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Nordic Mines AB presents a preliminary financing solution and resolves on terms for share issues


April 28, 2014 - London

PRESS RELEASE, April 28, 2014

NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO USA, AUSTRALIA, CANADA, HONGKONG, JAPAN, NEW ZEALAND, SINGAPORE OR SOUTH AFRICA OR IN ANY JURISDICTION IN WHICH THE DISTRIBUTION OF THIS RELEASE WOULD BE UNLAWFUL

The English text is an unofficial translation of the Swedish original and in case of any discrepancies between the Swedish text and the English translation, the Swedish text shall prevail. This is not a legal document.

Nordic Mines AB (publ) ("Nordic Mines" or "the Company") presents a preliminary financing solution and resolves on terms for share issues to restart the Laiva mine and exit company reorganizations in Sweden and Finland.
The financing solution implies:

  • Target to reach a settlement of a debt write-down to EUR 15m (circa SEK 135m) with the Company's current lenders.
  • Target to reach a settlement with the suppliers including a 90 percent
    write-down of outstanding debt.
  • Cash contribution of at least SEK 150m.

Discussions with current lenders
Nordic Mines negotiates with the Company's current lenders, Unicredit Bank AG, Bank of America Merrill Lynch Intl Ltd and Finnvera Plc, to reach a settlement intended to reduce the debt level of the Company. The lenders have responded positively to a settlement which essentially involves the following:

  • Significant write-down of the existing loans to EUR 15m (circa SEK 135m), of which approximately EUR 2.5m (circa SEK 22.5m) will be converted into shares through a set-off issue. The terms for the set-off issue will be the same as for the rights issue, explained below (resulting in 750,000,000 new shares in Nordic Mines, representing circa 10 percent of the total shares outstanding if the rights issue becomes fully subscribed).
  • Remaining loans of EUR 12.5m (circa SEK 112.5m) have a term to maturity of five years and will be amortized during yeas 3-5. The interest will be accumulated and added to the debt during the first two years, followed by cash interest payment during years 3-5.

The final settlement is conditional on that the parties agree on the final contract documentation, among other things. The Board is, until the day before the record day (i.e. May 4, 2014), entitled to withdraw the rights issue. The Board also intends to utilize this option in the event that the Board's judgment is that the negotiations on the final contract documentation have not progressed satisfactorily.

Proposed composition plan
As part of the ongoing company reorganization, the Company will work to ensure that a composition is proposed regarding unsecured creditors. For all the unsecured creditors within the group, the composition would imply full cash payment of receivables up to EUR 1,000 (circa SEK 9,000) and a 10 percent payment of excess amount.

The Board resolves on terms for cash contributions through share issues of at least SEK 150m
On March 26, 2014, Nordic Mines announced that the Board has resolved, subject to the EGM's subsequent approval, to strengthen the Company both operationally and financially through share issues. On April 27, 2014 the Board resolved on the final terms for the share issues and the amendment of the articles of association as described below.

The EGM will be held in Uppsala on April 28, 2014, 11:00 am (CET). The notice for the EGM was published on March 26, 2014 and is available on Nordic Mines website, www.nordicmines.com.

Proposals for resolution etc.

7 (c) Amendment of the articles of association
The Board proposes that the EGM resolves that the paragraphs 4 and 5 in the articles of association should have the following wording.

Limits for the share capital (§ 4 in the Articles of Association)
The share capital may not be less than SEK 195,000,000 and not be more than SEK 780,000,000.

Limits for the number of shares (§ 5 in the Articles of Association)
The number of shares may not be less than 3,000,000,000 shares and not more than 12,000,000,000 shares.

7 (d) Private placement
The Board resolves on the following terms regarding the private placement to long-term investors:

  • The share capital shall be increased by a maximum of SEK 30,000,000.
  • The number of shares shall be increased by a maximum of 3,000,000,000.
  • For each new share, SEK 0.03 will be paid.

This private placement aims to enable the Board to continue to evaluate the possibility to let long-term investors, identified by the Company with assistance of their financial advisor, subscribe for shares in the Company. The Board intends to allot shares in this private placement only if the Board expects the subscription level of the rights issue to be insufficient.

