Investor Presentation May 2013 - Northland Resources

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Investor Presentation May 2013 - Northland Resources

STRICTLY PRIVATE & CONFIDENTIAL

THIS DOCUMENT MAY NOT BE DISTRIBUTED IN, OR TO ANY PERSON IN THE U.S., CANADA, AUSTRALIA OR JAPAN OR TO ANY NATIONAL OR RESIDENT OF THE U.S.,

CANADA, AUSTRALIA OR JAPAN, OR IN ANY OTHER JURISDICTION IF SUCH DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE SECURITIES LEGISLATION, EXCEPT

PURSUANT TO AN EXEMPTION FROM THE APPLICABLE SECURITIES LEGISLATION. ANY FAILURE TO COMPLY WITH THESE RESTRICTIONS MAY CONSTITUTE A

VIOLATION OF APPLICABLE SECURITIES LEGISLATION. THIS PRESENTATION DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION TO BUY ANY OF THE

SECURITIES DESCRIBED HEREIN.

Investor Presentation

USD 362m Senior Secured Bond Offering

Joint Lead Managers and Bookrunners: Arctic Securities ASA and Pareto Securities AS

Co-Lead Manager: Ocean Equities Ltd.

7 May 2013


Disclaimer

By reading this investor presentation (the “Presentation”), or attending any meeting or oral presentation held in relation thereto, you (the “Recipient”) agree to be bound by the following

terms, conditions and limitations.

The Presentation has been produced by Northland Resources S.A. (“NRSA”, “Northland” or the “Company” and together with its subsidiaries, the “Group”) solely for use at presentations to

potential investors in connection with the contemplated offering of bonds by the Company in May 2013 (the “Transaction”). The managers for the Transaction are Arctic Securities ASA and

Pareto Securities AS as Joint Lead Managers and Bookrunners and Ocean Equities Ltd as Co-Lead Manager (collectively the “Managers”).

The Presentation is for information purposes only and does not in itself constitute, and should not be construed as, an offer to sell or a solicitation of an offer to buy any securities of the

Company in any jurisdiction. Prospective investors in the Transaction (if and when made) are required to read the offering material and other relevant documentation which is released in

relation thereto for a description of the terms and conditions of the Transaction and further information about the Company.

This Presentation and its contents are strictly confidential. Distribution of this Presentation to any person other than the Recipient and any person retained to advice the Recipient with respect

to the Transaction is unauthorized, and any disclosure of any of the contents of this Presentation, without the prior written consent of the Company or the Managers, is prohibited.

The Managers have had limited time available to carry out due diligence investigations in relation to the Company, its business and financial position and the Transaction. The

investigations carried out by or on behalf of the Managers have been limited to a legal review of certain material project contracts, permits and certain other documents related to

the Kaunisvaara project. In particular, no technical verifications, tax or other financial due diligence or third party verification of the Company’s financial position, prospects,

forecasts and budgets has been carried out by or on behalf of the Managers.

The Recipient acknowledges and accepts the risks associated with the fact that only limited investigations have been carried out. The Recipient will be required to conduct its own analysis

and acknowledges and accepts that it will be solely responsible for its own assessment of the Company, the Transaction, the market, the market position of the Company, the Company's

funding position, and the potential future performance of the Company’s business and securities.

The Presentation is furnished by the Company. None of the Managers or any of their respective parent or subsidiary undertakings or affiliates, or any directors, officers, employees, advisors

or representatives of any of the aforementioned (collectively the “Representatives”) make any representation or warranty (express or implied) whatsoever as to the accuracy, completeness

or sufficiency of any information contained herein, and nothing contained in this Presentation is or can be relied upon as a promise or representation by the Managers or any of their

Representatives.

None of the Managers or any of their Representatives shall have any liability whatsoever (in negligence or otherwise) arising directly or indirectly from the use of this Presentation or its

contents or otherwise arising in connection with the Transaction, including but not limited to any liability for errors, inaccuracies, omissions or misleading statements in this Presentation.

