NORDIC MINES AB (publ) (A translation)

Year-end report 2013

Fourth quarter 2013

Net sales proceeds for gold and silver amounted to SEK 68.2 m. (SEK 76.4 m.).
Impairment losses of Property, plant & Equipment has been recorded during the quarter of SEK 535.4 m. considering the future business plan and of SEK 9.5 m. in relation to the new estimate of the mineral reserve.
Impairment losses of immaterial assets of SEK 11.5 m. has been recorded related to the capitalized exploration expenses in Sweden since the company does not intend to renew the licenses.
The company recorded an operating loss of SEK -610.5 m. (SEK -35.2 m.).
The period`s loss after tax amounted to SEK -603.3 m. (SEK -45.2 m.),
corresponding to SEK -1,77 (SEK -0,53) per share.
The period`s comprehensive income amounted to SEK -621.7 m. (SEK 40.5 m.), corresponding to SEK -1,82 (SEK 0,47) per share.
Cash and cash equivalents were SEK 28.1 m. (SEK 68.6 m.) at the end of the period.
Investments were SEK 7.3 m. (SEK 36.2 m.).
In total, 241 kilograms of gold (285 kilograms) were produced at the Laiva mine.
Since the filing for corporate reorganization, the bank consortium continues to exercise an administrative possibility to retain payments from sales of gold, which increases the risk of delayed or missed payments to other creditors, such as suppliers, authorities and employees.
On October 15, the Uppsala District Court decided that the reorganization proceedings in the Swedish companies would continue an additional 3 months.
On November 18, the Uleåborg District Court granted an extension for reorganization work until March 3, 2014.
On November 27, the new estimates of the mineral resources and preliminary estimates of the mineral reserves at the Laiva deposit were published.

Full year 2013

Net sales proceeds for gold and silver amounted to SEK 325.3 m. (SEK 247.1 m.).
The company recorded an operating loss of SEK -732.4 m. (SEK -155.3 m.).
The period`s loss after tax amounted to SEK -722.5 m. (SEK -176.6 m.),
corresponding to SEK -2.21 (SEK -3.01) per share.
The period`s comprehensive income amounted to SEK -625.9 m. (SEK -133.5 m.), corresponding to SEK -1.93 (SEK -2.28) per share.
Cash and cash equivalents were SEK 28.1 m. (SEK 68.6 m.) at the end of the period.
Investments amounted to SEK 49.5 m. (SEK 111.8 m.), including an environmental deposit of
SEK 8.1 m. in the first quarter 2013.
In total, 1,122 kilograms of gold (932 kilograms) were produced at the Laiva mine.
In January 2013, a preferential rights issue of SEK 282 million before issue costs was oversubscribed without having to utilize the warranties.
In April, the company settled its forward contract for the price of gold for the volume for the second quarter of 2013 at a cost of EUR 150,000.
In May, the company settled the total remaining balance of the forward contract for the price of gold for 65,236 troy ounces for the period July 2013 to March 2015 at a cost of EUR 1.8 million.
On July 8, 2013, Nordic Mines applied for corporate reorganization of all non-dormant companies within the Group since the subsidiary`s liquidity at the end of June 2013 was strained.
During the third quarter, a total of 44 employees in Finland were placed on temporary unpaid leave, of which 17 terminated their employment during the second half of the year. A total of 3 employees were laid off in Sweden in August.

Post balance sheet events

On January 14, 2014, the Uppsala District Court decided that the reorganization proceedings in the Swedish companies would continue an additional 3 months.
The legal proceedings initiated by a supplier during the fourth quarter were concluded and paid in January 2014.

Comments from the CEO

"Work on a corporate reorganization plan and the search for alternative financing continues"

"During the fourth quarter the company made material write-offs of Property, Plants and Equipment, which had a negative impact of SEK 575.9 m. Adjusted operating income was SEK -34.6 m., which is a slight improvement compared to the previous quarter.

