Nordic Mining shares tumble on liquidity issues, slow ramp-up

Shares of Nordic Mining ASA (NOM) on the Oslo stock exchange dropped 6.3% on Tuesday after the company released its second-quarter results, revealing a liquidity problem and a slower-than-anticipated ramp-up of production at its Engebø Rutile and Garnet facility. The firm reported a NOK 154.3 million operating loss for the period, with expenses totaling NOK 122.1 million.

Despite outputting 1,262 tonnes of rutile and 10,127 tonnes of garnet, Nordic Mining made no revenue, pending resolution of product quality discussions for shipments made during the quarter. As of the quarter's end, the company had cash reserves of about NOK 150 million. The stock decline coincided with Nordic Mining's disclosure that it will only have liquidity until September 4, 2026, following a deferred coupon payment and waivers.

The company is actively seeking to raise $10-15 million in additional liquidity to fund operations through November 2026 and is in talks with bondholders, shareholders, and potential new investors to establish a stable capital structure. CEO Finn Ivar Marum acknowledged the challenges ahead during the quarter, noting that while operations progressed and throughput increased, the company remains realistic about the time needed to achieve full performance and reliability.

The CEO emphasized the need to address the liquidity situation and the company's ongoing discussions with bondholders and shareholders to find a balanced, sustainable solution. The mining giant revised its production profile following a thorough ramp-up review, but it remains committed to its long-term goal of generating significant free cash flow once the Engebø facility operates at capacity.

The company's investment in the project exceeds NOK 3 billion. Despite a Norwegian Supreme Court ruling invalidating tailings disposal permits due to insufficient reasoning, Nordic Mining continues to operate and anticipates a decision on its temporary permit application in September.