Neither the Company, nor the Managers, have authorised any other person to provide investors with any other information related to the Transaction or the Company and neither the

Company nor the Managers will assume any responsibility for any information other persons may provide.

An investment in the Company involves significant risk, and several factors could adversely affect the business, legal or financial position of the Company or the value of its securities. The

Recipient should carefully review the chapter “Risk Factors” in the Presentation for a description of certain of the risk factors that will apply to an investment in the Company’s securities.

Should one or more of these or other risks and uncertainties materialise, actual results may vary materially from those described in this Presentation. An investment in the Company is suitable

only for investors who understand the risk factors associated with this type of investment and who can afford a loss of all or part of their investment.

This Presentation speaks as at the date set out on its front page. Neither the delivery of this Presentation nor any further discussions of the Company or the Managers with the Recipient shall,

under any circumstances, create any implication that there has been no change in the affairs of the Company since such date. Neither the Company nor the Managers assume any obligation

to update or revise the Presentation or disclose any changes or revisions to the information contained in the Presentation (including in relation to forward-looking statements).

The contents of this Presentation shall not be construed as financial, legal, business, investment, tax or other professional advice. The Recipient should consult with its own professional

advisers for any such matter and advice.

Note:

1) Please refer to important statements in the Risk Factors section

2


Disclaimer (cont’d)

This Presentation contains certain forward-looking statements relating to inter alia the business, financial performance and results of the Company and the industry in which it operates.

Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words “believes”, “expects”, “predicts”,

“intends”, “projects”, “plans”, “estimates”, “aims”, “foresees”, “anticipates”, “targets”, and similar expressions. Any forward-looking statements contained in this Presentation, including

assumptions, opinions and views of the Company or cited from third party sources, are solely opinions and forecasts and are subject to risks (including those described in the chapter “Risk

Factors” in the Presentation), uncertainties and other factors that may cause actual results and events to be materially different from those expected or implied by the forward-looking

statements. None of the Company or the Managers or any of their Representatives provides any assurance that the assumptions underlying such forward-looking statements are free from

errors nor does any of them accept any responsibility for the future accuracy of opinions expressed in this Presentation or the actual occurrence of forecasted developments.

The Managers or their employees may hold shares, bonds, options or other securities of the Company and may, as principal or agent, buy or sell such securities. The Managers may have

other financial interests in transactions involving such securities.

None of the Company or the Managers or any of their Representatives have taken any actions to allow the distribution of this Presentation in any jurisdiction where action would be required

for such purposes. The Presentation has not been registered with, or approved by, any public authority, stock exchange or regulated market. The distribution of this Presentation, as well as

any subscription, purchase, sale or transfer of securities of the Company, may be restricted by law in certain jurisdictions, and the Recipient should inform itself about, and observe, any such

restriction. Any failure to comply with such restrictions may constitute a violation of the laws of any such jurisdiction. None of the Company or the Managers or any of their Representatives

shall have any responsibility or liability whatsoever (in negligence or otherwise) arising directly or indirectly from any violations of such restrictions.

Neither the Company nor the Managers have authorised any offer to the public of securities, or has undertaken or plans to undertake any action to make an offer of securities to the public

requiring the publication of an offering prospectus, in any member state of the European Economic Area which has implemented the EU Prospectus Directive 2003/71/EC. The Presentation is

only distributed within the EU to persons who are qualified investors within the meaning of the EU Prospectus Directive 2003/71/EC.

In the event that this Presentation is distributed in the United Kingdom, it shall be directed only at persons who are either "investment professionals" for the purposes of Article 19(5) of the UK

Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or high net worth companies and other persons to whom it may lawfully be communicated in

accordance with Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “Relevant Persons”). Any person who is not a Relevant Person must not act or rely on this

Presentation or any of its contents. Any investment or investment activity to which this Presentation relates will be available only to Relevant Persons and will be engaged in only with

Relevant Persons.

