Invitation to subscribe for shares in Nordic Iron Ore AB (publ) in connection with the Company’s rights issue

NIO

2INVITATION TO ACQUIRE SHARES IN NORDIC IRON ORE AB (PUBL) IN CONNECTION WITH THE COMPANY’S RIGHTS ISSUE

Investment case

• Theopportunitytoinvestinanexcitingcompanywithstrongantici-patedgrowth.

• NordicIronOreAB(publ)(“NordicIronOre”or“theCompany”)standswellpreparedtofacethenewchallengesoftheindustry.

• TheCompany’sambitionistobelistedonanappropriatetradingvenueinconnectionwiththeraisingofcapitaltofinancethecon-structionoftheminingfacility.

FACTS ABOUT NORDIC IRON ORE

History The futureThe Company today

Nordic Iron Orewas founded in 2008 as amodernminingandexplorationcompany.TheCompany’sambitionistoresumeminingop-erations at Blötberget and Håksberget nearLudvika, and to carry out exploration of theadjacentVäsmanfield.TheCompany’sexplo-ration permit and processing licence are forhistoricalminingterritory,whereironorehasbeenmined since the 16th century. InMay2015,CopperstoneResourcesABdistributedthe shares inNordic IronOre to its existingshareholders,increasingthenumberofshare-holders in the Company to just over 3,000today.

NordicIronOreiscurrentlyconductingade-finitive feasibility study (DFS), involving theoptimisationofthemine’soperationandver-ificationofoperationandmaintenancecosts.The Company has completed five of ninestages and is currentlyworking on securingthemine’sprocessingprocedures.Thisisthesinglemost importantpartof thestudy,andaimstoensurethattheCompanyhastheca-pacitytodeliverironoreinlinewiththecur-rentobjectives.TheCompany’sBoardofDi-rectorswasboostedrecentlybytheAmericanCEOofreputedconsultingfirmAppliedValue.

TheCompanyintendstocommencefullyop-erationalactivity in2019.Until then,NordicIronOrewillhavecompletedthecurrentfea-sibility study andhence haveoptimised ironore extraction in themineholdings.Accord-ingtothepresentplan,thefeasibilitystudyisplannedtobecompletedinthefourthquarterof2016.Today,theCompanyisalreadyinon-going discussionswith both equipment sup-pliersandprospectivecustomers.Inaddition,Nordic IronOre has the ambition, ahead ofthecommencementofplantconstruction,tolistitssharesonanappropriatetradingvenue.

Managing Director commentsWenowfacethenextmilestoneintheCompany’sdevelopmentand,throughthisinvitation,wishtowelcomeexistingshareholdersandotherinterestedpartiestosubscribeforsharesinthisrightsissue.Wewillusetheissueproceedstocompletethenextphaseofthefeasibilitystudycurrentlyinprogress.Withboththedropinthepriceofironoreandthechangesinthe

globalironoremarketinrecentyearstherearenewandsubstantialchallengestobeingprofitable.Asayoungandmoderncompanyintheindustry,wehavetheopportunitytoadapt the operationsinanefficientmannertothenewmarketconditions,hencegeneratingsharehold-ervalue.Wedosobyoptimising logisticsandproduction processeswithmodernsolutionstominimisetheCompany’soperatingexpenses,hencepavingthewayforastable,satisfactoryandsustainableoperatingmarginaheadoftheestimatedcommencementofproductionin2019.Inaddition,wewillfocusourproductiononhigh quality iron orewhichwebelievewilldifferentiateusfromcompetitorsandallowustochargeapremiumoverandabovethemostcommonpriceindexesforironore.Inordertofinancefutureinvestmentsintheproject,ourbeliefisthatthemarketmustexpectthepriceofironoretoriseinthelong-term.Currentironorepriceswouldhowever,basedontheinformationwehavetoday,beenoughtobecashflowpositiveifwewerealreadyinoperation.Thishypothesisistobeconfirmedthroughthefinalisationoftheongoingfeasibilitystudy.Welookaheadtothefuture,andwhatithastooffer,withtremendous

anticipationandhopethatyouwouldliketojoinusasweembarkthenextphasetobringtheseminesintoproduction.

