Northland Resources S.A.: Press Release of Unaudited Annual Report 2012

Northland Resources S.A.: Press Release of Unaudited Annual Report 2012 
LUXEMBOURG, LUXEMBOURG -- (Marketwire) -- 02/26/13 -- Northland
Resources S.A. (TSX:NAU)(OSLO:NAUR)(FRANKFURT:NPK)(OMX:NAURo) -  
Results of operations 
For the three months ended December 31, 2012, the Company had a
consolidated net loss of USD 5.6 million (USD 0.01 per share)
compared to a net loss of USD 34.3 million (USD 0.15 per share) for
the three months ended December 31, 2011. 
For the twelve months ended December 31, 2012, the Company had a
consolidated net loss of USD 24.8 million (USD 0.05 per share)
compared to a net loss of USD 38.1 million (USD 0.17 per share) for
the twelve months ended December 31, 2011. 
The operating loss during the three months ended December 31, 2012
was USD 20.8 million compared to a loss of USD 15.3 million for the
same period in 2011. 
The operating loss during the twelve months ended December 31, 2012
was USD 48.1 million compared to a loss of USD 28.1 million for the
same period in 2011. 
Net financial items were positive with USD 24.5 million for the 12
month period ended at December 31, 2012, compared to a loss of USD
9.6 million for the same period 2011. 
Number of employees at the end of December 2012 was 199, compared to
87 at the end December 2011. 
Summary of selected quarterly and annual data as at December 31, 2012
and 2011 


 
---------------------------------------------------------------------------
                                     Q4          Q4
Selected Quarterly and        (3 months)  (3 months)  12 months   12 months
Annual Information,               ended       ended       ended       ended
(unaudited)                      Dec 31,     Dec 31,     Dec 31,     Dec 31,
USD millions                       2012        2011        2012        2011
---------------------------------------------------------------------------
Net Profit / (Loss)                (5.6)      (34.3)      (24.8)      (38.1)
- per share, USD                  (0.01)      (0.15)      (0.05)      (0.17)
---------------------------------------------------------------------------
Mineral properties                                                         
expenditures, Sweden                0.5         0.5         2.4         2.7
---------------------------------------------------------------------------
Mineral properties                                                         
expenditures, Finland               1.7         5.2        11.5        20.1
---------------------------------------------------------------------------
Mines under construction                                                   
expenditures,                                                              
Sweden and Norway                 177.9        84.7       580.1       180.2
---------------------------------------------------------------------------
Cash, end of period balance        53.7        38.3        53.7        38.3
---------------------------------------------------------------------------
Number of                                                                  
Common shares               514,178,899 226,628,899 514,178,899 226,628,899
---------------------------------------------------------------------------

 
This table is for information only and does not form part of the
condensed financial statements 
Comment from the President and CEO 
"Northland has invested more than USD 900 million in the Kaunisvaara
project and developed the mining site from bog to mine in less than
two years. The production ramp-up has been successful and to date
Northland has produced approximately 71,400 tonnes of iron ore in the
process plant which is more than 65,000 dry metric tonnes ("dmt") of
iron ore concentrate with Fe-grade and quality in accordance with
planned product specifications. 
At the end of 2012, upon completion of several project milestones and
in connection with finalizing the detailed bottom-up budget, it
became obvious that the Company was facing need of additional funding
to cover higher than expected capital expenditures for the
installation of the first and second process lines and logistics, as
well as higher initial operating expenditures for the first two
years. The intention was to complete the funding by a combination of
an equity issue and a bond tap issue during January 2013. However,
the reaction from the market had a severe effect on the Company's
share price and the Company decided to withdraw the contemplated
transaction on February 5, 2013. To safeguard Northland's assets and
operations as well as the interest of its stakeholders, the Company
filed for reconstruction for its Swedish subsidiaries where the
Kaunisvaara project is legally held.  
On February 21, 2013 Northland received consent from the necessary
majority of the bondholders for a release of USD 6 million out of the
USD 72.6 million held in an escrow account by the bond trustee. This
support together with discussions with the key suppliers to reduce
burn-rate will enable the Company to continue its production at
Kaunisvaara and transport the iron ore concentrate to Narvik beyond
March 4, as previously contemplated.  
The Company is now undergoing a challenging period, but I am
convinced that we soon will be able to present a long term financial
solution to ensure the Company a strong base for continued
development of the Company and the Kaunisvaara project. It is
important to remember that Northland has considerable assets
consisting of ore reserves, a reliable infrastructure and a vital
operation that is producing 3-4,000 tonnes of high grade concentrate
per day. We also have a strong end-customer base to ship to, such as
our first customer Tata Steel in the Netherlands. 
Our main focus now is to solve the liquidity shortage, optimize the
logistics chain and reach full production in 2014". 


 
Significant events during 2012
 
January-March
 
--  Capital raise consisting of equity (USD 325 million) and a 13% interest
    bond (USD 350 million) 
--  Start of the Pitkajarvi trans-loading terminal ground work 
 
April-June
 
--  Signed final logistics agreements with Savage, Peab and Grieg 
--  Logistics agreement signed with Green Cargo 
--  USD 40 million Cost Overrun Facility with Standard Bank was signed 
--  Building permit granted in Pitkajarvi 
--  Finalized financing for drill rigs and mobile equipment 
--  First delivery of mobile equipment from Caterpillar, mills from Metso
    and drill rigs from Atlas Copco 
--  First drawdown under the 13% Bond Loan 
 
July-September
 
--  Second drawdown under the 13% Bond Loan 
--  Northland received confirmation of the four requested daily slots on
    Malmbanan 
 
