaunisvaara
Pitkäjärvi
Sweden
Finland
Pajala
Luleå
Narvik
Kolari
Trucking Route Rail Route
km 0 50 100 25
Norway
Building a Strong Corporate Culture
15
Technology can be copied and used elsewhere. However, it is the unique composition of individuals in a company that
creates competitiveness.
Northland offers a unique pioneering spirit We have room for new ideas
Many career paths encourage self-development Tough challenges that require skills and personal drive
Support from Central Government
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“Mining is for Sweden what oil is for Norway”
Sweden’s Prime Minister, Mr. Reinfeldt
“… we are working in parallel with a study on how the logistics solution can
be solved in short as well long term”
Mrs. Elmsäter-Svärd, Minister for Infrastructure Ministry of Enterprise and Energy, on the probability of a railway to Kaunisvaara
”... vi arbetar parallellt med att se hur transportlösningen ska se ut på såväl kort som lång”, infrastrukturminister Catarina Elmsäter-Svärd
”Gruvnäringen är för Sverige vad oljan är för Norge”, statsminister Fredrik Reinfeldt
A Stable and Thriving Local Community
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600 new homes will
strengthen the Pajala
municipality – creating a stable and
thriving local community
NSD, Sep 6, 2012
Hbwebben.se, Sep 11, 2012 NSD, Sep 6, 2012
Production to Reach 4 dmtpa in Q3 2014
27 18
Tapuli mine and Kaunisvaara plant:
– On track to start production in November 2012 and make first customer shipments in Q1 2013
– Production target 2013: 1.4 dmt1)
– to reach 4 dmtpa2) in Q3 2014
Sahavaara production will commence in late 2016, while Tapuli production is scaled down
Potential production upside from development of Pellivuoma, Hannukainen and additional exploration properties
Production Pipeline
Tapuli Sahavaara
Kaunisvaara
Million tonnes Upside potential from Pellivuoma, Hannukainen and exploration properties
1)Dry million tonnes, 2) Dry million tonnes per annum
0
1
2
3
4
5
2013 2014 2015 2016 2017
Kaunisvaara Concentrate – Quality Leader
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Northland
Low silica and alumina content lead to lower flux additions, less slag and lower energy consumption
Off-take Agreements for 100% of Production
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Partner Agreement details
Agreement signed November 2010 for delivery of up to ~3 mtpa of iron ore pellet feed for at least 10 years
Pricing to take into account the high product quality
The parties will co-ordinate and co-operate in marketing and sales activities
Agreement signed October 2010 for delivery of ~1dmtpa of magnetite concentrate over 7 years
Pricing to take into account the high product quality
Agreement signed in June 2010 for delivery of ~1 mtpa of magnetite concentrate for 8 years from 2012
Pricing to take into account the high product quality
Offtaker commitment to Northland is evidenced by financial commitments from Standard Bank (USD 40m Cost Overrun Facility) and Stemcor (Letter of Intent signed for USD 50m)
Phase 2 of our Growth Strategy – Pellivuoma
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Located approximately 15 km west of Kaunisvaara
The deposit has the potential to make a significant contribution to the resource tonnage of the Kaunisvaara area
Potential scenarios include an increase in the production of high grade concentrate, or an extension of the life of the Kaunisvaara operation in combination with an increase in production
Definitive Feasibility Study is underway and is expected to be completed early 2013
Photos: Erik Karlsson
Phase 2 of our Growth Strategy – Hannukainen
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Brownfield project located in Northern Finland
Open pit mine operated by Rautaruukki and Outokumpu during the 1970s and 1980s
Planned production rate of 2 million tonnes per annum of 68% Fe iron ore concentrate
Copper/gold concentrate by-product will be a major revenue contributor
Definitive Feasibility Study completion scheduled for the beginning of 2013
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Funded to Reach Production
On-track to reach
production in Q4 2012
First production in November 2012
Expected positive cash flow as of end of Q2 2013
High-quality concentrate shipped to customers in Q1 2013
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