Kindregards,

Investment highlights

Paul Marsden, Managing Director

Profit/loss items, SEK ’000 H1 2015 2014Netsales - -

EBITDA -7,135 -13,542

Operatingprofit(EBIT) -7,235 -18,528

Profit/lossafterfinancialincomeandexpense -8,171 -22,533

Profit/lossfortheperiod -8,171 -22,533

Condensed financial data

Balance sheet items, SEK ’000 H1 2015 2014Non-currentassets 107,551 98,898

Currentassetsex.cashposition 1,065 2,646

Cashposition 3,898 19,711

Total assets 112,515 121,255

Total liabilities 21,746 22,316

Total equity 90,769 98,940

Equity per share, SEK2 6,3 6.82Based on 14,510,712 outstanding shares.

1H1: January to June.

3INVITATION TO ACQUIRE SHARES IN NORDIC IRON ORE AB (PUBL) IN CONNECTION WITH THE COMPANY’S RIGHTS ISSUE

TERMS AND INDICATIVE SCHEDULE

The offer Shares in Nordic Iron Ore AB

Type of issue Rights issue

Issue terms and conditions 3:2

Size of the issue SEK 21,766,068

Price per share SEK 1.00

Terms and conditionsRecord date for shareholders with the right to subscribe in the rights issue.

Subscription/application period commences.

Subscription/application period ends.

Approximate date for when the outcome of the issue is made public.

6 November

9 November

23 November

26 November

Summary of terms and motivesNordic Iron Ore intends to use the issueproceeds from the rights issue to financeplannedconcentration tests,and tosubse-quentlyfinancetheCompany’sworkingcap-ital requirement. The Company intends toconductaset-offissueofanexistingbridgeloanofSEK3,112,501, inconnectionwiththerightsissue.TheCompany’s shareholders have pref-

erentialrightstosubscribefornewsharesinrelationto thenumberofshares theyholdontherecorddate.Foreachshareheldonthe record date, shareholders will receive

newshareswithoutthesupportofsubscrip-tionrightscanbesubmittedatSEK1.00pershare, and thismust take place during thesameperiodassubscriptionfornewsharessupportedbysubscriptionrights,i.e.from9November2015to23November2015in-clusive.This is merely a marketing document.

For comprehensive information, pleaserefer to the information memorandumavailable at www.nordicironore.se or atwww.mangold.se.

three (3) subscription rights. Two (2) sub-scriptionrightsentitletosubscriptiontoone(1)newshare.Subscription supported by subscription

rightsshallbecarriedoutbymeansofcashpaymentnolaterthan23November2015.Subscription through cash payment shalleither be carried out using the preprintedpaying-inslipaccompanyingtheissuestate-ment,orusingthepaying-inslipattachedtothespecialapplicationform.

An expression of interest to subscribe for

Nordic Iron Ore intends to produce high-grade iron ore

Iron ore is a mineral containing the element iron to such an extent that it can be used in iron and steel production. There are a num-ber of different types of iron ore that affect the processing techniques to some extent.

Hematite is the predominant iron ore mined and is usually the higher iron con-tent in the ground. This type of ore is usu-ally mined without much processing and is shipped as lump and fines to the market, direct shipping ore, with an iron content normally between 55 and 63 per cent. Magnetite ores on the other hand, is in its natural condition often of low quality. It is however easily processed to achieve high quality iron ore products with an iron

content between 66 and 70 per cent. Met-allurgical tests have demonstrated that Nordic Iron Ore will most likely produce 70 per cent magnetite concentrate, as well as a hematite concentrate with an iron con-centration just above 66 per cent. These concentrates would be supplied into a high quality market where buyers are willing to pay a premium for high-grade ore thanks to the low contamination of the iron content. In a market increasingly unable to supply high quality iron products, the Company’s assessment is that buyers, in especially Europe, the Middle East, North Africa and Asia, will have a growing need for Nordic Iron Ore’s products.