October-December
 
--  First ore blast in the Tapuli mine 
--  First concentrate produced 
--  Dispensation for 90 tonnes trucks granted 
--  Third drawdown under the 13% Bond Loan 
--  Logistics chain proven when the iron ore concentrate reached the port of
    Narvik 
--  Full disbursement of USD 20 million bond from the additional 12.25% Bond
    Loan 
 
Significant events January 1, 2013- February 26, 2013
 
--  The Company is currently in a challenging financial situation following
    the withdrawal of the planned long-term funding. As a consequence, the
    Company is experiencing a liquidity shortage and resolved to safeguard
    its main operations, held in its Swedish subsidiaries (Northland
    Resources AB (publ), Northland Sweden AB and Northland Logistics AB by
    filing for corporate reconstruction. A creditors' meeting will be held
    on March 1, 2013, at the Lulea District Court in Sweden. At the
    creditors' meeting the appointed administrator will provide information
    on how the reconstruction is proceeding. 
--  On February 18, 2013 the Company received notice from the Toronto Stock
    Exchange (the "TSX") that they had decided to delist the Company's
    common shares effective at the close of market on March 15. This is due
    to the above described reconstruction. The Company's common shares have
    a dual listing on the Oslo Bors (the "OSE"), ticker NAUR, and trading on
    the OSE will continue at the OSE's discretion. 
--  Eva Kaijser will, after her twelve months maternity leave, resume the
    position as Chief Financial Officer ("CFO"), effective March 4, 2013.
    Mrs. Kaijser replaces the Acting CFO, Peder Zetterberg, as planned. 
--  Ramp up of production has been successful and to date Northland has
    produced approximately 65,000 dmt of iron ore concentrate with 69
    percent Fe-grade and quality in line with planned specifications. 
--  Approximately 55,000 tonnes of iron ore concentrate is being shipped to
    Tata Steel, IJmuiden, the Netherlands. 

 
SWEDEN 
Kaunisvaara Project 
The Group has executed the Kaunisvaara project mine and process plant
project in less than two years. During this period the Group has
constructed the industrial area, removed more than 5 million m3 of
overburden from the Tapuli mine, and installed and commissioned the
first process line, including a primary crusher, conveyor belts,
grizzly building as well as stock pile buildings and the process
plant. During December, 2012, Northland produced its first iron ore
concentrate in the process plant. 


 
--  Cold commissioning of the process plant is completed 
--  First production of concentrate has occurred 
--  Commissioning is close to completion, including rectification of minor
    items 
--  Ramp up of production has been successful and to date Northland has
    produced approximately 65,000 tonnes (dmt) of concentrate with 69
    percent Fe-grade and quality well in line with planned specifications 
--  First concentrate has been transported by rail from Pitkajarvi to
    Narvik, with the concentrate carried in rented box cars. 
--  About 55,000 tonnes of concentrate was loaded onboard the first vessel
    and shipped to Northland's off-take partner Tata Steel on February 25,
    2013. 
 
Mine and process plant
 
--  The first production blast occurred on October 18, 2012 
--  The first Kaunisvaara process line was completed on schedule. Cold
    commissioning has been completed, and first concentrate has been
    produced. 
--  During the ongoing commissioning the quality of the concentrate produced
    meets the specification achieved during the test works and the project
    study 
--  Three haul trucks, one wheel loader, one dozer and one grader have been
    installed at the mining site. Atlas Copco has delivered the second of
    the two drill rigs. Early in 2012, Northland awarded a contract for the
    purchase of the mine mobile equipment to PON Equipment AB for the supply
    of Caterpillar mine mobile equipment. This contract covered the supply
    of the first batch of the mining haulage trucks, loading shovels as well
    as ancillary equipment. Subsequent to this contract, Northland procured
    adequate tires for the haulage trucks to mitigate the risk of potential
    supply shortages. The truck workshop has been completed. 
 
The logistics chain
 
--  The complete logistics chain is working in accordance with expectations
    and will enhance gradually during 2013 
--  Road and rail interchange work has been completed at Pitkajarvi 
--  Northland and its contractor Cliffton have obtained dispensation (to be
    renewed on annual basis which is standard procedure) for operating 90
    tonnes truck from the Swedish Transport Administration ("STA") 
--  STA has also allocated the four rail daily slots on the rail line from
    Pitkajarvi to Narvik as was requested by Northland 
--  At the end of January, 2013, 12 rail cars were manufactured and
    currently Kiruna Wagon manufactures two rail cars per week 
--  The first 90 tonnes (gross weight) truck left Kaunisvaara on December 7,
    2012, loaded with concentrate destined for Pitkajarvi 
--  The first train loaded with concentrate left Pitkajarvi destined for
    Narvik during the weekend December 15-16, 2012 
--  The Swedish Government has committed to invest SEK 1.3 billion in the
    upgrading of the road 395, from Kaunisvaara to the re-loading terminal
    in Pitkajarvi. The Swedish Government has also allocated in total SEK
    1.3 billion to ensure sufficient capacity on the Malmbanan rail line to
    accommodate for the expected increase in volumes from Northland,
    Luossavaara-Kiirunavaara AB and other customers. 
 
The Port
 
--  Permits necessary for a temporary solution for the Fagernes Terminal in
    the Port of Narvik are in place. 
--  Construction of the permanent jetty in the Port of Narvik is progressing
    according to plan, and construction of the storage building is nearing
    completion 
--  First shipments of conveyors for moving concentrate into and out of bulk
    storage arrived on site in December 2012 
--  The Ship loader is expected to be delivered in July 2013 
--  The Fagernes Terminal in Narvik will be operated by Grieg Logistics AS 
--  One Boom stacker is delivered and is currently assembled in Narvik 
--  Northland has signed an agreement with the Norwegian National Rail
    Administration (Nw.: Jernbaneverket) to invest in the upgrade and
    capacity increase of the Fagernes rail line, connecting Northland's
    terminal, as well as the tracks in the terminal area. 
 