In November 2013, the new estimates for the mineral resources at the Laiva mine were published. In conjunction with the preliminary economic assessment (PEA) of the mineral reserve and based on some additional assumptions, the company drafted a business plan that shows a positive cash flow for the life of the mine at Laiva. However, a restart of mining operations is dependent on a write-down of debts in any future composition negotiations and additional external financing. Thus, the search for an alternative financing also continues," opens Thomas Cederborg, CEO.

In total, 241 kilograms of gold were produced during the fourth quarter, compared to 259 kilograms during the third quarter. In total, 1,122 kilograms of gold were produced for full year 2013, compared to 932 kilograms in 2012. Since the end of July, the company has temporarily ceased mining in the mine in order to gain cost savings during the reorganization efforts. During this period, the processing plant is taking in ore from a previously mined layer, which contains a lower head grade. As of December 31, there were 608,400 tonnes of ore in stock, compared to 936,600 tons as of September 30, 2013. Processing plant throughput was 380,192 tons of ore for the quarter and 1,483,913 tons for full year 2013, compared to 1,028,980 for full year 2012.

Net sales proceeds were SEK 68.2 m. during the fourth quarter, compared to SEK 74.4 m. during the third quarter. The reduction is the result of lower production due to a slightly lower head grade. Net sales proceeds for full year 2013 were SEK 325.3 m., compared to SEK 247.1 m. the previous year. The increase is mainly due to higher production, although proceeds were negatively impacted by the declining price of gold in 2013.

The company recorded a loss of SEK -610.5 m. in the fourth quarter, compared to SEK -52.8 m. in the previous quarter. Loss for full year 2013 amounted to SEK -732.4 m., compared to SEK -155.3 m. the previous year. The loss in the fourth quarter is mainly due to impairment losses of total SEK 575.9 m. The production costs were negatively impacted by SEK 13.0 m. for accruals related to updated landscaping cost for restoring land at the Laiva mine. An impairment test resulting in a write-down of property, plant and equipment in the amount of SEK 535.4 m. in relation to the future business plan as well as of SEK 9.5 m. related to the preliminary economic assessment (PEA) of the mineral reserve. Administration costs were once again negatively impacted in the amount of SEK 10.0 m. for reorganization expenses for technical and legal support as well as in the amount of SEK 11.5 m. in relation to a write-down of capitalized exploration expenses in Sweden as the company intend to liquidate these assets. Foreign exchange rate effects were positive in the fourth quarter in the amount of net SEK 15.5 m., compared to a negative effect of net SEK 1.8 m. in the third quarter. However, operating profit/loss continued to be positively affected by cost savings in force since summer 2013, when the company temporarily ceased mining in the mine, temporarily reduced personnel costs and gained savings from relocating the crushing function.

Liquidity remained strained and amounted to SEK 28.1 m. as per December 31, 2013, compared to SEK 68.6 m. the previous year.

On November 18, 2013, Uleåborg District Court decided that the reorganization proceedings would continue an additional three months and ruled that a reorganization plan must be presented on March 3, 2014.

"The declining gold price in 2013 has negatively impacted the entire mining industry. This has also resulted in weaker interest in investing in the industry. With updated mineralization, mining methods and business plan combined with a reduced cost base, we continue our search for alternative financing," concludes Thomas Cederborg, CEO.

For further information, please contact:

Thomas Cederborg, CEO, +46 708 480 521
Susanne Andersson, CFO, +46 730 668 904

For further information regarding Nordic Mines, please connect to www.nordicmines.com

The information above has been made public in accordance with the Securities Market Act and/or Financial Instruments Trading Act. The information was published at 08.00 (CET) on October 31, 2013.

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 more the 100 employees with head office in Uppsala, Sweden, The Nordic Mines share is traded on the Nasdaq OMX Small Cap list in Stockholm.

Nordic Mines AB (publ) Year-end report 2013

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
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