Northland Resources S.A.

Northland Resources S.A.

May 29, 2013 18:22 ET

Northland Expected to Complete Bond Offering Following a Significant Nominal Commitment of USD 108 million from a New Consortium

LUXEMBOURG, LUXEMBOURG--(Marketwired - May 29, 2013) - Northland Resources S.A. ((OSLO:NAUR) (FRANKFURT:NPK) (OMX:NAURo) - together with its subsidiaries "Northland", or the "Company") announces that the previously cancelled bond offering (the "Offering") is expected to be completed, following a significant new commitment of USD 108 million from a new consortium (USD 100 million subscription post original issue discount of 7 percent).

With reference to the press release dated May 24, 2013, wherein Northland informed that the previously announced bond offering was not fully subscribed and would consequently be withdrawn, and the press release dated May 28, 2013, wherein Northland announced that it was in advanced discussions with a new investor group, the Company is now pleased to announce that it has received a significant new commitment for a subscription in a bond on materially the same terms as those announced in the press release dated May 20, 2013. The commitment comes from a consortium consisting of Folksam, Metso Corporation, Norrskenet AB and Peab AB (collectively the "Consortium"). Swedbank First Securities acts as financial advisor for the Consortium.

In addition, the three existing bondholders who previously intended to subscribe for a quarter of the cancelled bond issue, reconfirms and increases their intended subscription in the Offering to at least USD 120 million. Together with the commitment from the Consortium, the Company believes it will be in a position to complete the Offering. The subscription period for the Offering will end on Thursday May 30th, 2013 at 22:00 CET for the investors to re-confirm their commitments.

As a condition for completing the subscription, the Consortium has requested certain additional legal terms, including the right to nominate four out of seven candidates (including the Chairman) to be appointed to Northland's Board of Directors. To achieve this, the Offering will consist of one bond with two tranches, where one tranche (Tranche B) is fully subscribed by the Consortium for USD 85 million nominal face amount with the right to nominate three candidates to the Company's board of directors, while the other tranche of USD 250 million will (Tranche A) will be open for subscription in the Offering and will have the right to nominate one candidate to the Company's board of directors. The other two board members will be nominated by the existing USD 370 million bonds. The Consortium has also agreed to invest for up to USD 23 million in nominal face amount of the Tranche A bonds should this be required to insure full subscription for those bonds.

These changes to the terms of the Offering, and the changes to the existing USD 370m bonds as well as the changes to the supplier credit related to Peab and Metso (as set out in the press release dated May 20, 2013), are subject to the approval by the existing bondholders (at a bondholder meeting expected to be held on Tuesday 4 June, 2013), the Administrator and certain key suppliers

The Consortium proposes that Mr. Olav Fjell is appointed as Chairman of the Board (COB). Mr. Fjell has a strong background from various relevant positions such as CEO of Statoil ASA, Chairman of the Board of the Norwegian State Railways (NSB) and most recently as CEO of Hurtigruten ASA. Mr. Fjell is also a board member of Swedbank AB and COB of Statkraft. He has previously been a Senior Partner at First Securities. Mr. Fjell is Siviløkonom from the Norwegian School of Economics in Bergen.

The Consortium has in addition already agreed upon nominating three new members to the Board of Directors.

With the contemplated transaction, the Company is expected to solve its long term funding need and the Company has requested Norsk Tillitsmann to withdraw the acceleration and enforced bank account pledge from May 24, 2013.

Arctic Securities ASA and Pareto Securities AS are acting as the Company's advisors, and as Joint Lead Managers and Bookrunners of the Offering, and Ocean Equities Ltd. is acting as Co-Lead Manager of the Offering.

Karl-Axel Waplan, President & CEO, Northland Resources S.A.

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 expects to produce high-grade, high-quality magnetite iron concentrate in Kaunisvaara, Sweden, where the Company expects to 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.

Cautionary Statement

This press release may include "forward-looking" statements and "forward-looking information" within the meaning of applicable securities laws. These forward-looking statements and forward-looking information may 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. Forward-looking statements and forward-looking information include all matters that are expectations concerning, among other things, Northland's results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which it operates, projected capital and operating expenditures, production and price forecasts, assumed exchange rates and the company's anticipated funding requirements and sources thereof. By their nature, forward-looking statements and forward-looking information involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Such factors include, among others, those factors discussed in the section entitled "Risk Factors" in the Company's annual information form dated March 28, 2013, and the Company's management discussion and analysis of results of operations and financial condition ("MD&A") for the year ended December 31, 2012 and as updated in this press release. Readers are cautioned that forward-looking statements and forward-looking information are not guarantees 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 statements and 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 statements and forward-looking information contained in this press release, those results or developments may not be indicative of results or developments in subsequent periods.

The distribution of this press release may be restricted by law in certain jurisdictions. The Company assumes no responsibility in the event there is a violation by any person of such restrictions. Persons into whose possession this announcement should come are required to inform themselves about and to observe any such restrictions. The Offering will only be available in the United Kingdom to persons who are both (a) qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC) and (b) persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Order). The Offering is only available to relevant persons or will be engaged in only with relevant persons.

This announcement is not for distribution, directly or indirectly in or into any jurisdiction in which it is unlawful to make any such distribution or where prior registration or approval is required for that purpose. No steps have been taken or will be taken in any jurisdiction outside of Norway or Canada in which such steps would be required. The publication of this announcement shall not under any circumstances imply that there has been no change in the affairs of the Company or that the information contained herein is correct as of any date subsequent to the earlier of the date hereof and any earlier specified date with respect to such information.

This press release is not an offer to sell, or the solicitation of an offer to buy or subscribe for securities in the United States. Securities may not be offered or sold in the United States absent registration under the U.S. Securities Act or an exemption from, or in a transaction not subject to registration. The offer and sale of any securities referred to herein has not been and will not be registered under the U.S. Securities Act or under the applicable securities laws of the United States.

This press release does not constitute an offering circular or prospectus in connection with any offering of securities of the Company. Investors must neither accept any offer for, nor acquire, any securities to which this announcement refers, unless they do so on the basis of separate documentation prepared for the purpose of such offerings. This press release does not constitute an offer to sell, or the solicitation of an offer to buy or subscribe for, any securities and cannot be relied on for any investment contract or decision.

This information is subject of the disclosure requirements according to sections 5-12 of the Norwegian Securities Trading Act (Norwegian: verdipapirhandelloven, as well as the requirements of the Luxembourgish Transparency Law.

Contact Information

  • Northland Resources S.A.
    Karl-Axel Waplan
    President and CEO
    +46 705 104 239

    Northland Resources S.A.
    Eva Kaijser
    +46 709 320 901

    Northland Resources S.A.
    Petter Brunnberg
    Investor Relations
    +46 727 244 109

    Arctic Securities ASA
    Arctic Fixed Income Sales
    +47 2101 3060

    Pareto Securities AS
    Pareto Fixed Income Sales
    +47 2287 8770