presentation july2010 (1)
TRANSCRIPT
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Cautionary StatementThis PowerPoint presentation contains certain forward-looking statements within the meaning ofthe Private Securities Litigation Reform Act of 1995. We have tried, whenever possible, to identifythese forward-looking statements using words such as “anticipates”, “believes”, “expects”, ”plans”,”intends”, “potential” and similar expressions. These statements reflect our current belief and arebased on currently available information. Accordingly, such forward-looking statements involveknown and unknown risks, uncertainties and other factors which could cause the Company’s actualresults, performance or achievements to differ materially from those expressed or implied by suchstatements.
We undertake no obligation to update or advise in the event of any change, addition, or alterationto the information contained in this PowerPoint presentation, including such forward-lookingstatements. This PowerPoint presentation does not constitute an offer of the securities describedherein.
Resources Quoted in This PresentationVladimir Benes, Ph.D., Vice President of Exploration for Northland Resources Inc., is the QualifiedPerson in accordance with National Instrument 43-101 responsible for overseeing the execution ofNorthland's exploration programs and for verifying that the information presented in thispresentation is an accurate summary. Dr. Benes is a fellow member of the Australasian Institute ofMining and Metallurgy (Member #300308).
Metallurgical Test-WorkMr. Paul Marsden, VP Marketing and Corporate Development for Northland, is a member of theIMMM, a Chartered Engineer and a Chartered Scientist and is the Qualified Person as defined inNI 43-101 responsible for the metallurgical test work programs for Northland. Mr. Marsden hasverified that the results presented in this presentation have been accurately summarized from theresults reported to Northland.
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The Northland Story
• Established major iron ore province
• Projects near production
• High quality product
• Deliverable logistics
• Financially robust
• Strong management team
Developing into a major European iron ore producer
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Share Structure
• Shares are listed on the Toronto Stock Exchange (primary)
and Oslo Børs (secondary)
Share Structure*
Shares Issued: 111.0 M
Options: 10.3 M
Fully Diluted: 121.3 M
Mrk. Cap:1,207 MNOK/
$224.4 million (US)
52 Week Range:NOK 4.0 – 19.0
CDN 0.4 – 3.24
*as of 1 July 2010
Share price development (Oslo Børs)
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Top 20 Shareholders*
*(Oslo Børs), as of June 21, 2010
Rank Holding Percentage
1 7,307,500 6.60% SKAGEN FUNDS NOR Ordinary2 6,132,300 5.54% HOLBERG FUNDS NOR Ordinary3 6,100,000 5.51% TEIGEN FRODE THA Ordinary4 3,745,050 3.38% STOREBRAND FUNDS NOR Ordinary5 3,178,298 2.87% NORDNET BANK AB SWE Nominee6 3,171,234 2.87% AVANZA BANK AB MEGLE SWE Broker7 2,752,918 2.49% KLP FUNDS NOR Ordinary8 2,543,923 2.30% SHB STOCKHOLM CLIENT NOR Nominee9 1,850,000 1.67% DNB NOR SMB VPF NOR Ordinary
10 1,743,000 1.58% NORDEA FUNDS NOR Ordinary11 1,700,000 1.54% SVITHUN FINANS AS NOR Ordinary12 1,500,000 1.36% BJØRGVIN AS NOR Ordinary13 1,372,285 1.24% HQ DIRECT AB SWE Nominee14 1,335,500 1.21% SARGASSO INVEST AS NOR Ordinary15 1,237,000 1.12% SKANDINAVISKA ENSKILDA SWE Nominee16 1,230,037 1.11% SWEDBANK SWE Nominee17 1,192,200 1.08% NOCAVI AS NOR Ordinary18 1,181,610 1.07% SKANDINAVISKA ENSKIL SWE Nominee19 1,000,000 0.90% GLEFF AS NOR Ordinary20 995,237 0.90% STATOIL PENSJON NOR Ordinary
51,268,092 46.34%
Name Country of residence Account type
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Strong Management Team
Vladimir Benes, Ph.d, VP Exploration. Formerly Regional VP Corporate Development and Exploration with Barrick Gold. 20+ years
experience
Manfred Lindvall, VP Environment, Health & Safety. Formerly VP, EHS of Boliden and Lundin Mining. 34+ years experience
Patrick Foster, Director- Finance. MBA from London Business School 25+ years experience as a Director, and advisor on corporate
strategy, fund raising and investor relations
Paul Marsden, VP Marketing and Corporate Development. Expert in iron ore beneficiation, pelletizing, iron making and alternative
iron making technology. 30+ years experience
Eva Kaijser, CFO. Worked for Boliden AB, a member of Group management since 2007. Experienced as Finance and Treasury
Manager and Group Controller. 10+ years experience
Karl-Axel Waplan, President & CEO. Former President & CEO of Lundin Mining. He also had direct supervision responsibilities for
the development of Boliden's Storliden mine. 33+ years experience
Anders Hvide, Executive Chairman. Former Managing Director Metals & Mining Corporate Finance, Pareto Securities AS.