This Presentation does not constitute an offer of securities for sale into the United States. The securities described herein have not been and will not be registered under the U.S. Securities

Act of 1933, as amended (the “Securities Act”), or with any securities regulatory authority of any state or other jurisdiction in the United States, and may not be offered or sold within the United

States, absent registration or under an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. In the United States, the securities described

herein will be offered only to qualified institutional buyers (“QIBs”) within the meaning of, and as defined in, Rule 144A under the Securities Act. Outside the United States, the securities

described herein will be offered in accordance with Regulation S under the Securities Act to non-U.S. persons (as defined in Regulation S).

The Recipient warrants and represents that (i) if it is located within the United States and/or is a U.S. person or in the United States, it is a QIB, (ii) if it is a resident in the United Kingdom, it is

a Relevant Person.

This Presentation is not an “offering memorandum” as defined under Canadian securities laws or a solicitation for the purchase of securities of the Company or any of its subsidiaries and

should not be considered to be the provision of investment advice or in furtherance of a trade in securities in any Canadian jurisdiction where it would be unlawful. The securities of the

Company and its subsidiaries will not be publicly offered in Canada. Any offering of securities of the Company and its subsidiaries in Canada will be made only by way of private placement (i)

on a basis which is exempt from the requirement that the Company and its subsidiaries prepare and file a prospectus with the relevant Canadian securities regulatory authorities and pursuant

to applicable requirements in the relevant Canadian jurisdictions, (ii) to persons or entities that are both "accredited investors" (as such term is defined in National Instrument 45-106

Prospectus and Registration Exemptions) and "permitted clients" (as such term is defined in National Instrument 31-103 Registration Requirements and Exemptions and Ongoing Registrant

Obligations), and (iii) pursuant to a Canadian offering memorandum incorporating the offering material of the Company and, if applicable, its relevant subsidiaries and certain prescribed

disclosure.

This Presentation is subject to Norwegian law, and any dispute arising in respect of this Presentation is subject to the exclusive jurisdiction of Norwegian courts.

Note:

1) Please refer to important statements in the Risk Factors section

3


Cautionary Statement

This investor presentation (the ”Investor Presentation”) has been prepared by Northland Resources S.A. (“NRSA”, “Northland” or the “Company” and

together with its subsidiaries, the “Group”). The Investor Presentation is being furnished for informational purposes only and nothing in here shall imply

that the Investor Presentation constitutes an offer to buy, subscribe or sell any securities of the Company. By receiving the Investor Presentation, you

agree to be bound by the following terms, conditions and limitations.

The information contained in this Investor Presentation has not been independently verified. No representation or warranty (express or implied) is made

as to the accuracy or completeness of any information contained herein, and it should not be relied upon as such. None of the Group or its directors,

officers, employees, advisors or representatives shall have any liability whatsoever arising directly or indirectly from the use of this Investor

Presentation. By receiving the Investor Presentation, you acknowledge that you will be solely responsible for your own assessment of the market and

the market position of the Company, and the restructuring and refinancing, and that you will conduct your own analysis and be solely responsible for

forming your own view of the potential future performance of the Company, its business and its shares and other securities. The content of this Investor

Presentation is not to be construed as legal, business, investment or tax advice. Each recipient should consult with its own legal, business, investment

and tax advisers to legal, business, investment and tax advice.