4INVITATION TO ACQUIRE SHARES IN NORDIC IRON ORE AB (PUBL) IN CONNECTION WITH THE COMPANY’S RIGHTS ISSUE

THE IRON ORE MARKET

Ironoreisoneofthemostimportantbasicmetalsusedintheproductionofbothsteelandiron.Itisthusanimportantrawmaterialine.g.machinery,carsandbuildings.Inpurefinancial terms, it is thesinglemost impor-tantmetal,withannualsalesofaroundUSD225billion.Prices of iron ore have dropped since

2011, although it ismainly the latest dropinprices thathasattracted thepublic’s at-tention. At the same time, there are ten-dencies that indicate that the protractedpricedecline isaconsequenceofa typicalbubbleeffect,andthataturnaroundiscloseat hand. Following the sharp upswing inprices that took place at the beginning ofthe2000s, investment in the ironoresec-tor increased, resulting in a sharp increaseincapacity.Aspricesrose,demandforironorealsodeclinedwhich,incombinationwithChina’sconsiderablegrowth,broughtabouta shift in demand fromWest toEast.Chi-na’s attempt to switch its economy frombeinginvestment-focusedtomoreconsum-er-focusedhas,inaddition,beenafactorinreducing global demand for most metals.Growth incountries suchasChinaand In-dia has thus markedly changed the shapeofglobaltradeinmetalstoday.Anexamplethatcanbementionedisthatsteelproduc-tion is often located in connection toma-jorironoredeposits.ForEuropeanironorecompaniessuchasNordic IronOre,accesstotransportintheformofportandrailcon-nections,aswellasaninexpensiveandsta-blesupplyofenergy,isofgreatimportance.

The future of iron oreTheInternationalMonetaryFund(IMF)pre-dictsacontinuingdropinthepriceofmet-als,includingironore,butpointsoutthatthetroughmightsoonbereached.Onthede-mandside,theChineseeconomycontinuestohavemajorimplicationsforglobalironoredemand.However,asustainedslowdowninChinamay lead toa furtherdrop inpricesin the short term.On the supply side, thelowpriceshavemeantthatmineswithhighoperationalcostshavebeenforcedtoclose.Intheshortterm,however,thereductioninsupply is not expected to be so extensiveas to have a direct impact on the price ofironore.Thisismainlybecausethelowcostof energy keeps the relative cost of pro-cessing theore low. In addition, abrighter

investmentclimateinAfrica,AsiaandSouthAmerica is expected to continue to keepsupply intact, despite the closure ofmanyhigh-costmines.According to the Interna-tional Monetary Fund, the supply-demandbalancethereforeimpliesthatthelowmetalpricesareexpectedtopersistintheshorttomediumterm.

Key factorsTakingaccountoftheexpecteddirectionofthepriceofironore,theCompanyhasiden-tifiedanumberofcriticalkeyfactorsthatitconsiderscrucial forprofitable ironoreex-

tractionoperations.TheCompany’s obser-vationsaregeneralandpertaintothemar-ketat large.Forprosperousandsuccessfuloperations,thefollowingarethusrequired:

— Proximitytothemarketoraccesstocost-efficienttransport,aswellasaccesstocompetitiveenergyprices.

— Theproductionofhigh-gradeironore,inordertobeabletoattractpremiumpricingandobtainvalue-in-usepremiums.

— Anefficientproductionprocessthatmini-misesoperationandmaintenancecostsatthemine,hencemaintainingsolidoperatingmarginsinthebusiness.

Iron ore price trend, per tonne, USD

ThetablereferstoironoreimportedfromChinawithironcontentof62percent.Source:InternationalMonetaryFund.