22+ years experience
Shane Williams, VP Projects. Project Manager for the Kaunisvaara PEA, and currently leads the team responsible for the DFS.
Previously Project Manager for projects in Russia as well as in Ireland for Lundin Mining.
Bert-Ove Johansson, VP Swedish Operations. Former Regional Director of Operations for Northland’s Swedish subsidiary,
Northland Resources AB, and previously held senior management roles within the international mining industry.30+ years experience
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Established Major Iron Ore Province
Pajala Shear Zone
Northland controls the
entire Pajala Shear Zone
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Projects Near Production
1. Kaunisvaara Iron Ore Project, Sweden
– Lead banks appointed for financing
– Feasibility Study to be completed by end of June 2010
– Production to commence 2012, ramping up to 5mt by 2014
2. Hannukainen Iron Ore (IOCG) Project, Finland
– Positive PEA complete on 2 mt/year production
– Evaluating pig iron nugget production (ITMk3)
– Likely to seek partner
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Kaunisvaara PEA Summary
• 3 magnetite pits; Sahavaara, Tapuli, and Pellivuoma
– To feed into a single processing facility
• Iron concentrate to be piped 18 km to existing rail line in
Finland then further transported by rail to port at Kemi
(230 km), per the PEA
• New Developments: Swedish Government has now
decided to co-finance rail all the way to the Kaunisvaara
site (press release: 1 April 2010)
• Iron concentrate will be high-grade, high-quality and
attract a premium price
• Production starting in 2012, ramping up to 5mt by 2014
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• Swedish government now in direct discussions with the
Company to co-finance rail spur from Kaunisvaara to
Finnish rail at Akasjokisuu
• Exemplifies the support from government on local and
national level
• Opportunity for Northland to reduce CAPEX predicted in
PEA
Upgrade of rail has
begun in Finland
Co-Financing of Rail Spur
Source: Northland
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Proven Exploration SuccessResource Growth
Mt
0
100
200
300
400
500
600
2005 2006 2007 2008 2009 2010
Historic M&I 43-101 Inferred 43-101
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Kaunisvaara PEA Results
• The PEA confirms that the Kaunisvaara Project is technically
feasible and financially positive.