This Investor Presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and

“forward-looking information” as such term is defined under applicable Canadian securities laws. We have tried, whenever possible, to identify such

forward-looking statements and forward-looking information using words such as “anticipates”, “believes”, “expects”, ”plans”, ”intends”, “potential” and

similar expressions. Such forward-looking statements and forward-looking information reflect our current belief and are based on currently available

information. Accordingly, readers are cautioned not to place undue reliance on these statements as such forward-looking statements and forwardlooking

information involve known and unknown risks, uncertainties and other factors which may cause the Group’s actual results, performance or

achievements to differ materially from those expressed or implied by such forward-looking statements and forward-looking information. Further, forwardlooking

information is disclosure regarding possible events, conditions or results of operations that is based on assumptions about future economic

conditions and courses of action and includes future-oriented financial information with respect to prospective results of operations, financial position or

cash flows that is presented either as a forecast or a projection. Such risk factors include, among others, those factors discussed in the section entitled

“Risk Factors” of this Investor Presentation, the Company’s financial statements as at and for the period ended December 31, 2012, the annual

information form for the period ended December 31, 2012, and the management’s discussion and analysis of results of operations and financial

condition for the full-year ended December 31, 2012.

Except as required by law, we undertake no obligation to update or advise in the event of any change, addition, or alteration to the information contained

in this Investor Presentation, including such forward-looking statements and forward-looking information. This Investor Presentation does not constitute

an offer of the securities described herein.

Technical and Scientific Information Quoted in This Investor Presentation - Qualified Person (QP)

Matthew J. Blattman, PE, Managing Director for Blattman Brothers Consulting LLC, the Qualified Person as defined by the Canadian National

Instrument 43-101 and the companion policy, has approved the technical and scientific information in this Investor Presentation. Mr. Blattman is a

Registered Member of the Society of Mining, Metallurgy & Exploration (SME) (RM #4059667) and Registered Professional Engineer in the State of

Nevada, USA (MINE # 015254). Mr. Blattman, a consultant retained by the Company, has verified that the results presented in this Investor

Presentation have been accurately summarized from the results reported to the Group.

4


Key Risk Factors Relating to the

Group and its Business and Operations

Insolvency

Potential claims

Security risks and

restrictions

Approval of bond

offering

Drawdown on Bond

during Reconstruction

Capital and operating

expenditure

Iron ore price and

currency risk

Iron ore processing and

logistics solution

Breach and loss of

material contracts

The Group is in severe financial difficulty and is proposing to enter a restructuring (Restructuring) involving an extension and amendment of its existing

bonds, restructuring of supplier credit, a capital raising via the issue of new bonds and a court approved reconstruction (Reconstruction). Without the

Restructuring, it is likely that the Group will be required to be placed into insolvency proceedings, which may result in a significant loss of value to existing

bond holders. The Restructuring is subject to a number of conditions, including the raising of USD337 million of new money (net of Original Issue

Discount, USD 362 million gross) under the issue of new bonds and entry into binding documentation to effect the Restructuring transactions. Failure or

delay in satisfying the conditions and completing the Restructuring as planned will likely result in the Group entering insolvency proceedings.

The Reconstruction only relates to claims of unsecured creditors of Swedish Group companies as at 8 and 12 February 2013. Creditors of other Group

companies and subsequent claims will not be affected by the Reconstruction, and such creditors may take action or commence proceedings against the

Group. Also, if the Reconstruction is not approved, creditors which have not otherwise entered direct agreements with the Group may take action or

commence insolvency proceedings (it being a condition precedent to the Restructuring that no insolvency proceedings have been commenced).

Shareholders of the Company may also commence proceedings if the Company is found to have breached its obligations as a listed company in relation

to the timing of the Company’s announcement of its financial position.

The Group has pledged substantially all the assets of the Kaunisvaara project as security under the existing bond agreements and other debt facilities,

and such security will be extended to the new bonds. The extension of the security to the new bonds may be subject to clawback risks. If the security is

avoided, holders of the bonds would rank pro-rata with unsecured creditors who have not agreed to be bound by any waterfall or priority arrangements.

Also, the terms of the security places restrictions on the Group’s business and its ability to incur additional debt , as well as obligations relating to cash

generation. Failure to comply with such restrictions and obligations will result in an event of default, which may require such debts to be refinanced.

