Nordic Mining held an extraordinary general meeting on Tuesday, October 13, at which the chairman told shareholders the company has so far been unable to secure sufficient short term liquidity despite extensive efforts with bondholders, shareholders and other stakeholders. The board is still exploring a solution for its immediate liquidity needs, but said it has very limited time, and that if no solution is found its only remaining option will be to initiate bankruptcy proceedings. All resolutions were passed, giving the board broad authority to implement a solution quickly.
The company had already announced on September 22 that a comprehensive financial restructuring of the group is required to complete the ramp up of the Engebo rutile and garnet project. Its second quarter reporting described an immediate liquidity shortfall, a more conservative production profile after a ramp up review, and a search for $10 to 15 million to fund operations into November.
The financial crisis sits awkwardly beside operating progress. On October 11 the company reported third quarter rutile production up 74 percent quarter on quarter to 2,190 tonnes, with garnet up 10 percent to 11,161 tonnes, a story covered here on October 12. Engebo is Norway’s first greenfield mine in decades and one of very few natural rutile producers globally, with garnet output unique in Europe.
Regulatory risk compounds the funding problem. Norway’s Supreme Court has found the permits for tailings disposal in the Fordefjorden invalid for insufficient reasoning, although operations continue while a temporary permit is assessed. A restructuring that fails would leave the project’s permits, workforce and European titanium feedstock ambitions in the hands of an administrator.