 
Consolidated statement of comprehensive income
 
2012 numbers unaudited 
 
 
                                                    Year ended December 31
                                                  ------------------------
                                                          2012        2011
--------------------------------------------------------------------------
                                                                          
                                                       USD'000     USD'000
                                                                          
Cost of sales                                          (24,029)          -
                                                                          
                                                  ------------------------
Gross profit / (loss)                                  (24,029)          -
                                                                          
Marketing expenses                                        (985)       (752)
General and administrative expenses                    (22,141)    (16,892)
Other operating expenses                                  (994)    (10,540)
Other income                                                56          92
                                                                          
                                                  ------------------------
Operating profit / (loss)                              (48,093)    (28,092)
                                                                          
Finance income                                          30,201       2,305
Finance expense                                         (5,692)    (11,880)
                                                                          
                                                  ------------------------
Finance income / (expense) - net                        24,509      (9,575)
                                                  ------------------------
                                                                          
Profit / (Loss) before tax                             (23,584)    (37,667)
                                                                          
Income tax                                              (1,222)       (402)
                                                                          
                                                  ------------------------
Profit / (Loss) for the year                           (24,806)    (38,069)
                                                  ------------------------
                                                  ------------------------
                                                                          
Other comprehensive income                                                
                                                                          
Change in fair value of available-for-sale assets            -          13
Foreign currency translation                             5,859      (8,498)
                                                                          
                                                  ------------------------
Total comprehensive income / (loss) for the year,                         
 net of tax                                            (18,947)    (46,554)
                                                  ------------------------
                                                  ------------------------
                                                                          
Profit / (Loss) per share:                                                
                                                                          
Basic and diluted loss for the year attributable                          
 to the equity (USD)                                     (0.05)      (0.17)
 
 
Quarterly information, unaudited
 
 
---------------------------------------------------------------------------
                                          4rd       3nd       2st       1th
                                      quarter   quarter   quarter   quarter
                                        ended     ended     ended     ended
                                       Dec 31,   Sep 30,   Jun 30,   Mar 31,
                                         2012      2012      2012      2012
---------------------------------------------------------------------------
Total income, USD '000                    245       203       235       145
---------------------------------------------------------------------------
Net profit (loss) USD '000             (5,583)    3,728   (21,610)   (1,341)
---------------------------------------------------------------------------
Net profit (loss) per share, USD        (0.01)     0.01     (0.04)    (0.00)
---------------------------------------------------------------------------
 
---------------------------------------------------------------------------
                                          4rd       3nd       2st       1th
                                      quarter   quarter   quarter   quarter
                                        ended     ended     ended     ended
                                       Dec 31,   Sep 30,   Jun 30,   Mar 31,
                                         2011      2011      2011      2011
---------------------------------------------------------------------------
Total income, USD '000                    358       517       816       707
---------------------------------------------------------------------------
Net profit (loss) USD '000            (34,348)   (3,928)   (8,665)    8,872
---------------------------------------------------------------------------
Net profit (loss) per share, USD        (0.15)    (0.02)    (0.04)     0.11
---------------------------------------------------------------------------
 
 
Consolidated statement of financial position
 
2012 numbers unaudited
 
 
                                                         As at December 31
                                                  ------------------------
                                                          2012        2011
--------------------------------------------------------------------------
                                                                          
                                                      USD '000    USD '000
                                                                          
Assets                                                                    
Non-current assets                                                        
                                                                          
Exploration and evaluation assets                       80,054      64,165
Mines under construction                               678,079     236,794
Property, plant and equipment                          235,262       9,345
Intangible assets                                          910       1,241
Financial assets                                        49,427      27,632
                                                                          
                                                  ------------------------
Total non-current assets                             1,043,732     339,177
                                                  ------------------------
                                                                          
Current assets                                                            
                                                                          
Inventories                                              5,928           -
Accounts receivable                                     19,689      17,291
Other current assets                                    65,302      23,979
Cash and cash equivalents                               53,739      38,324
                                                                          
                                                  ------------------------
Total current assets                                   144,658      79,594
                                                  ------------------------
Total assets                                         1,188,390     418,771
                                                  ------------------------
                                                  ------------------------
                                                                          
Equity and liabilities                                                    
                                                                          
Shareholders' equity                                                      
                                                                          
Share capital                                           50,425      21,592
Share premium                                          662,591     388,576
Reserves                                                36,213      29,452
Cumulative losses                                     (124,713)    (99,907)
                                                                          
                                                  ------------------------
Total equity                                           624,516     339,713
                                                  ------------------------
                                                                          
Non-current liabilities                                                   
                                                                          
Borrowings                                             358,131       4,302
Finance lease obligations                               17,937           -
Provisions                                              28,758         327
Other non-current liabilities                            7,536           -
                                                                          
                                                  ------------------------
Total non-current liabilities                          412,362       4,629
                                                  ------------------------
                                                                          
Current liabilities                                                       
                                                                          
Trade and other payables                               146,485      74,008
Finance lease obligations                                3,789           -
Income tax liability                                     1,238         421
                                                                          
                                                  ------------------------
Total current liabilities                              151,512      74,429
                                                  ------------------------
Total equity and liabilities                         1,188,390     418,771
                                                  ------------------------
                                                  ------------------------
 
 
Consolidated statement of changes in equity
 
2012 numbers unaudited
 
 
                                Attributable to the owners of   
                                  Northland Resources S.A.      
 