Certain shareholder approvals are required to complete the planned Restructuring. If shareholder approval is not obtained, the bond trustee will be

instructed to enforce share pledges over the entire share capital of Northland Sweden AB, in order to transfer Northland Sweden AB and its subsidiaries -

which own the Kaunisvaara project - to the bondholders. The remaining assets of the Company and its other subsidiaries will comprise mostly of nonproducing

exploration assets, following which such companies are likely to be wound up.

Disbursement of proceeds from the issue of the First Lien Bonds will be made prior to the court’s approval of the composition. While this risk may be

deemed as minor, as all creditors with claims above SEK 2.6m have provided written consents or pre-approvals to the proposed composition, a risk

remains that no composition would occur subsequent to the disbursement. Failure to obtain the composition would have a material adverse effect on the

financial condition of the Issuer and its ability to fulfill its obligations towards the bondholders.

The Group has previously experienced significant cost overruns and higher than expected capital and operating expenditures. To reduce the risk of future

cost overruns, the Group has renegotiated agreements to convert approximately 75% of all contracted capital expenditure from 1 January 2013 to 31

December 2014 from an open book basis to fixed cost. Such conversion is conditional on completion of the Restructuring and does not eliminate the risk

that the scope of work under those contracts may still increase, in turn, increasing costs. The Group may also continue to experience cost overruns in

respect of capital expenditure which remains on an open book basis.

Any significant or sustained reduction in iron ore prices, or in the reference prices for iron ore concentrates used in the Group’s off-take contracts, could

have a material and adverse affect on the Restructuring, the Group’s business, results of operations, financial condition and prospects. The Group’s

balance sheet, earnings and cash flow are and will be influenced by movements in the exchange rates of the USD against the SEK. Appreciation of the

SEK against the USD could materially adversely affect the Group’s business, results of operations, financial condition and prospects. The Group has no

hedging arrangements to limit its exposure against currency fluctuations.

The Group may experience problems to or delays in the commissioning of the remaining parts of its processing plant or in the application of its processing

technologies to the iron ore, and with respect to the contemplated second processing line, which are under construction and not completed. The Group

may also experience delays in the implementation of a permanent solution at the port of Narvik for the unloading, loading and storage of iron ore

concentrate and in the delivery of rail wagons specifically designed for the Group's use. A delay in or failure to achieve a permanent solution or delivery of

the wagons may have a detrimental impact on the Group's future operating costs and profitability.

Any significant delay in the production of iron ore concentrate, failure to produce iron ore concentrate to the required specifications, or any insolvency

event may breach and ultimately result in the termination of material contracts to which the Group is a party, including supply and off-take contracts

Note:

1) Please refer to Risk Factors section starting on slide 46 for further details

5


Agenda

Investment thesis

Northland Resources and the Kaunisvaara Project

Key Financials

Market Overview

Market Overview

Appendix

6

6


Transaction Background

• Budget process for 2013 identifies

significant capital need

• January 2013 transaction aborted, the

Company’s Swedish subsidiaries entered

Reorganisation

• Broad strategic review initiated to raise new

financing and negotiate terms with

suppliers and bondholders

• Due diligence conducted by multiple

financial and industrial parties, as well as a

group of restricted bondholders

• Available liquidity has set the time table to

resolve situation

• Bondholders have been advised by

Blackstone as financial advisor and

Bingham McCutchen as lead legal advisor

• Bondholder-led restructuring of Northland

Resources, supported by creditors

• Financing to be raised to target completion

of the Kaunisvaara project at full capacity by

Q3 2014

• The Company has received formal support

from Metso and Peab as its main suppliers

for the Reorganisation and Supplier Credit

Northland to launch a new senior secured

bond offering, supported by existing

bondholders

Northland expects to emerge from

Reorganisation around early July 2013,

subject to necessary approvals

• New Board to be appointed, with majority to

be nominated by creditors

7


Overview of Reorganization and Financing

1

2

3

4

Restructuring of

existing USD 370m

bonds

New USD 362m

senior secured

bond issue

USD 114m

Supplier Credit

Fixed price

contracts for

remaining Capex 3

• Reinstate USD 370 million bonds to a Mandatorily Convertible Second Lien Bond in NRSA with maturity 15 October 2020

• Bond to carry 4% PIK interest (semi-annually) to 2015, cash/PIK interest thereafter subject to Free Cash Balance as defined.