• Subject permitting and financing production is forecast to start in
2012 and reach full capacity in 2014
NPV (8%) $393million1 Opex L.O.M. $38.64/t
IRR 21.1% Opex year 1-10 $34.04/t
Capacity 5 Mt Financing
needed
~$417million
L.O.M. 24 years Initial Capex,
total
~$617million
1 Pre-tax NPV, long term pricing $68/tonne
All in U.S.$
PEA published Sept. 2009
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High Quality Product
• Northland will produce a high grade, high quality iron concentrate
69% Fe
1.10% Si
0.18% Al203
• Low in contaminants and suitable for DR grade or blast furnace pellets production
• Northland’s concentrate will reduce Pelletizers’ production cost
MgO content can be used to offset flux additions to iron and steelmaking processes
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oxide oxide
Fet S SiO2 Al2O3 CaO P2O5 MgO TiO2
Typical Kaunisvaara 68.9 0.046 1.10 0.18 0.04 0.04 2.65 0.08
Potential Competitor Mines
Carajas PF 65.3 0.006 1.40 1.70 0.01 0.07 0.03 0.09
Carol Lake Conc 67.2 0.040 1.10 0.30 0.10 0.01 0.02 0.03
Samarco 67.2 0.003 1.10 0.30 0.10 0.07 0.02 0.03
Tubarao SSF 65.0 0.005 1.40 1.30 0.03 0.06 0.03 0.05
Comparison of competitor products
High Quality Product
Source: Northland and public documentation
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Off-take Contracts
Off take Agreement signed with Stemcor (Press Release 3 June 2010)
Deliveries of 1 mtpy of iron concentrate from Kaunisvaara
First delivery of iron concentrate planned for 2H 2012
Offtake Agreement is for an initial eight-year period
In addition, the parties have also signed a LoI, whereby
Stemcor intends to commit $50 million US of working capital
to finance the Kaunisvaara Project.
Stemcor is the world’s largest independent steel trader
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Off-take Contracts
Core markets
Asian markets
Off take MoU with Gulf Industrial Investment Co. (GIIC)
Located in the Kingdom of Bahrain,
owned by Foulath
April 2010, Foulath inaugurated
world’s first fully integrated steel
production facility in Bahrain
GIIC plans to grow from 12 Mt/y to 33 Mt/y
pellet production
New pelletizing project planned in Egypt to
commence production in 2012
(Source: GIC website, Press release 27 April 2010)
(Source: GIC website, Press release 27 April 2010)
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Deliverable Logistics- Rail
• Rail operation to be outsourced
• All investments to be undertaken by the operator
• Total costs are considered OPEX in the PEA study
• Consortium organized to support the development of the Rail transportation to port; Northland, Bombardier and VR (shared costs)
• Negotiations to be completed before finalisation of FS
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Deliverable Logistics- Port
• LOI with Havator Group and Europort Holding (operator) to develop the Kemi Bulk Terminal
• Port can take up to 58,000 dwt vessels
• MoU signed with Port of Kemi to make sufficient land available
• The Operator is responsible for building and operating the port
• The total costs for investment and port handling are considered Opex in the
PEA
Port of Kemi, Finland
Expected
terminal location
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Financeable Project
• Project bank financing:
– Societé Generale, UniCredit, West LB appointed as
lead arrangers
– Will organize a ”club syndicate”
• Off-take financing discussions well underway
• Equity
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Additional Upside in Finland
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Hannukainen PEA Results
• The PEA confirms that Hannukainen is technically
feasible and financially positive.
• Subject permitting and financing production is forecast to start in
2014
NPV (8%) $471m1 Opex L.O.M. $31.86/t
IRR 32.5% Opex year 1-10 $26.35/t
Capacity 2 Mt Financing
required
$382 million
L.O.M. 14 years Initial Capex $371 million
1 Pre-tax NPV, long term pricing $82.80/tonne
All in U.S.$
PEA published May 2010
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Classification Million
Tonnes
Fe% Cu% Au ppb
Measured107 34.2 0.17 68
Indicated18.6 33.4 0.15 52
M & I Total 125.6 34.1 0.17 66
Inferred 5.7 31.1 0.15 65
Hannukainen Mineral Resources Optimized Pit - US$1.10/dmtu and 20% Fe cut off
Underground - 20% Fe cut off
Classification Million
Tonnes
Fe% Cu% Au (ppb)
Inferred 88 31.7 0.13 41
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Element WGM Analysis PEA Analysis Difference
Net Cash Flow $988 M $1,011 M $23 M
IRR 28.8% 32.5% 3.7%
Capex $509 M $474.5 M $34.5 M
Opex $1,318 M $1,492 M $174 M
Iron Ore Price ¢114.2 /dmtu ¢123.3 /dmtu ¢8.1 /dmtu
Corporate Taxes $261 M Not Calculated
Working Capital Max $45 M Not Included
WGM Versus PEA
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WGM Versus PEA• Pricing
• Removed the 5 cents/dmtu premium
• Reduced netback by 3.1 cents/dmtu for transportation
• Effect = -5.6% IRR
• Operating Costs
• Removed the 15% contingency on operating costs = $174M reduction
• Effect = +3.9%
• Capital Cost
• Added owners costs and sustaining capital of $34.5M
• Effect = 0% IRR
• Working Capital
• Added $45M in year one (1) for working capital
• Effect = -3% IRR
• Cu/Au
• Reduced Cu/Au netback calculation which reduced revenue by $40M
• WGM operating assumptions run using the original price forecast
• IRR = 33.7% versus PEA Base Case of 32.5%.
