|By Marketwired .||
|June 30, 2014 03:26 AM EDT||
LUXEMBOURG, LUXEMBOURG -- (Marketwired) -- 06/30/14 -- Northland Resources S.A. (OSLO: NAUR)(FRANKFURT: NPK)(OMX: NAURo) - (together with its subsidiaries "Northland", "NRSA" or the "Company") announces a change in strategy and initiates an informal reorganization due to low iron ore prices. Focus is to maximize operational flexibility.
Northland's long term strategy has since 2010 been to develop Kaunisvaara to reach a yearly production of approximately 4 million tonnes of iron ore concentrate, with two processing lines in use. Over the last years, all Northland's major business decisions have been made in the context of implementing this strategy. Such decisions include staffing and organizational setup, capital expenditures, key supplier contracts and financing.
The production from the first processing line has gradually improved and during April and May the production reached targeted levels both in terms of volumes and cash costs. However, a significant reduction in world market iron ore prices in 2014 from around $135/dmt in the beginning of the year to a low point of $89/dmt has made the Board of Directors come to the conclusion that a change in the Company's strategy is necessary under the prevailing challenging circumstances.
New strategy and operational implications
Northland's new strategy is based on reaching maximal flexibility in operations and cost structure to be able to cope with the high volatility of world iron ore prices. Through a focus, at this point, on production from the existing processing line significant cost reductions can be made, while simultaneously preserving ore resources and retaining long-term flexibility.
With the new strategy, Northland will complete construction of the second processing line but not take this line into production at current price levels. As remaining expenditure to complete the second processing line is limited, this will enable the Company's to maintain optionality to ramp up when market conditions improve. Until then, the strategy gives Northland the opportunity to preserve liquidity and at the same time avoid depleting Reserves & Resources in periods of low prices.
With the new strategy fully implemented, the Company is targeting to reach breakeven cash flow on an operating level at close to prevailing iron ore price even when operating only one processing line.
As a consequence of the new strategy, significant changes to the operations of Northland are required. The lower cost level is expected to be achieved through organizational changes and productivity improvements in combination with a review of certain commercial supplier contracts. At this stage it is uncertain how employees will be affected by this change. The Company has initiated a dialogue with the relevant labor unions.
In addition, the Company will seek to improve terms and conditions under its off-take agreements. As a part of such improvements, Northland has signed a non-binding Memorandum of Understanding with Mitsubishi Corporation RtM International for deliveries of a significant part of the production.
The Company has also entered into a non-binding Term Sheet with a new Strategic Partner. If materialized, a final agreement with the Strategic Partner would allow Northland to source iron ore for the second processing line starting in 2016 and continuing until 2018/2020 maintaining an annual production of 4.4 - 5.4 million dmtpa. Upon expiry of the sourcing agreement the second processing line can be supplied with ore from the Sahavaara deposit. An agreement with the Strategic Partner is expected to result in a higher operating cost compared to own mining, but would enable postponing Capex of approximately USD 150 million required to start production from the Sahavaara deposit. Ramping up production, whether on Strategic Partner ore or based on development of Sahavaara, would nonetheless require an improved market for iron ore or seeing the effects of the new strategy to reduce the cost of production.
Suspension of payments and informal reorganization
To implement the new strategy while preserving liquidity, Northland has today decided to temporarily suspend payments to its suppliers and creditors. The company will initiate an informal reorganization procedure in which creditors and suppliers will be presented with a proposal for a settlement. The process and procedures regarding temporary suspension of payments will be managed by attorney Lars Soderqvist who also managed Northland's formal reorganization in 2013. The new strategy will also affect the capability to keep the repayment time plan for the creditors set up as part of the reorganization in 2013.
The current market environment with low iron ore prices does not provide the basis to secure viable long term financing. Accordingly, the Company's financing process has not been concluded on schedule but will remain an area of focus as the new strategy is implemented. Key stakeholders including major bond holders and key suppliers have indicated their support for the new strategy.
