About Northland Resources S.A.
Northland's common shares are primary listed on the Toronto Stock Exchange (the "TSX") under the symbol NAU. Due to the Company's current financial situation, the company being under reconstruction, the TSX has decided to delist the Company's common shares effective at the close of market on the TSX March 15, 2013. In the meantime trading on the TSX is suspended. Trading is continuing, on the Oslo Bors under the symbol NAUR, on Nasdaq OMX Stockholm under the symbol NAURo and on the Frankfurt Borse under the symbol NPK.
As a Luxembourg-domiciled company with shares listed on an exchange in the European Economic Area, the Company is subject to the rules and regulations of the Commission de Surveillance du Secteur Financier. These regulations include a requirement to file information in accordance with International Financial Reporting Standards ("IFRS") as endorsed by the European Union ("EU").
Certain statements contained in this Year-End Press release and elsewhere constitute forward-looking statements. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statements were made, and readers are advised to consider such forward-looking statements in light of the risks set in the Annual Report 2011.
Liquidity and capital resources
On February 2, 2012, the Company launched an equity offering of new shares mainly to institutional investors at a rate of NOK 6.50 / CAD 1.13 per share. It closed on February 23, 2012 giving gross proceeds equivalent to USD 325 million.
At the same time an offer of a senior secured five-year bond was launched for an equivalent of USD 350 million. This offering was also fully subscribed and completed on March 6, 2012. The Senior Secured Bond issue 2017 is traded on Oslo Bors under the ticker NORES01 for the NOK 460,000,000 tranche and under ticker NORES02 for the USD 270,000,000 tranche. The final maturity date for both tranches is March 6, 2017.
Interest bearing debt as at December 31, 2012 totaled USD 358.1 million (net of deferred financing fees), up from USD 4.3 million at the end of December 2011. The Company's cash and cash equivalents as at December 31, 2012 totaled USD 53.7 million, compared to USD 38.3 million as at December 31, 2011.
During 2012, the Company passed three "cost-to-complete" tests by the independent engineer consulting firm Royal HaskoningDHV (formerly named Turgis). Following these tests the Company has drawn down a total of USD 265 million from the USD 350 million Bond Loan Facility.
In the middle of the fourth quarter of 2012, a liquidity shortfall was quantified based on a detailed preliminary budget that included remaining capital expenditure ("Capex") and operating cash flow for the next 24 months. This was due to lower than expected operating cash flow which has been considerably influenced by iron ore price estimates, USD/SEK exchange rates as well as higher than estimated costs during the ramp up. In total this amounts to USD 144 million. Additional Capex was identified, this in addition to what was previously reported at the Capital Markets Day in September 2012 where Capex of USD 956 million was presented to reach full production of both process lines. The new plan of January 2013 includes additional costs to finalize the logistic investments in Narvik and Pitkajarvi, as well as higher than anticipated costs for installation of the first and second process line. In total USD 140 million of Capex have been added to the USD 956 for the period until December 31, 2014. This is to cover the complete installation of the second process line as well as the completion of all logistic works and the required investments in the permanent solution for the tailings management facility. To cover the peak financing need, interest and fees, as well as a USD 45 million contingency, the Company initiated in January 2013 a capital raise of USD 375 million through a combined equity and bond issue.
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