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Northland Resources S.A.: New and Important Information from the Consortium

Jun 3 2013 12:00AM

Marketwire

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LUXEMBURG, LUXEMBURG -- (Marketwired) -- 06/03/13 -- Northland Resources S.A. (OSLO: NAUR)(FRANKFURT: NPK)(OMX: NAURo) (together with its subsidiaries, "Northland" or "the Company") announces comments by the Consortium, consisting of Peab, Metso, Folksam and Norrskenet concerning the effects of a potentially negative outcome of the bondholders meeting on June 4, 2013.

With reference to the press releases issued on May 29 and 30, 2013, wherein it was announced that a consortium consisting of Folksam, Metso Corporation, Norrskenet AB and Peab AB (collectively the "Consortium") would invest in a bond offering by Northland. Following a significant commitment by the Consortium, Northland was able to re-launch and successfully close its USD 335 million bond offering, thereby securing a long-term financial solution for the Company. The refinancing is subject to the existing bondholders' approval. The bondholders meeting will decide on the matter Tuesday 4 June, 2013.

Northland has been informed by the Consortium members what the course of action will be in the event that the bondholders do not approve the proposed refinancing plan.

Where no other viable financing alternatives exist, should the bondholders decide not to approve the proposed refinancing, the members of the Consortium will immediately respond as follows:

-- Metso and PEAB, the Company's two key suppliers, have carefully assessed the various alternatives and concluded, should the proposal not be approved, the Company's stakeholders would likely have no other alternatives than to have the Company liquidated in order to minimise losses. Metso and PEAB are not prepared to enter into any new negotiations. In the event the bondholders do not support the current proposal, Metso will take any and all actions available to it in order to protect its position and minimise its potential losses. PEAB will not under any circumstances enter into any new supplier agreement than what is put forward in the refinancing proposal.-- LKAB, one of the world's leading iron ore producers, is through its ownership in Norrskenet committed to support the new Board of Directors of Northland Resources S.A. with members of a new technical committee that will be formed by the Consortium members and that will assist the Board in important technical and operational issues, in order to ensure a sound and efficient operational development of Northland's projects. Norrskenet or LKAB will not cooperate with any alternative that is not serious and industrially sound.-- Folksam is an active investor in the Nordic region. In the event that the bondholders do not approve the refinancing plan, Folksam will not be part of an alternative that is value destructive for all stakeholders in addition to creating uncertainty for the workers of Northland, suppliers and local community.



Arctic Securities ASA and Pareto Securities AS are acting as the Company's financial advisors.

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 produces high-grade, high-quality magnetite iron concentrate in Kaunisvaara, Sweden, where the Company will 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 ability to meet its continuous disclosure and MCTO obligations, the likelihood of Northland rectify its default under Canadian Securities laws, 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:
Arctic Securities ASA
Arctic Fixed Income Sales
+47 2101 3060

Pareto Securities AS
Pareto Fixed Income Sales
+47 2287 8770
www.northland.eu





Source: Marketwire