• Convertible into 80.5% of Pro Forma Post Restructuring Equity in NRSA at holders option from July 2013, while Company has

option to convert from July 2018, subject to refinancing of First Lien Bond

• Release of existing approx. USD 30 million on DSA, ranking super senior until the contemplated New First Lien Bond is funded,

assumed 24 May 2013

• New First Lien USD 362 million 2019 senior secured bond in Northland Resources AB

• Issue at 7% Original Issue Discount yields net proceeds to Company of USD 337 million

• 12% PIK interest until 2016, 12% cash interest on a pay-if-you-can basis in 2016 and 12% cash interest thereafter

• New first lien bond issued with warrants representing 14.2% of the Pro Forma Post Restructuring Equity in NRSA

• USD 50 million Tap Issue option at the company’s discretion (with same warrant structure)

• Approx USD 50 million 1 to be paid to trade creditors by year end 2013

• USD 114 million excluding VAT of outstanding payables (USD 145 million including VAT) to follow a payment plan with final

payment on 15 July 2020

• 4% interest accruing from 2013

• Repayment in equal semi-annual installments starting in July 2015 subject to cash interest paid to the First Lien Bonds. All

payments subject to Free Cash Balance as defined 2 .

• 75% of all contracted Capex (or approximately USD 370 million) from 1 January 2013 to 31 December 2014 on fixed price

• Of the remaining 25%, 4% are contingencies, and approx. 11% are target costs with fixed unit costs but variable amounts, where

learnings from the installation of process line 1 have been used to verify amounts

• Capex increased by USD 37 million, but risk substantially reduced

5

6

Governance

changes

USD 25-50m repair

issue

• Five new board members of seven total to be appointed by creditors, to complement two existing board members

• Three board members to be nominated by holders of existing bonds

• One board member to be nominated by holders of the new senior secured bond

• One board member to be nominated jointly by Metso and Peab

• Board to receive authority to issue 5% of the fully diluted equity post restructuring, plus additional shares for tap issue and

repair issue

• Public equity repair issue of minimum USD 25 million, and up to USD 50 million subject to bondholder approval, expected to be

launched post restructuring

• The Company’s share capital will be reduced from current CAD 51,417,889.90 to CAD 51,417.89 without the cancellation of

existing shares in the Company. The proceeds of the capital reduction shall not be distributed to the existing shareholders but

shall be allocated to the special distributable reserve of the Company.

1) In addition, approx. USDm 13 in payables cannot be deferred, and will be paid upon completion of financing

2) Metso and Peab interest and principal become payable from 2016, subject to available cash (See company press release

dated 29 April 2013 for detailed information on payment terms)

3) Subject to final agreement

8


Indicative Commercial Terms of the

Contemplated New First Lien Bond

Issuer

Northland Resources AB (publ)

Rating Will seek to obtain credit rating from Moody’s and S&P before 31 December 2013

Nominal

Amount

Tap issue

Price

Maturity

USD 362 million

Up to USD 50 million at discretion of the company (with similar warrant

structure)

93% (7% OID)

15 July 2019 at par value

Board member

rights

Intercreditor

Agreement

The First Lien Bonds may nominate one board member to the board of Northland

Resources S.A.

To regulate amongst others:

(i) the First Lien Bonds will rank senior to the claims under the Second Lien Bonds

(ii) the First Lien Bondholders will control enforcement of security until the First

Lien Bonds are repaid in full (subject only to carve-outs related to the Share

Pledge Enforcement

Interest

12% coupon

2013-2015: PIK interest

2016: Cash interest on a pay-if-you-can basis, otherwise PIK.