"The dramatic weakening of the world iron ore prices has led Northland to revisit its strategy, despite the positive operational development we've seen during the past months with the existing operations. With the new strategy that the Board has decided on, Northland achieves a much higher flexibility which we see to serve best the long term interests of all our stakeholders. In current market conditions, we will be able to preserve liquidity and strategic assets allowing Northland to maximize production when iron ore prices are higher", said Olav Fjell, Chairman of the Board.
"The new strategy means that Northland needs to go through painful but necessary changes. This will affect the organization and how we run our daily operations. Our task ahead is to secure that Northland has a viable future even in challenging market conditions", said Johan Balck, CEO.
"Under current circumstances, I believe an informal reorganization of the Company can be successful. Through an informal reorganization it is possible to reach the best available solution for all creditors. If the informal process should not progress as expected the Company will always have the option to at a later stage enter into a formal reorganization, in order to increase protection of the company's assets for the long-term benefit of all its creditors", said attorney Lars Soderqvist.
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 has also finalized a Definitive Feasibility Study ("DFS") for its Hannukainen Iron Oxide Copper Gold ("IOCG") project in Kolari, northern Finland.
This announcement may include "forward-looking" information within the meaning of applicable securities laws. This forward-looking information can 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. This forward-looking information includes 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. By their nature, forward-looking information involves risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Readers are cautioned that forward-looking information is not a guarantee 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 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 information contained in this press release, those results or developments may not be indicative of results or developments in subsequent periods.
WebRTC is an up-and-coming standard that enables real-time voice and video to be directly embedded into browsers making the browser a primary user interface for communications and collaboration. WebRTC runs in a number of browsers today and is currently supported in over a billion installed browsers globally, across a range of platform OS and devices. Today, organizations that choose to deploy WebRTC applications and use a host machine that supports audio through USB or Bluetooth can use Plantro...
Apr. 26, 2015 12:00 PM EDT Reads: 1,913
ProfitBricks has launched its new DevOps Central and REST API, along with support for three multi-cloud libraries and a Python SDK. This, combined with its already existing SOAP API and its new RESTful API, moves ProfitBricks into a position to better serve the DevOps community and provide the ability to automate cloud infrastructure in a multi-cloud world. Following this momentum, ProfitBricks has also introduced several libraries that enable developers to use their favorite language to code ...
Apr. 26, 2015 12:00 PM EDT Reads: 1,708
What exactly is a cognitive application? In her session at 16th Cloud Expo, Ashley Hathaway, Product Manager at IBM Watson, will look at the services being offered by the IBM Watson Developer Cloud and what that means for developers and Big Data. She'll explore how IBM Watson and its partnerships will continue to grow and help define what it means to be a cognitive service, as well as take a look at the offerings on Bluemix. She will also check out how Watson and the Alchemy API team up to off...
Apr. 26, 2015 12:00 PM EDT Reads: 1,869
The IoT Bootcamp is coming to Cloud Expo | @ThingsExpo on June 9-10 at the Javits Center in New York. Instructor. Registration is now available at http://iotbootcamp.sys-con.com/ Instructor Janakiram MSV previously taught the famously successful Multi-Cloud Bootcamp at Cloud Expo | @ThingsExpo in November in Santa Clara. Now he is expanding the focus to Janakiram is the founder and CTO of Get Cloud Ready Consulting, a niche Cloud Migration and Cloud Operations firm that recently got acquir...
Apr. 26, 2015 12:00 PM EDT Reads: 1,678
The 17th International Cloud Expo has announced that its Call for Papers is open. 17th International Cloud Expo, to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, APM, APIs, Microservices, Security, Big Data, Internet of Things, DevOps and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding bu...
Apr. 26, 2015 12:00 PM EDT Reads: 2,329
As enterprises move to all-IP networks and cloud-based applications, communications service providers (CSPs) – facing increased competition from over-the-top providers delivering content via the Internet and independently of CSPs – must be able to offer seamless cloud-based communication and collaboration solutions that can scale for small, midsize, and large enterprises, as well as public sector organizations, in order to keep and grow market share. The latest version of Oracle Communications U...