                                        Share capital           
                            ------------------------------------
                               Number of  Issued and       Share
                                  shares  fully paid     premium
----------------------------------------------------------------
                                                                
                                             USD'000     USD'000
                                                                
Balance as at January 01,                                       
 2012                        226,628,899      21,592     388,576
                            ------------------------------------
                                                                
Profit / (Loss) for the year           -           -           -
                                                                
Other comprehensive income                                      
Foreign currency translation           -           -           -
Change in fair value of                                         
 available-for-sale assets             -           -           -
Amount transferred to profit                                    
 or loss under caption                                          
 'finance expense' due to                                       
 significant decline in fair                                    
 value of the available-for-                                    
 sale assets                           -           -           -
                                                                
                            ------------------------------------
Total comprehensive profit /                                    
 (loss)                                -           -            
                                                                
Transactions with owners in                                     
 their capacity as owners:                                      
Issuance of new shares       287,500,000      28,828     296,925
Exercise of stock options         50,000           5         141
Share issuance costs                   -           -     (23,051)
Share-based payments                   -           -           -
                                                                
                            ------------------------------------
Balance as at December 31,                                      
 2012                        514,178,899      50,425     662,591
                            ------------------------------------
                            ------------------------------------
 
 
                                 Attributable to the owners of Northland
                                             Resources S.A.     
            
                                          Reserves                          
                            ------------------------------------------------
                                             Foreign                        
                            Share option    currency  Fair value       Other
                                 reserve translation     reserve    reserves
----------------------------------------------------------------------------
                                                                            
                                 USD'000     USD'000     USD'000     USD'000
                                                                            
Balance as at January 01,                                                   
 2012                             18,629       9,757          13       1,053
                            ------------------------------------------------
                                                                            
Profit / (Loss) for the year           -           -           -           -
                                                                            
Other comprehensive income                                                  
Foreign currency translation           -       5,859           -           -
Change in fair value of                                                     
 available-for-sale assets             -           -        (533)          -
Amount transferred to profit                                                
 or loss under caption                                                      
 'finance expense' due to                                                   
 significant decline in fair                                                
 value of the available-for-                                                
 sale assets                           -           -         520           -
                                                                            
                            ------------------------------------------------
Total comprehensive profit /                                                
 (loss)                                -       5,859           -           -
                                                                            
Transactions with owners in                                                 
 their capacity as owners:                                                  
Issuance of new shares                 -           -           -           -
Exercise of stock options            (94)          -           -           -
Share issuance costs                               -           -           -
Share-based payments               1,009           -           -           -
                                                                            
                            ------------------------------------------------
Balance as at December 31,                                                  
 2012                             19,544      15,616           -       1,053
                            ------------------------------------------------
                            ------------------------------------------------
 
 
                                 Attributable to the owners of Northland
                                             Resources S.A.     
                                                   
                                                    
                              Cumulative       Total       
                                  losses      equity
----------------------------------------------------
                                                    
                                 USD'000     USD'000
                                                    
Balance as at January 01,                           
 2012                            (99,907)    339,713
                            ------------------------
                                                    
Profit / (Loss) for the year     (24,806)    (24,806)
                                                    
Other comprehensive income                          
Foreign currency translation           -       5,859
Change in fair value of                             
 available-for-sale assets             -        (533)
Amount transferred to profit                        
 or loss under caption                              
 'finance expense' due to                           
 significant decline in fair                        
 value of the available-for-                        
 sale assets                           -         520
                                                    
                            ------------------------
Total comprehensive profit /                        
 (loss)                          (24,806)    (19,480)
                                                    
Transactions with owners in                         
 their capacity as owners:                          
Issuance of new shares                 -     325,753
Exercise of stock options              -          52
Share issuance costs                   -     (23,051)
Share-based payments                   -       1,009
                                                    
                            ------------------------
Balance as at December 31,                          
 2012                           (124,713)    624,516
                            ------------------------
                            ------------------------
 
Consolidated statement of changes in equity (ctd)
 
2012 numbers unaudited
 
                                Attributable to the owners of   
                                  Northland Resources S.A.      
 
                                        Share capital           
                            ------------------------------------
                               Number of  Issued and       Share
                                  shares  fully paid     premium
----------------------------------------------------------------
                                                                
                                             USD'000     USD'000
                                                                
Balance as at January 01,                                       
 2011                        224,418,899      21,369     385,041
                            ------------------------------------
                                                                
Profit / (Loss) for the year           -           -           -
                                                                
Other comprehensive income                                      
Foreign currency translation           -           -           -
Change in fair value of                                         
 available-for-sale assets             -           -           -
                                                                
                            ------------------------------------
Total comprehensive profit                                      
 (loss)                                -           -            
                                                                
Transactions with owners in                                     
 their capacity as owners:                                      
Exercise of stock options      2,210,000         223       3,795
Share issuance costs                   -           -        (260)
Share-based payments                   -           -           -
Issuance of warrants                   -           -           -
                                                                
                            ------------------------------------
Balance as at December 31,                                      
 2011                        226,628,899      21,592     388,576
                            ------------------------------------
                            ------------------------------------
 
                                 Attributable to the owners of Northland
                                             Resources S.A.     
            
