Nordic Gold secures funding for Laiva mine in Finland

Pandion Mine Finance is giving Nordic Gold (TSX: NOR) an additional US$7 million in funding so that the junior can put its Laiva gold mine into production and pour first gold on November 27.

The funds are supplemental tranches to a $20.6 million gold-forward sale Nordic signed with Pandion in December 2017. Under the latest financing, Nordic will deliver an additional scheduled monthly quantity of gold at a price equal to the then current spot price, less a discount. The start date of gold deliveries has been extended to January 2020 from May 2019.

Nordic says it will try to raise US$7 million in a private placement to reduce or cancel the gold deliveries agreed to in the latest financing deal. The company also notes that chairman Basil Botha and CEO Michael Hepworth will invest an additional $200,000 in the placement.

“The gold forward sale initially enabled our small company with a market cap of around $3 million to acquire a high-value, fully built and permitted mine for around $25 million,” Hepworth states in a news release, adding that given production is expected to be 67,000 oz. gold in the first twelve months, “some debt is now an option and consequently, we intend to refinance at more favourable terms.”

Nordic, which changed its name from Firesteel Resources in August, expects the open-pit mine will produce 456,600 oz. gold over a six-year mine life. Average annual production is estimated at 75,981 oz. gold at a cash cost of $863 per oz. and all-in sustaining costs of $974 per oz.

A PEA outlined an after-tax net present value of US$69 million and a 1.7 year payback.

Laiva contains 3.79 million measured and indicated tonnes grading 1.23 grams gold per tonne for 151,000 oz. gold, and 9.03 million inferred tonnes averaging 1.53 grams gold for 445,000 oz. gold.

The mine’s previous owners, Nordic Mines AB, invested €220 million developing the Laiva mine.

In addition, there is a US$155 million tax loss carry-forward provision in place that the Finnish government has already approved for Nordic’s use should the company accrue taxable income.

Apart from the mine itself, Nordic says it has three 100%-owned exploration properties close to Laiva and the company is conducting magnetic surveys on all of its properties. It has also identified near-mine targets.