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Hannukainen - ITmk3
• ITmk3: Iron Making Technology Mark 3 , developed by
Kobe Steel
• Hatch Engineering appointed for ITmk3 study
• 1 Mt per year nuggets potential
• Scoping Study results completed
Pig Iron nuggetsSource: Northland
(Northland press release 12 May 2010)
®
®
®
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The Northland Opportunity
• Established, major iron ore province
• Projects near production
• High quality product
• Deliverable logistics
• Financially robust
• Strong management team
Developing into a major European iron ore producer
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Anders Hvide, Executive Chairman
Karl-Axel Waplan, CEO
Eva Kaijser, CFO
Patrick Foster, Director- Finance
+44 (0)20 8943 3311
Contact:
www.Northland.eu
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Appendix A
Kaunisvaara
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Kaunisvaara Ore Bodies
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Kaunisvaara Conceptual Layout
Tapuli open-pit mineKaunisvaara process plant
Tailings pondWaste dump
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Kaunisvaara Mill – Flow Sheet
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Kaunisvaara Project
Operating Expenses
0
20
40
60
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Production Year
US
D/t
of
Co
ncen
trate
0
1 000 000
2 000 000
3 000 000
4 000 000
5 000 000
6 000 000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
Year
To
nn
es
of
Co
nc
en
tra
te
Tapuli Stora Sahavaara Pellivuoma
Opex – during L.O.M.
• Initially very low Opex per tonne
when invested capital is to be paid
back
• Opex increases as one gets deeper
in the open pits
Mill Concentrate Production
•Tapuli scheduled to be the first
mine in production – may change
in the Feasibility Study
• Full capacity to be reached in
3d production year
OPEX (FOB Kemi) & Production
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Product Pricing in $/dmt (69.5% Fe)
Product pricing based on studies by international commodity consultants
Northland Product, FOB Kemi with $5/t Freight Advantage
to comparable quality from Brazil
60
65
70
75
80
85
20092011
20132015
20172019
20212023
20252027
20292031
20332035
year
$/d
mt
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PEA Sensitivities
Kaunisvaara NPV8
USD M
IRR % Max Cash
required
USD M
Payback
years
Base Case 393 21.1 417 5.8
Increase price 20% 832 31.8 352 4.7
Decrease price 20% (47) 5.7 483 9.3
Increase Capex 20% 271 16.0 532 6.7
Decrease Capex 20% 514 27.8 303 5.0
Increase Opex 20% 153 14.1 452 6.9
Decrease Opex 20% 633 26.8 383 5.2
Increase USD/SEK 20% 520 26.1 347 5.2
Decrease USD/SEK 20% 202 14.5 523 7.0
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Aker Solutions; overall study management,
compilation of the
OPEX and CAPEX estimates
Other consultants involved:
• SRK; Geology and Resources, Mine Scheduling
• Pöyry; Infrastructure
• Aker Solutions; Processing Plant
Experienced External Consultants
- Definitive Feasibility Study:
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Appendix B
Hannukainen
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Hannukainen Flow Sheet
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Hannukainen Processing Plant