                                          Reserves                          
                            ------------------------------------------------
                                             Foreign                        
                            Share option    currency  Fair value       Other
                                 reserve translation     reserve    reserves
----------------------------------------------------------------------------
                                                                            
                                 USD'000     USD'000     USD'000     USD'000
                                                                            
Balance as at January 01,                                                   
 2011                             17,292      18,255           -           -
                            ------------------------------------------------
                                                                            
Profit / (Loss) for the year           -           -           -           -
                                                                            
Other comprehensive income                                                  
Foreign currency translation           -      (8,498)          -           -
Change in fair value of                                                     
 available-for-sale assets             -           -          13           -
                                                                            
                            ------------------------------------------------
Total comprehensive profit                                                  
 (loss)                                -      (8,498)         13           -
                                                                            
Transactions with owners in                                                 
 their capacity as owners:                                                  
Exercise of stock options         (1,679)          -           -           -
Share issuance costs                               -           -           -
Share-based payments               3,016           -           -            
Issuance of warrants                   -           -           -       1,053
                                                                            
                            ------------------------------------------------
Balance as at December 31,                                                  
 2011                             18,629       9,757          13       1,053
                            ------------------------------------------------
                            ------------------------------------------------
 
 
                                 Attributable to the owners of Northland
                                             Resources S.A.             
                                                    
                              Cumulative       Total
                                  losses      equity
----------------------------------------------------
                                                    
                                 USD'000     USD'000
                                                    
Balance as at January 01,                           
 2011                            (61,838)    380,119
                            ------------------------
                                                    
Profit / (Loss) for the year     (38,069)    (38,069)
                                                    
Other comprehensive income                          
Foreign currency translation           -      (8,498)
Change in fair value of                             
 available-for-sale assets             -          13
                                                    
                            ------------------------
Total comprehensive profit                          
 (loss)                          (38,069)    (46,554)
                                                    
Transactions with owners in                         
 their capacity as owners:                          
Exercise of stock options              -       2,339
Share issuance costs                   -        (260)
Share-based payments                   -       3,016
Issuance of warrants                   -       1,053
                                                    
                            ------------------------
Balance as at December 31,                          
 2011                            (99,907)    339,713
                            ------------------------
                            ------------------------
 
 
Consolidated statement of cash flows
 
2012 numbers unaudited
 
 
                                                    Year ended December 31
                                                  ------------------------
                                                          2012        2011
--------------------------------------------------------------------------
                                                                          
                                                       USD'000     USD'000
Operating activities                                                      
Loss for the year before taxation                      (23,584)    (37,667)
Adjustments for non-monetary items:                                       
Impairment of exploration and evaluation assets                      9,036
Interest income                                           (632)          -
Interest expense                                         1,882           -
Depreciation and amortization                            4,905         374
Share-based payments                                       770       2,249
Loss on disposal of assets,net                                       1,097
Foreign exchange (gain) / loss                         (28,914)        104
Other non-monetary items                                 1,004         (12)
                                                  ------------------------
                                                       (44,569)    (24,819)
Changes in working capital                                                
Inventories                                               (858)          -
Accounts receivable                                     (1,247)    (30,194)
Other current assets                                   (51,336)     (1,067)
Trade and other payables                                38,553      12,520
                                                  ------------------------
Cash flows used in operating activities                (59,457)    (43,560)
Income tax paid                                           (309)          -
                                                  ------------------------
Net cash used in operating activities                  (59,766)    (43,560)
                                                  ------------------------
                                                                          
Cash flows from investing activities                                      
Investment in exploration and evaluation assets        (16,416)    (20,496)
Acquisition of PPE including Mines under                                  
 construction                                         (559,826)   (139,468)
Long-term receivable                                   (21,487)    (19,286)
Interest received                                          632           -
                                                  ------------------------
Net cash used in investing activities                 (597,097)   (179,250)
                                                  ------------------------
                                                                          
Cash flows from financing activities                                      
Proceeds from issuance of ordinary shares              325,802       2,339
Share issuance costs                                   (23,050)     (1,430)
Net proceeds from borrowings                           364,254       4,302
Transaction costs on fund raising                       (6,039)       (899)
Interest paid                                           (1,882)          -
                                                  ------------------------
Net cash from financing activities                     659,085       4,312
                                                  ------------------------
                                                                          
Change in cash and cash equivalents                      2,222    (218,498)
Effect of changes in exchange rates                     13,194       5,386
Cash and cash equivalents at beginning of the year      38,323     251,435
                                                  ------------------------
Cash and cash equivalents at end of the year            53,739      38,323
                                                  ------------------------
                                                  ------------------------

 
Notes to the Consolidated Financial Statements 
Segment information 
Segment information is provided on the basis of geographic segments
as the Group monitors its business according to the geographic
locations of its resource properties in Sweden, Finland and Norway.
The business segments presented reflect the management structure of
the Group and the way in which the Group's management reviews
business performance.  
Corporate functions and dormant entities are classified together
within "Other". 
The segment information provided to the Committee for the reportable
segments is as follows:  


 
                             Sweden   Finland    Norway     Other     Total
                         --------------------------------------------------
                            USD'000   USD'000   USD'000   USD'000   USD'000
                                                                           
December 31, 2012                                                          
                                                                           
Statement of                                                               
 comprehensive income                                                      
Depreciation and                                                           
 amortisation (being part                                                  
 of the 'Cost of sales')      4,359         -         -         -     4,359
Depreciation and                                                           
 amortisation (being part                                                  
 of the 'General and                                                       
 administrative charges'        203       102         -       233       538
Write-offs                      274       583         -       137       994
Net income / (loss)         (88,422)  (10,412)  (11,084)   85,112   (24,806)
                                                                           
                         --------------------------------------------------
                                                                           
Statement of financial                                                     
 position                                                                  
Exploration and                                                            
 evaluation assets           16,904    63,150         -         -    80,054
Mines under construction    539,681         -   138,398         -   678,079
Property, plant and                                                        
 equipment& intangible                                                     
 assets                     229,511     6,659         -         2   236,172
Current assets              113,994     1,435     8,487    20,742   144,658
Financial assets             48,902         -         -       525    49,427
                                                                           
                         --------------------------------------------------
Total assets                948,992    71,244   146,885    21,269 1,188,390
                         --------------------------------------------------
                                                                           
Capital expenditure         518,798        66   119,789         -   638,653
                         --------------------------------------------------
                                                                           