7 (e) Private placement
The Board resolves on the following terms regarding the private placement to the Company's creditors:

  • The right to subscribe for shares will be limited to UniCredit AG, Bank of America Merrill Lynch Intl Ltd, and Finnvera Plc (or their related parties).
  • The share capital shall be increased by a maximum of SEK 7,500,000.
  • The number of shares shall be increased by a maximum of 750,000,000.
  • For each new share, SEK 0.03 will be paid through set-off of current debt.

7 (f) Rights issue
The Board resolves on the following terms regarding the rights issue:

  • The share capital shall be increased by a maximum of SEK 64,831,220.88 and a minimum of SEK 50,000,000.
  • The number of shares shall be increased by a maximum of 6,483,122,088 and a minimum of 5,000,000,000.
  • For each share owned on the record day, 19 subscription rights shall be obtained and 1 subscription right entitles to 1 new share.
  • For each new share, SEK 0.03 shall be paid.

If the Company concurrently with the rights issue, receives other capital (equity or debt), which together with the proceeds of the rights issue is at least SEK 150m, the increase in share capital and number of shares as a result of the rights issue shall nevertheless be a minimum of SEK 30,000,000 and 3,000,000,000 shares, respectively.

The subscription price represents a discount of circa 75 percent compared to the closing price of Nordic Mines share on April 25, 2014 on NASDAQ OMX Stockholm.

The resolution regarding the rights issue, if approved by the EGM, will also be terminated if the Company's share capital is not increased by at least the minimum amount stated above. Already paid subscriptions will in that case be repaid.

The record date at Euroclear Sweden AB for receiving subscription rights is May 5, 2014. The subscription period will be between May 8, 2014 and May 22, 2014 or such later date as determined by the Board.

Timetable for the rights issue

April 28, 2014 EGM to approve the Board's resolution on the share issues
April 29, 2014 Last trading day in shares with preferential right to participate in the rights issue
April 30, 2014 First trading day in shares without preferential right to participate in the rights issue
May 5, 2014 Record date for participating in the rights issue. Shareholders that as of this date are registered in Nordic Mines share register will receive subscription rights for participation in the rights issue
May 7, 2014 Estimated date for publication of the prospectus
May 8 - May 19, 2014 Trading in subscription rights
May 8 - May 22, 2014 Subscription period

Background and rationale
In July 2013, the Board chose to apply for company reorganization. The work during the reorganization has essentially followed the plan previously presented on the creditors' meeting. The Company has since its entering into company reorganization conducted operations based on the economic conditions given and several uncertainties.

The Company has, with assistance of the updated mineral resource and proposed actions regarding mining and milling conducted by SRK Consulting (UK) Ltd, worked out a business plan with the purpose to strengthen Nordic Mines operationally through higher grades, and more cost efficient mining and efficiency improvements in the mill. Parallel to this, negotiations with current lenders, suppliers, and potential investors, have been held in the context of reorganization and current proposed solutions are expected to enable a restart of the mining operations and implementation of the business plan.

The business plan indicates a positive cash flow over the life of mine on current gold price level. A restart of the mining operations is however entirely dependent that sufficient external funding is obtained. The Company estimates that circa SEK 150m is needed to restart the mining operations and create the right conditions for the implementation of the business plan.

The proceeds from the share issues will be used to:

  • Financing of the composition plan to the unsecured creditors.
  • Non-recurring costs of SEK 25m related to the restart of the operations.
  • Investments of SEK 30m related to the business plan immediately required by the restart of the operations.
  • Increase of working capital in association with the restart of the operations. The Company estimates that SEK 35m is required for this.
  • Liquidity reserve for unforeseen costs associated with the restart of the mining operations.

Financial and legal advisors
Evli Bank Plc is acting as financial advisor to Nordic Mines and Gernandt & Danielsson Advokatbyrå KB is acting as legal advisors.

For additional information, please contact:
Thomas Cederborg, CEO, +46 708 480 521
Jonatan Forsberg, CFO, +46 761 051 310

For more information about Nordic Mines, please visit; www.nordicmines.se

The information above has been made public in accordance with the Securities Market Act and/or the Financial Instruments Trading Act. The information was published at 08:00 am (CET) on April 28, 2014.

Nordic Mines is a Nordic mining and exploration company whose vision is to be one of the leading gold producers in the Nordics and Europe and a role model in respecting the environment. The company started mining gold in the Laiva mine in Finland in summer 2011. These gold deposits are among the largest in the Nordic region. Exploration is in progress in Finland and in Sweden. Nordic Mines was established 2005 and have barely 100 employees with head office in Uppsala, Sweden, The Nordic Mines share is traded on the NASDAQ OMX Small Cap list in Stockholm.