Crusher
Crushed
Ore
Storage
Plant
Conveyor
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Hannukainen Market Pricing
Base Case• Fe Concentrate
• RMG – Mid Point
• Cu Pricing – CRU
• 2014 – US $3.54/lb
• 2015 – US $3.04/lb
• 2016 – US $2.61/lb
• 2017 – US $2.21/lb
• 2018 – US $1.82/lb flat
• LOM Average US $2.11/lb
• Au Pricing – US $850/oz flat
Sensitivities• Stress Test
• Fe – US $0.83/dmtu flat
• Cu – US $1.80/lb flat
• Au – Us $500/oz
• Downside• RMG Low Case
• Upside Case• Fe – RMG High Case
• Cu – US $3.00/lb
• Au – US $1,000/oz
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Fe Concentrate Pricing
IRON CONCENTRATE PRICE
60
80
100
120
140
160
20
12
20
14
20
16
20
18
20
20
20
22
20
24
20
26
20
28
US
cen
ts/d
mtu
RMG High-Point
RMG Mid-Point
RMG Low-Point
Stress Test
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Cu Pricing
0.0
1.0
2.0
3.0
4.02
01
2
20
14
20
16
20
18
20
20
20
22
20
24
20
26
20
28
20
30
20
32
US
$/l
b
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Appendix C
Northland Management
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Executive Organization ChartPresident/CEO
Karl-Axel Waplan
VP Exploration
Mirek Benes
VP Projects
Shane Williams
CFO
Eva Kaijser
VP EHS
Manfred Lindvall
VP Communication/HR
Jonas Lundström
Corporate Secretary
Deborah Craig
VP Sw.Operations
Bert-Ove Johansson
Market Manager
Hans Nilsson
VP Business Dev.
Paul Marsden
Manager Finland
Pekka Veisto
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Project Operational Management
Project Manager
Shane Williams
Reserve/Mine
Matt BalattmanCommunity Relations
Niclas Dahlstrom
Marketing
Hans Nilsson
PMO
TnT
LogisticsHans Nilsson (Port)
Robert Naslund (Rail)
Environmentals/
Permitting
Max Smith
Infrastructure
Berndt Hedin
Kjell Johanssen
Process Plant
Emil Olsson
Bo Arvidson
Klas Stromberg
M Blattman holds a BSc in
Mining Engineering (Reno,
Nevada). His pervious role
was Corporate Mining
Manager for Camex, where
he supervised approx. 30
aggregates mines. Before
that he was a Mining
Engineers for Hecla
H Nilsson has 16 yrs experience working for LKAB
Swedish iron ore mine. He was GM of the Iron Ore Port
of Lulea and managed its upgrade to ship iron ore. He
was also Regional Sales Manager in LKAB Far East in
Singapore and Sales and Logistics Manager in Minelco
(LKAB’s Specialist Global Sales).
E Olsson was a Processing
Engineer at Boliden, having
overseen the Atik expansion
(Atik 36).
K Stromberg is supporting
project engineer for PEA and
FS at Northland and holds an
MSc Chemical and
Environmental engineering
B Hedin has 30 yrs
experience working as a Civil
Engineer, managing building
contractors for the Swedish
State
K Johansson has 30 yrs
experience working with
LKAB as an area manager for
Electrical Supervision
M Smith has an MSc in Structural and Economic
Geology and MSc in Environmental Management
and Sustainable Development. He has 10 yrs
experience as an exploration geologist, 12 yrs as
Senior Environmental Management in Europe.
Previous clients incl. European Commission, Ministry
of Environment of Estonia, various Ministries in the
Netherlands, European Council of Ministers of
Transport, and the European Environmental Agency
R Naslund was a Mine
Manager at LKAB’s olivine
mine in Greenland
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