Borrowings                  353,727     4,404         -             358,131
Finance lease obligations    21,725         -         -              21,725
Provisions                   28,758         -         -              28,758
Other liabilities           135,065     1,702    16,312     2,181   155,260
                                                                           
                         --------------------------------------------------
Total liabilities           539,275     6,106    16,312     2,181   563,874
                         --------------------------------------------------
                         --------------------------------------------------
                                                                           
                                                                           
                             Sweden   Finland    Norway     Other     Total
                         --------------------------------------------------
                            USD'000   USD'000   USD'000   USD'000   USD'000
                                                                           
December 31, 2011                                                          
                                                                           
Statement of                                                               
 comprehensive income                                                      
Depreciation and                                                           
 amortisation                    63        67         -       244       374
Write-offs                   10,093       439         -         -    10,532
Net loss                    (47,338)   (6,345)      (17)   15,631   (38,069)
                                                                           
                         --------------------------------------------------
                                                                           
Statement of financial                                                     
 position                                                                  
Exploration and                                                            
 evaluation assets           13,564    50,601         -         -    64,165
Mines under construction    225,756         -    11,038         -   236,794
Property, plant and                                                        
 equipment& intangible                                                     
 assets                       3,377     6,846         -       363    10,586
Current assets               57,564     3,608     5,466    12,956    79,594
Financial assets             27,632         -         -         -    27,632
                                                                           
                         --------------------------------------------------
Total assets                327,893    61,055    16,504    13,319   418,771
                         --------------------------------------------------
                                                                           
Capital expenditure         170,165     6,595    11,538         -   188,298
                         --------------------------------------------------
                                                                           
Borrowings                        -     4,302         -         -     4,302
Finance lease obligations         -         -         -         -         -
Provisions                      327         -         -         -       327
Other liabilities            66,310     4,364     1,655     2,100    74,429
                                                                           
                         --------------------------------------------------
Total liabilities            66,637     8,666     1,655     2,100    79,058
                         --------------------------------------------------
                         --------------------------------------------------

 
As the management does review segment assets and liabilities, the
Group has continued to disclose this information in a manner
consistent with the consolidated statement financial position. The
measure of the statement of cash flows information has not been
disclosed for each reportable segment as this information is not
regularly provided. 
Mines under construction  


 
                                                                    USD'000
                                                            ---------------
                                                                           
Cost as at December 31, 2010                                         74,950
Transferred from exploration and evaluation assets                    1,142
Transferred to exploration and evaluation assets                     (1,457)
Transferred to property, plant and equipment                           (554)
Additions                                                           180,210
Net exchange differences                                            (11,515)
Write-offs                                                           (5,894)
Other                                                                   (88)
                                                                           
                                                            ---------------
Cost as at December 31, 2011                                        236,794
Transferred from property, plant and equipment                          578
Transferred to property, plant and equipment                       (216,899)
Additions                                                           580,080
Transferred to inventories                                           (5,070)
Net exchange differences                                             38,567
Capitalized borrowing costs(i)                                       44,029
                                                                           
                                                            ---------------
Cost as at December 31, 2012                                        678,079
                                                            ---------------
                                                            ---------------

 
(i)100% for the first quarter, 97% for the second quarter, 96% for
the third quarter and 89% for the fourth quarter of the effective
interest charges related to the Bonds (effective rate of 15.2%), net
of interest income resulting from the bond escrow accounts, has been
capitalized for a total amount of USD 44.2 million for the twelve
months ended December 31, 2012. In the fourth quarter, USD 0.2
million of the capitalized interest has been amortized. In addition,
USD 2.9 million of effective interest charges related to the Standard
Bank bridge loan 2011 - 2012 has been capitalized, representing a
capitalization rate of 94% (effective interest rate on the bridge
loan of 120%).   
Mines under construction' are not depreciated until construction is
completed. This is signified by the formal commissioning of the mine
for production. 
Upon completion of the mine construction, the assets are transferred
into property, plant and equipment or mine properties and are
subjected to normal depreciation at their estimated useful lives, in
accordance to IAS 16. 
Amounts written off are classified under caption 'Other operating
expenses'. The management has performed an impairment test on the
cost incurred in the year under review and has concluded that no
amount to be written off. 
Property, plant and equipment 


 
                                                                    USD'000
                                                            ---------------
                                                                           
Cost as at December 31, 2010                                          5,075
Additions                                                             7,303
Disposals                                                                (9)
Transferred from Mines under construction                               554
Transferred to intangible assets                                        (88)
Impairment                                                           (1,443)
Net exchange differences                                               (749)
                                                            ---------------
                                                                           
Cost as at December 31, 2011                                         10,643
Additions                                                            13,661
Disposals                                                              (164)
Transferred from Mines under construction                           216,899
Transferred to Mines under construction                                (578)
Net exchange differences                                                657
                                                            ---------------
Cost as at December 31, 2012                                        241,118
                                                            ---------------
                                                            ---------------
                                                                           
                                                                           
Accumulated depreciation as at December 31, 2010                       (941)
Additions                                                              (415)
Reclassification                                                          4
Net exchange differences                                                 54
Accumulated depreciation as at December 31, 2011                     (1,298)
Additions                                                            (4,560)
Disposals                                                               155
Transferred to intangible assets, net                                    11
Net exchange differences                                               (164)
Accumulated depreciation as at December 31, 2012                     (5,856)
                                                                           
Net book value as at December 31, 2011                                9,345
Net book value as at December 31, 2012                              235,262

