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Nordic Gold shares shine as it provides Laiva mine production update

The firm has produced 145.3 kilograms of dore (4,100.22 ounces of gold) since the first pour on November 30
A gold pour
A gold pour

Shares in Nordic Gold Inc (CVE:NOR) surged as it updated on the restart of the Laiva mine in Finland, which saw a first gold pour on November 30 last year.

Since that date, the company has produced a total of 145.3 kilograms of dore (4,100.22 ounces of gold), the Vancouver-based company said in a press release Wednesday.

READ: Nordic Gold expects to produce 67,000 ounces this year, as the Laiva mine in Finland comes into its own

Giving greater detail, the miner said that 38.5kg dore were produced at the first pour (1,028.91oz of gold) and 78kg of dore (1,981.3oz gold) was produced in December 2018.

That resulted in a total 2018 production of 116.5kg of dore (3,010.2 oz of gold). To date, production in 2019 is 39.7kg of dore (1,090oz).

"The team at the mine has done an excellent job of restarting the mine. We now need to work towards building a profitable business," said Michael Hepworth, the president and CEO of Nordic, said.

"The next few months will be critical as we ramp up production. As with any mine start up there are many adjustments required to optimise performance and it will be several months before we reach optimal performance."

Nordic also said today that processing operations were shut down for planned maintenance.

"Certain parts of the mill liners were unavailable at start up, however it was decided to press ahead and produce gold. This decision was made to improve cash flow and a maintenance shutdown was planned accordingly. Gold sales provided $5,172,323 of additional cash."

In the same release, the company announced that David Forest had resigned as a director to avoid potential conflicts with other activities. Nordic thanked him for his services and wished him well in his future endeavors.

The mine was acquired by Nordic already built and operational, but losing money. Exactly why it was losing money has been a matter of some debate over the past couple of years.

Nordic agreed to put up some much-needed cash and secured 10% and exclusivity on any other transactions. From there, Nordic moved on to acquiring 60% for US$20 million, and finally 100% via a share-based transaction.

Current estimates are that before Nordic came in, the project had already had €220 million spent on it, a figure which makes the US$98 million NPV (net present value) seem somewhat tame, as Nordic Gold's Michael Hepworth has pointed out.

"At one point, in bull market conditions, this mine generated a market capitalization for its owners of €500mln. In a gold bubble, it could go up to those sorts of levels again."

Shares in Toronto added over 18% on Wednesday, to stand at $0.13.

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