Apr. 26, 2015 11:30 AM EDT Reads: 4,429
SYS-CON Media announced today that @ThingsExpo Blog launched with 7,788 original stories. @ThingsExpo Blog offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. @ThingsExpo Blog can be bookmarked. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago.
Apr. 26, 2015 11:00 AM EDT Reads: 2,573
As Marc Andreessen says software is eating the world. Everything is rapidly moving toward being software-defined – from our phones and cars through our washing machines to the datacenter. However, there are larger challenges when implementing software defined on a larger scale - when building software defined infrastructure. In his session at 16th Cloud Expo, Boyan Ivanov, CEO of StorPool, will provide some practical insights on what, how and why when implementing "software-defined" in the dat...
Apr. 26, 2015 11:00 AM EDT Reads: 1,633
SYS-CON Events announced today that robomq.io will exhibit at SYS-CON's @ThingsExpo, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. robomq.io is an interoperable and composable platform that connects any device to any application. It helps systems integrators and the solution providers build new and innovative products and service for industries requiring monitoring or intelligence from devices and sensors.
Apr. 26, 2015 11:00 AM EDT Reads: 2,105
Wearable technology was dominant at this year’s International Consumer Electronics Show (CES) , and MWC was no exception to this trend. New versions of favorites, such as the Samsung Gear (three new products were released: the Gear 2, the Gear 2 Neo and the Gear Fit), shared the limelight with new wearables like Pebble Time Steel (the new premium version of the company’s previously released smartwatch) and the LG Watch Urbane. The most dramatic difference at MWC was an emphasis on presenting we...
Apr. 26, 2015 11:00 AM EDT Reads: 2,117
Chef and Canonical announced a partnership to integrate and distribute Chef with Ubuntu. Canonical is integrating the Chef automation platform with Canonical's Machine-As-A-Service (MAAS), enabling users to automate the provisioning, configuration and deployment of bare metal compute resources in the data center. Canonical is packaging Chef 12 server in upcoming distributions of its Ubuntu open source operating system and will provide commercial support for Chef within its user base.
Apr. 26, 2015 11:00 AM EDT Reads: 1,870
The world's leading Cloud event, Cloud Expo has launched Microservices Journal on the SYS-CON.com portal, featuring over 19,000 original articles, news stories, features, and blog entries. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. Microservices Journal offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. Follow new article posts on T...
Apr. 26, 2015 11:00 AM EDT Reads: 2,117
SYS-CON Events announced today that Litmus Automation will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Litmus Automation’s vision is to provide a solution for companies that are in a rush to embrace the disruptive Internet of Things technology and leverage it for real business challenges. Litmus Automation simplifies the complexity of connected devices applications with Loop, a secure and scalable clou...
Apr. 26, 2015 11:00 AM EDT Reads: 1,758
In 2015, 4.9 billion connected "things" will be in use. By 2020, Gartner forecasts this amount to be 25 billion, a 410 percent increase in just five years. How will businesses handle this rapid growth of data? Hadoop will continue to improve its technology to meet business demands, by enabling businesses to access/analyze data in real time, when and where they need it. Cloudera's Chief Technologist, Eli Collins, will discuss how Big Data is keeping up with today's data demands and how in t...
Apr. 26, 2015 11:00 AM EDT Reads: 1,478
So I guess we’ve officially entered a new era of lean and mean. I say this with the announcement of Ubuntu Snappy Core, “designed for lightweight cloud container hosts running Docker and for smart devices,” according to Canonical. “Snappy Ubuntu Core is the smallest Ubuntu available, designed for security and efficiency in devices or on the cloud.” This first version of Snappy Ubuntu Core features secure app containment and Docker 1.6 (1.5 in main release), is available on public clouds, ...
Apr. 26, 2015 10:45 AM EDT Reads: 1,434