Release Date: May 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Nordic Mining ASA (FRA:7NM0, Financial) successfully transitioned from construction to production ramp-up, marking a significant milestone.
- The company made its first shipment of garnet to The Barton Group's Rotterdam facility, testing the logistics chain effectively.
- Nordic Mining ASA plans to commence rutile production later this month, with the first shipment expected in the third quarter.
- The company has hired a new Chief Commercial Officer to assist in strategic processes and business development.
- Environmental monitoring and sustainability efforts are robust, with no deviations or breaches of permits reported in the last six months.
Negative Points
- Production volumes were lower than expected due to issues related to plant design and insufficient pump capacity.
- The ramp-up phase is riskier than construction, with ongoing challenges in debugging the process plant.
- The delays in production ramp-up have negatively impacted cash flow, postponing expected revenues.
- The company is behind its initial ramp-up plan and has not yet reached the design capacity for the plant.
- There are ongoing costs related to redesigning the production line and replacing slurry pumps, which may impact financials.
Q & A Highlights
Q: Can you clarify who is bearing the cost of the additional work related to the redesign of the production line and the replacement of the slurry pumps?
A: Kenneth Angedal, Operations Director - Engebo: We are collaborating with the EPC contractors to resolve the pump issues. The costs are structured around our NS8407 contracts, where we pay for a certain capacity and solution finalized in our plant.
Q: What were the customers' feedback on the quality of the first shipped garnet product?
A: Kenneth Angedal, Operations Director - Engebo: The quality of the product meets or exceeds the expectations in the DFS. Customers have visited several times and have not provided any negative remarks on quality.
Q: Is the facility reliable now after the challenges experienced?
A: Kenneth Angedal, Operations Director - Engebo: We have found a steady-state solution for a reliable plant. We are upgrading pumps and continuing our ramp-up, prepared to address any challenges that may arise.
Q: When will you deliver rutile products, and is the rutile quality as good as planned?
A: Kenneth Angedal, Operations Director - Engebo: We plan to ship the first rutile in the third quarter. There is no reason to doubt the quality, and we are focused on maintaining quality while increasing volume.
Q: What do you think the biggest challenges for the operation in the next two years will be?
A: Kenneth Angedal, Operations Director - Engebo: The current phase is the most risky due to uncertainty. Our focus is on delivering design capacity by year-end and maintaining quality and volume in the coming years.
Q: Could you comment on the observed rutile-garnet prices on the market?
A: Tord Meling, CFO: The rutile market is slow with no significant updates. For garnet, we have a fixed price for the next five years, despite the construction market being slow.
Q: Is there any news about the quartz project?
A: Finn Marum, CEO: We are advancing two projects, including the quartz project. We have shipped 10 tonnes of minerals to Germany for processing, and early indications are positive. Final results will be available this fall.
Q: Is there any change to the strategic direction?
A: Finn Marum, CEO: No changes yet. We maintain the current strategy, but a new strategy process is underway and will conclude this fall, potentially addressing investor questions like dividend policy.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
