Interim Report January-June 2022

Significant events during the second quarter 2022

• The company's application for accessing up to 20 MW of power was finally approved by Svenska Kraftnät.
• The move of a 50 kV line for the power was completed.
• The company employed a new CEO, who took up the position on July 25, 2022.
• The company received a short-term loan of SEK 5 million

Second quarter, 1 April – 30 June 2022

• Income amounted to SEK 0 million (0)
• Earnings after tax amounted to SEK –3.2 million (–2.2)
• Investments in the period April–June totalled SEK 2.0 million (0.6)
• Basic earnings per share were SEK –0.09 (–0.07)

Interim period, 1 January – 30 June 2022

• Income amounted to SEK 0 million (0)
• Earnings after tax amounted to SEK –4.9 million (–4.9)
• Investments in the period January–June totalled SEK 4.3 million (2.6)
• Basic earnings per share were SEK -0.13 (–0.15)
• Cash and cash equivalents on 30 June 2022 amounted to SEK 4.3 million (5.4)

Significant events after the end of the period

• Outstanding loans of SEK 15.5 million have been extended to the end of the year.

Comments from the CEO:

Getting ready to gear up

Close to a month ago I took over as CEO and I have already gotten to know a company that I see has a very good and interesting journey ahead. For me personally, it feels very good at in this point assume the responsibility and increase the pace of development. My belief is that with my education and experience from the mining and metals industry, combined with previous involvement in start-ups and financing, I am exactly what the company needs for the future.

There is no doubt that Nordic Iron Ore is in a very good position and has great potential. We shall not only increase the domestic supply of iron ore but also produce an iron ore concentrate suitable for direct reduction and for the ongoing green transformation of the iron and steel industry. In addition, the mineralization is of high quality and can be of significant volume, and SGU has also declared the mineral deposit to be of national interest. All in all, this means that I see ahead of me a long-term prosperous mining operation and production of iron ore products that I will build up.

The initial phase is to resume mining in Blötberget and sign an offtake agreement for a significant amount of iron ore concentrate so that the business is secured and can be the foundation for future development phases. This work has been initiated and more recently led by my predecessor, Lennart Eliasson. I would like to give a big thank you to Lennart for his efforts and commitment.

The second quarter was largely characterized by Cargill's technical review (due diligence) regarding the next phase in the development of the collaboration with Nordic Iron Ore. The review that Cargill commissioned was more thorough and extensive than expected, but the final result was positive. I believe that the extended time required for the review should be seen as an investment for the future. The financiers who are to provide the large project financing will want to do a very comprehensive review of the company and it is then good to be prepared.

During the period, we received positive information from Svenska Kraftnät, an information that means we can withdraw up to 20 MW for the upcoming mining operation. Securing electricity is an important milestone and cannot be taken for granted in the current energy market.

Furthermore, a new EU-funded research project has started with seismic measurements around Blötberget and we expect that the results will reinforce and expand the very interesting indications that previous projects have shown.

When the re-establishment of Blötberget is completed, the operation will produce approximately 1,600,000 tonnes of iron ore concentrate per year with an average iron content close to 69%, one of the highest on the market. We are getting strong signals that such a product, characterized by its high quality, magnetite content and low concentration of harmful elements, will be well received by the steel industry. The reason is that this will be very suitable for reducing the CO₂ intensity of steelmaking.

We are now in an intensive period of contract negotiations for supplies, the investment and the wider strategic partnership with Cargill. The goal is to complete the transaction as quickly as possible. The possible investment from Cargill of SEK 50 million, as part of a wider capital raising of at least SEK 100 million, will facilitate the next phase in the development of Blötberget.

Work on our plans has progressed so that we can take the project to the next level. We have intensified our discussions with potential suppliers for engineering and construction services as well as suppliers of electrical, process and mining equipment. I have started the work on building Nordic Iron Ore's new organizational structure and securing a highly competent management team for the continued development. And it is already now clear to me that there are - just like me - many who are interested in being part of the journey that Nordic Iron Ore is about to embark.