0

20

40

60

80

100

120

140

160

180

200

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Sourcetext:CommoditySpecialFeaturefromWorldEconomicOutlookOctober2015,InternationalMonetaryFund.

5INVITATION TO ACQUIRE SHARES IN NORDIC IRON ORE AB (PUBL) IN CONNECTION WITH THE COMPANY’S RIGHTS ISSUE

STRATEGIC POSITIONING

Thesimpleruleforprofitableironoremin-ingisthattheoperatorthatdeliversthe

oreoutofthegroundtothecustomeratthelowestcostistheonewhichultimatelywins.Thefirststage,fromtheminetorefinement,isaboutthegradeoftheore,efficientminingandtransport.Withgooddeposits,ofwhichtherearemanyinSweden,itispossibleto-day,withtherightmethods,toproduceorecostefficiently.NordicIronOreiswellawareofthechal-

lengesthattheironoreindustryfaces,andthe importance of beingwell prepared forbothupswingsanddownturnsonthemar-ket. Therefore, the Company is currentlyworking on implementing a modern busi-nessstructureequippedforfuturechalleng-es. In the Company’s view, for successfulbusinessoperations,threekeyareasneedtobeoptimised: logistics,productqualityandefficiency.Inlightofthecurrentchangesontheglobal ironoremarket,NordicIronOreismainlyworkingonoptimisingtheCompa-ny’sabilitiestomeetthesethreechallenges.Forseveralreasons,thecurrentshiftinthemarketcanthereforebeseenaspositiveforNordicIronOrebecausetheCompanyisal-readywell-positioned inall threekeyareastoday.

Product qualityNordicIronOrewillstandoutinthesteelin-dustryastheproducerofoneofthehighestqualityironoresglobally.Thisisconsideredpositive for the Company because high-gradeironoreisgenerallysoldatapremiumcomparedtolower-gradeironore.Therea-sonisthathigh-gradeironoreconsiderablyreducesproductioncostsforthesteelworksthat use ironore in their steel production.With high-grade iron ore, emissions fromthe steelworks are also reduced. Besidesfinancial advantages, high-grade iron orethus also presents environmental benefits.TogetherwiththeCompany’scost-efficientand already advanced infrastructure, therearethusexcellentconditionsforgeneratingahighoperatingmargininthebusinessthatissustainableinthelongterm.

LogisticsNordicIronOrehasanexcellentopportunitytoaccessanefficienttransportationsystemofbothrailandadeepwaterport.TheCom-panyaimstosupplycustomersthatprovideNordic Iron Orewith the biggest margins,and where they can be competitive withother suppliers. In order to do so it is im-portantwithacostefficient transportationsystem.Because ironore isnotperishable,a low price is prioritised ahead of rapidtransportation,while at the sametime thelogisticschainmustworksothatcustomersreceive their rawmaterialwhen it is to beused.Thankstothelocationofthedeposits,NordicIronOrehastheadvantageofbeingabletocapitaliseonsunkenassetsandhasthereforeeverythinginplaceforasmooth-ly functioning logistics chain.To theCom-pany’s advantage is also the fact that ironoremininginfrastructurehasbeeninplacesince 1878,when the TGOJ line betweenGrängesberg andOxelösundwas complet-ed,making itpossible to start transportingorefromtheGrängesminetothedeep-wa-ter port at Oxelösund, from which it wasforwarded,mainlytosteelworksinGermanyandtheUK.AtOxelösund,theoreisloadedontoships.TheportatOxelösundisfreeoficeallyearroundandcan,withadepthof16.5metres,alsoaccommodatethelargestfreightersthatcanentertheBalticSea.Theportcurrentlymanagesdeliveriesofirontothesteelworkslocatedadjacenttotheport,and is well prepared to manage deliveriesfromtheBergslagen ironmines.TheCom-pany’sadvanced logisticschain isthebasisfor cost-efficient transport of iron ore tocustomers, even on the other side of theglobe.