IMPORTANT INFORMATION
This press release does not constitute or form part of an offer or solicitation to purchase or subscribe for securities
in the United States. The securities referred to herein may not be offered or sold in the United States absent
registration or an exemption from registration as provided in the U.S. Securities Act of 1933, as amended. Nordic
Mines does not intend to register any portion of the offering of the securities in the United States or to conduct a
public offering of the securities in the United States. Copies of this announcement are not being made and may
not be distributed or sent into the United States, Australia, Canada, Hong Kong, Japan, New Zealand, Singapore
or South Africa.

This document has not been approved by any regulatory authority. This document is an advertisement and not a
prospectus and investors should not subscribe for, or purchase any securities referred to in this document, except
on the basis of information provided in the prospectus to be published by Nordic Mines on its web site in due
course.

Nordic Mines has not authorized any offer to the public of shares or rights in any Member State of the European
Economic Area other than Sweden and any other jurisdiction into which the offering of shares or rights has been
passported. With respect to each Member State of the European Economic Area other than Sweden (and any
other jurisdiction into which the offering of shares or rights has been passported) and which has implemented the
Prospectus Directive (each, a "Relevant Member State"), no action has been undertaken to date to make an offer
to the public of shares or rights requiring a publication of a prospectus in any Relevant Member State. As a result,
the shares or rights may only be offered in Relevant Member States:

(a) to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or
regulated, whose corporate purpose is solely to invest in securities;

(b) to any legal entity meeting two or more of the following criteria: (1) a balance sheet total pursuant to the
balance sheet equivalent to not less than EUR 20 million; (2) net turnover pursuant to the balance sheet
equivalent to not less than EUR 40 million; and (3) shareholders' equity pursuant to the balance sheet equivalent
to not less than EUR 2 million; or

(c) in any other circumstances, not requiring Nordic Mines to publish a prospectus as provide under Article 3(2) of
the Prospectus Directive.

For the purposes hereof, the expression an "offer to the public of Shares or Rights" in any Relevant Member State
means the communication in any form and by any means of sufficient information on the terms of the offer and
the shares or rights to be offered so as to enable an investor to decide to purchase any securities, as the same
may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State
and the expression "Prospectus Directive" means Directive 2003/71/EC, as amended, and includes any relevant
implementing measure in each Relevant Member State.

Evli is acting for Nordic Mines and no one else in connection with the rights offering and will not be
responsible to anyone other than Nordic Mines for providing the protections afforded to its clients or for providing
advice in relation to the rights offering and/or any other matter referred to in this announcement.
Evli accepts no responsibility whatsoever and makes no representation or warranty, express or implied, for
the contents of this announcement, including its accuracy, completeness or verification or for any other statement
made or purported to be made by it, or on its behalf, in connection with Nordic Mines and the new shares, or the
rights offering, and nothing in this announcement is, or shall be relied upon as, a promise or representation in this
respect, whether as to the past or future. Evli accordingly disclaims to the fullest extent permitted by law all
and any responsibility and liability whether arising in tort, contract or otherwise which it might otherwise have in
respect of this announcement or any such statement.

This press release contains forward-looking statements, which are statements related to future events. In this
context, forward-looking statements often address Nordic Mines' expected future business and financial
performance, and often contain words such as "expect", "anticipate", "intend", "plan", "believe", "seek", or "will".
Forward-looking statements by their nature address matters that are, to different degrees, uncertain and can be
influenced by many factors, including the behavior of financial markets, fluctuations in interest and exchange
rates, commodity and equity prices and the value of financial assets; the impact of regulation and regulatory,
investigative and legal actions; strategic actions; and numerous other matters of national, regional and global
scale, including those of a political, economic, business and competitive nature. These factors may cause Nordic
Mines' actual future results to be materially different than those expressed in its forward-looking statements.
Nordic Mines does not undertake to update its forward-looking statements.

You are advised to read this announcement and, once available the prospectus and the information incorporated
by reference therein, in their entirety for a further discussion of the factors that could affect the Nordic Mines'
future performance and the industries in which it operates. In light of these risks, uncertainties and assumptions,
the events described in the forward-looking statements in this announcement may not occur.

Nordic Mines AB presents a preliminary financing solution



This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Nordic Mines AB via Globenewswire

HUG#1780304

GlobeNewswire

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