 
Changes in contingent liabilities 
In fourth quarter 2012 the Company booked the full provision for
estimated restoration costs related to the Tapuli mine and to the
cost of dismantling and removal of the standing buildings. This has
increased the provision in the statement of financial position to USD
28.8 million compared to USD 1.2 million as at third quarter of 2012.
This provision has been included to the cost of tangible assets.
Consequently the contingent liability for the restoration costs
amounts to USD 17.1 million, to be compared with USD 35.1 million, as
estimated in the third quarter of 2012 which do not include the costs
of dismantling and removal of the standing buildings. The remaining
contingent liability is related to the Sahavaara mine and assets yet
not activated during the reporting period. 
Related party transactions 
Relationships 
Companies and persons which control or to a significant extent
influence the Company or its subsidiaries or which are controlled or
to a significant extent influenced by the Company or its subsidiaries
are to be regarded as related parties under IAS 24. Therefore, for
the Group, the related parties comprise subsidiaries and key
management personnel. 
Terms and conditions of transactions with related parties 
The Group in the normal course of business carries out transactions
with related parties on commercial or agreed upon terms and
conditions. Outstanding balances at the year-end are unsecured and
interest free and settlement occurs in cash or share based payment.
There have been no guarantees provided or received for any related
party receivables or payables. 
The consolidated financial statements include the financial
statements of the Company and the subsidiaries listed in the
following table:  


 
                                                          As at December 31
                                                         ------------------
                                          Country of                       
Entity's name                             incorporation       2012     2011
---------------------------------------------------------------------------
                                                                           
Northland Resources S.A.                  Luxembourg        Parent   Parent
                                                                           
Northland Resources S.A - Swiss branch    Switzerland         100%     100%
                                                                           
Parent directly owns the following                                         
 entities:                                                                 
------------------------------------------                                 
                                                                           
North American Gold (Barbados) Inc. (i)   Barbados               -     100%
Northland Sweden AB (formerly Northland                                    
 Resources Tapuli Mine AB)                Sweden              100%     100%
Northland Mines OY                        Finland             100%     100%
                                                                           
Parent indirectly owns the following                                       
 entities through Northland Sweden AB:                                     
------------------------------------------                                 
                                                                           
Northland Exploration Sweden AB (formerly                                  
 Barsele Guld AB)                         Sweden              100%     100%
Northland Resources AB                    Sweden              100%     100%
Northland Logistics AB (formerly Northland                                 
 Exploration Sweden AB)                   Sweden              100%     100%
Northland Logistics AS                    Norway              100%     100%
                                                                           
Parent indirectly owns the following                                       
 entity through Northland Mines OY:                                        
------------------------------------------                                 
                                                                           
Northland Exploration Finland OY          Finland             100%     100%

 
(i) North American Gold (Barbados) Inc. was dissolved in the
reporting year 
Transactions with common key management and directors: 
The Group incurred charges with entities having a common key
management and directors in the normal course of operations as
detailed in the table below: 


 
                                          Year ended December 31
                                                2012        2011
                                        ------------------------
                                             USD'000     USD'000
Consultancy fees                               1,398         637
Management fees                                    -         288
Share-based payments                              61         411
Termination benefits                               -         165
                                        ------------------------
Total                                          1,459       1,501
                                        ------------------------
                                        ------------------------

 
These charges were measured by the exchange amount, which is the
amount agreed upon by the transacting parties. 
The Company paid fees to a private company controlled by a director
of the Company for consulting services performed outside of his
capacity as a director. 
Compensation to key management personnel and directors of the Group 


 
                                          Year ended December 31
                                        ------------------------
                                                2012        2011
                                        ------------------------
                                             USD'000     USD'000
                                                                
Salaries and directors fees                    3,594       2,873
Share-based payments                             596       2,086
                                                                
                                        ------------------------
Total                                          4,190       4,959
                                        ------------------------
                                        ------------------------

 
Share-based payments are the fair value of options granted to key
management personnel and directors. 
Accounts receivable and payable 
Accounts receivable included amounts due from an officer of the
Group. 
Accounts payable included amounts due to key management and director
of the Group and to an entity with a common director. 


 
                                               As at December 31
                                        ------------------------
                                                2012        2011
                                        ------------------------
                                             USD'000     USD'000
                                                                
Accounts receivable                                -          71
                                        ------------------------
                                                                
Accounts payable                                (166)         (2)
                                        ------------------------