EfficiencyCombinedwithcost-efficienttransportandthe potential to charge a premium com-paredwithmost competitors, the Compa-ny’sstrength lies inanefficientproductionprocess. With the prevailing state of theminingindustry,theCompanyseessolidop-portunitiesforefficientplantandequipmentprocurement.Theconditionsbodewell forNordicIronOre’sabilitytofurtherreduceits

investmentcostsandhencestrengthentheCompany’s profitability in connection withthe planned production start-up in 2019.Also, the Company’s operating expensestendtodeclineinlinewithfurthercostre-ductions generatedby increasingly rationalproductionmethodsinthemine.Aspartofthecurrentfeasibilitystudy,pilottestshavebeen performedwith ore fromBlötberget.Based on knowledge gained from thesetests, the Company sees opportunities tofurther reduce its operatingexpenses.TheCompanyhasaclearadvantageoveralreadyoperational competitors in that it can usethelatesttried-and-testedtechnologywhenbuildinguptheLudvikamines.Thisprovidessolid opportunities in terms of choice ofefficient equipment and operational tech-niques. In addition, Sweden as a nation isfar ahead in terms of process automation,which isnowbecoming increasinglyexten-sive in the mining industry. The Companycan benefit from all the knowledge availa-ble intheSwedishmining industry,sothatitmayfromtheverybeginningselecttech-nicalsolutionsthatenableahighdegreeofautomationat itsminesandconcentrators.Hence,NordicIronOreisconsideredtocur-rentlylaythefoundationforbecomingoneofthemostprocess-efficientironoreminersglobally.

Investment opportunityIn order to achieve the set objectives andcreateanabsoluteworld-classminingoper-ation,furtherinvestmentisneeded.Forthisreason,Nordic IronOre is currently in theprocessofraisingcapital.Throughaninvestmentintheissue,exist-

ingshareholdersandothermembersofthegeneral public are being offered a uniqueopportunitytocapitaliseontheCompany’sintendedgrowthjourney.Inconnectionwithstartingconstruction

oftheminingfacility,theCompanyintendstocarryouta furthernewshare issueandwillconsiderlistingthesharesonanappro-priate trading venue at a suitable time fortheshareholders,whichwouldallowtradingliquidityintheshares.

Marketingbrochure–ThisisasummaryofandintroductiontothecompleteinformationmemorandumpreparedbytheBoardofDirectorsofNordicIronOre.ThebrochureisnotaprospectusthathasbeenapprovedandregisteredbyFinansinspektionen–theSwedishfinancialsupervisoryauthority.Wekindlyrequestthatprospectiveinvestorsfamiliarisethemselveswiththeinformationmemorandumrelatedtotheofferpriortomakinganykindof investmentdecision.TheinformationmemorandumisavailableatNordicIronOre’swebsite(www.nordicironore.se)andMangoldFondkommissionAB’swebsite(www.mangold.se).

ThesharescoveredbytheofferarenotintendedforpersonswhoareresidentsoftheUnitedStates,Australia,HongKong,Japan,Canada,Switzerland,Singapore,SouthAfricaorinanyotherjurisdictioninwhichparticipationwouldrequireaprospectus,registrationorothermeasuresthanthosethatfollowfromSwedishlaw.Thebrochuremayconsequentlynotbedistributedwithinortoanycountryoranyjurisdictioninwhichdistributionortheofferrequiressuchmeasuresorcontravenestherulesofsuchacountryorsuchjurisdiction.

Disclaimer

Financial advisor

Mangold Fondkommission ABEngelbrektsplan2SE-11434StockholmTel.:+46850301550www.mangold.se

Legal advisor

Bird & Bird Advokat KBNorrlandsgatan15Box7714SE-10395StockholmTel.:+46850632000www.twobirds.com

Nordic Iron Ore

Nordic Iron Ore ABVendevägen85ASE-18291DanderydTel.:+4624088300www.nordicironore.se

www.nordicironore.se