TSX-V-listed Nordic, which recently restructured its board and management, is keen to return the Laiva gold mine, in Finland, to production.
Nordic president and CEO Brian Wesson, who was appointed in the July reshuffle, wrote a letter to shareholders this week, setting out the path forward for the company.
He said that the immediate plan for Nordic was threefold: To recapitalise the company, to complete confirmatory technical work and to return Laiva to production.
Wesson told shareholders that Nordic was sufficiently funded for its immediate working capital needs, but that more capital would have to be raised before the mine could start producing again.
Nordic plans to raise a total of $7-million to complete the confirmatory technical work, which would also better position the company to raise further funds on favourable terms for the restart of the mine and eventual repayment of Pandion. Wesson noted that the company's constraints thus far had been that it raised funds on unfavourable terms, owing to the company's situation.
“We note that the funding required for the actual restart of the Laiva mine can be raised either through equity at higher prices than currently is the case or through a standard debt arrangement. We also note that the runway that Pandion has provided gives the company the ability to fund their repayments from operational cash flow or a debt instrument - thereby providing management with alternatives to dilutive equity.”
Earlier this week, Nordic announced that it had agreed to settle the outstanding C$63.4-million in liability, plus the $5-million in care-and-maintenance cost owed to Pandion for a total consideration of $24.56-million, payable over the next 24 months. The agreement included Pandion providing an additional $900 000 to Nordic for working capital purposes.
Wesson said that the new management had spent considerable time ensuring the technical veracity of the project and building confidence therein. To boost the market’s confidence, Lionsbridge is working with Coffey, a Tetra Tech Company from the UK, to review its work.
The first step in this process is to release an updated National Instrument 43-101 technical report estimating the asset's resource base.
The second step is for senior management and technical staff to work closely with Tetra Tech to design and carry out a drilling programme to further estimate the resources, lay the groundwork for opening a third pit and exploratory drilling.
Finally, the company will issue a Tetra Tech published restart plan at feasibility level sensitivity detailing the plan for the company to restart production.
The projected restart date of operations is June next year – a deferral from a previously guided second quarter restart.
The mine was placed on care and maintenance in February, after Nordic terminated its contract with its underperforming mining contractor.
The Laiva deposit is located in Raahe, and is one of the largest gold resources in the region. The mine is a conventional openpit mine with two pits.
In July, Nordic entered into a services agreement with Lionsbridge Capital for corporate management services and Westech International for technical services.
Wesson was appointed president and CEO, Clyde Wesson was named VP, Daryl Midgley was appointed CFO and Jeffrey Lightfoot became corporate secretary. At the same time, the previous board and management team resigned.