 
Commitments under purchase agreements  
The Group has entered into purchase agreements for the
pre-development of the mine construction, long-term operational
services and the completion of power station procurement facilities
at the Kaunisvaara site. The total estimates for the related purchase
commitments arising under these agreements as at December 31, 2012
amount to USD 1,386.8 million (December 31, 2011: USD 522.3 million). 
Commitments under off-take agreements 
The entire planned production of 4.4 million dry metric tonnes per
year has now been fully committed in firm off-take agreements with
three global, well-established and solid partners, for terms of up to
10 years. 20% of production has been committed to Stemcor UK Ltd and
to Tata Steel UK each and the remaining 60% to Standard Bank Plc. 
About Northland Resources S.A. 
Northland's common shares are primary listed on the Toronto Stock
Exchange (the "TSX") under the symbol NAU. Due to the Company's
current financial situation, the company being under reconstruction,
the TSX has decided to delist the Company's common shares effective
at the close of market on the TSX March 15, 2013. In the meantime
trading on the TSX is suspended. Trading is continuing, on the Oslo
Bors under the symbol NAUR, on Nasdaq OMX Stockholm under the symbol
NAURo and on the Frankfurt Borse under the symbol NPK. 
As a Luxembourg-domiciled company with shares listed on an exchange
in the European Economic Area, the Company is subject to the rules
and regulations of the Commission de Surveillance du Secteur
Financier. These regulations include a requirement to file
information in accordance with International Financial Reporting
Standards ("IFRS") as endorsed by the European Union ("EU"). 
Forward-looking information 
Certain statements contained in this Year-End Press release and
elsewhere constitute forward-looking statements. Such forward-looking
statements involve a number of known and unknown risks, uncertainties
and other factors which may cause the actual results, performance or
achievements of the Company to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking statements. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only
as of the date the statements were made, and readers are advised to
consider such forward-looking statements in light of the risks set in
the Annual Report 2011. 
Liquidity and capital resources 
On February 2, 2012, the Company launched an equity offering of new
shares mainly to institutional investors at a rate of NOK 6.50 / CAD
1.13 per share. It closed on February 23, 2012 giving gross proceeds
equivalent to USD 325 million.  
At the same time an offer of a senior secured five-year bond was
launched for an equivalent of USD 350 million. This offering was also
fully subscribed and completed on March 6, 2012. The Senior Secured
Bond issue 2017 is traded on Oslo Bors under the ticker NORES01 for
the NOK 460,000,000 tranche and under ticker NORES02 for the USD
270,000,000 tranche. The final maturity date for both tranches is
March 6, 2017. 
Interest bearing debt as at December 31, 2012 totaled USD 358.1
million (net of deferred financing fees), up from USD 4.3 million at
the end of December 2011. The Company's cash and cash equivalents as
at December 31, 2012 totaled USD 53.7 million, compared to USD 38.3
million as at December 31, 2011.  
During 2012, the Company passed three "cost-to-complete" tests by the
independent engineer consulting firm Royal HaskoningDHV (formerly
named Turgis). Following these tests the Company has drawn down a
total of USD 265 million from the USD 350 million Bond Loan Facility. 
In the middle of the fourth quarter of 2012, a liquidity shortfall
was quantified based on a detailed preliminary budget that included
remaining capital expenditure ("Capex") and operating cash flow for
the next 24 months. This was due to lower than expected operating
cash flow which has been considerably influenced by iron ore price
estimates, USD/SEK exchange rates as well as higher than estimated
costs during the ramp up. In total this amounts to USD 144 million.
Additional Capex was identified, this in addition to what was
previously reported at the Capital Markets Day in September 2012
where Capex of USD 956 million was presented to reach full production
of both process lines. The new plan of January 2013 includes
additional costs to finalize the logistic investments in Narvik and
Pitkajarvi, as well as higher than anticipated costs for installation
of the first and second process line. In total USD 140 million of
Capex have been added to the USD 956 for the period until December
31, 2014. This is to cover the complete installation of the second
process line as well as the completion of all logistic works and the
required investments in the permanent solution for the tailings
management facility. To cover the peak financing need, interest and
fees, as well as a USD 45 million contingency, the Company initiated
in January 2013 a capital raise of USD 375 million through a combined
equity and bond issue.  
Going Concern and long term financial solution 
Since the process of raising additional capital did not turn out as
expected, other avenues to cover the capital need had to be explored.
In order to conduct this in an orderly manner the Board of Northland
Resources S.A. together with the Boards of the Swedish entities
decided to file for reconstruction for the Swedish entities on
February 8 and 12, 2013. To strengthen the short term liquidity of
the Company the bondholders will during the present week make USD 6
million available as a short term cash support.  
At present there is an intensive work ongoing to find the best
possible financial solution for the Company and its stakeholders.
Since there is a substantial number of industrial, as well as
financial investors, seriously interested in participating in the
funding, the Board of Directors and the Management is confident that
it is possible to obtain an appropriate solution within the near
future. Consequently the Board has decided that the going concern
principle still can be applied. With these additional funds the
finalization of the Kaunisvaara project with the Tapuli mine and the
two process lines would be safeguarded. This would then bring the
production volume well above the point where a positive cash flow is
assured.  
Accounting policies 
The unaudited interim condensed consolidated financial statements of
Northland Resources S.A. have been prepared in accordance with IAS 34
of International Financial Reporting Standards (IFRS) issued by the
International Accounting Standards Board (IASB) as adopted by the
European Union. With respect to the Company's unaudited interim
condensed consolidated financial statements for the twelve months
ended December 31, 2012, there are no material differences between
IFRS as adopted by the European Union and the one issued by the IASB. 
The unaudited interim condensed consolidated financial statements
have been prepared under the historical cost convention. In addition
these unaudited interim condensed consolidated financial statements
have been prepared using the accrual basis of accounting, except for
cash flow information.  
The unaudited interim condensed consolidated financial statements do
not include all the information and disclosures required in the
annual financial statements, and should be read in conjunction with
the Group's consolidated financial statements as at December 31,
2011. The preparation of the interim consolidated financial
statements in conformity with IFRS, as endorsed by the European
Union, requires the use of certain critical accounting estimates. It
also requires management to exercise its judgment in the process of
applying the Group's accounting policies. Estimates and judgments are
continually evaluated and are based on historical experience as
adjusted for current market conditions and other factors. However,
actual outcomes can differ from these estimates.  
Coming Report Dates 
March 26, 2013: Audited Financial Statement and MD&A for Q4 2012 
May 8, 2013: Financial Statement and MD&A for Q1 2013 
August 8, 2013: Financial Statement and MD&A for Q2 2013 
November 14, 2013: Financial Statement and MD&A for Q3 2013 
Annual General Meeting  
The 2013 Annual General Meeting of Northland S.A. will be held on
Thursday, May 16, 2013 in Luxembourg. 
Additional information relating to the Company, including the
Company's Annual Information Form, is available on SEDAR at
www.sedar.com or on the Company's website www.northland.eu.
Contacts:
Northland Resources S.A.
Karl-Axel Waplan
President and CEO
+46 705 104 239 
Northland Resources S.A.
Peder Zetterberg
Acting CFO
+46 708 652 120 
Northland Resources S.A.
Anders Antonsson
Vice President - Investor Relations
+46 709 994 970
www.northland.eu
 
 
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