2017-maturity: Mandatorily payable in cash

Investor

Requirement

Documentation

i) Norwegian investors, ii) international institutional investors, iii) US 144A (QIBs as

defined in Rule 144A)

Term Sheet dated 7 May 2013

Investor Presentation dated 7 May 2013

Application Form dated 7 May 2013

Security

First Lien security and guarantees over substantially all of the assets of the

group (which excludes shares and assets of the Finnish Group). First Lien

security over shares in Finnish Group if shareholder approval obtained.

Application

Period

7 May 2013 –14 May 2013

The Company, together with the joint lead managers, reserve the right to close or

extend the Application Period at any time in their sole discretion.

Call structure

Allocation

Criteria

- NC3

- In year 4 @ 107.5%

- In year 5 @ 105.0%

- In year 6 @ 102.5%

Inter alia, i) existing ownership of bonds, ii) timeliness, iii) size of

subscription, and iv) investor quality. Allocation of bonds will be made at the

sole discretion of the joint lead managers

Settlement Date Expected to be on or about 24 May 2013

Use of

Proceeds

Conditions

Precedent

(i) financing various costs, capital expenditure and working capital in connection

with the development of the Kaunisvaara Project, (ii) refinancing of the Trade

Supplier Liquidity Funding and/ or the Commercial Creditor Short Term Funding,

and (iii) transfer of USD 15.0 million to the Parent Guarantor as provided for in

Permitted Upstream Advances .

Several conditions for closing of the transaction and pre-disbursement of funds

from Escrow Account

Guarantors:

Minimum

Subscription

and Allotment

Listing

(i) Northland Resources SA, (ii) Northland Sweden AB, (iii) Northland

Logistics AB, and (iv) Northland Logistics AS

Minimum subscription and allotment amount shall be USD 200,000, and

integral multiples of USD 100,000 thereof

Bonds to be applied listed on the OSE or another reputable exchange

Joint lead managers

and bookrunners

Co-lead manager

Arctic Securities ASA and Pareto Securities AS

Ocean Equities Ltd

Warrant

Structure

Warrants to be exercisable into 14.2% of the NRSA Post-Restructuring Pro

Forma Equity.

Note: Please refer to Term Sheet dated 7 May 2013 for more details

9


Overview of corporate structure and main

debt facilities post restructuring 1 10

USDm 362

1 st Lien* Bond

USDm 145 (incl.

VAT) Trade

Payables

USDm 370 2 nd

Lien* Convertible

Bond

USDm 370

intercompany

loan

Operating

Group

Northland Resources AB

(Kaunisvaara Project)

Northland

Logistics AB

Northland

Logistics AS

Northland

Resources S.A

Northland

Sweden AB

Northland

Mining Oy

Northland

Exploration

Sweden AB

*Security structure planned to be substantially the

same as for existing bonds but with the following

exceptions:

• The DSA to be cancelled; and

• The security by way of the Direct Agreements to

be cancelled (and the Direct Agreements

themselves to be terminated).

• Security assignment over the USD 370 million

intercompany loan

• Pledge over the shares NRSA holds in

Northland Mines Oy and intercompany

receivables owing to NRSA from time to time

from the members of the Finnish Group

• There will be an intercreditor agreement

established. The First Lien Bonds will rank

senior to the Second Lien Bonds in all respects

and will entirely control any enforcement of

security

• The proposed restructuring is subject to

receiving necessary agreements, acceptances

and approvals, including shareholder approval

in NRSA. If the restructuring fails, share pledge

enforcement procedures will be initiated,

resulting in current equity investors losing their

entire investment.

1) Subject to EGM approval


Funding Sources and Capital Structure

Summary of new funding to be provided

497

Capital Structure Post restructuring 31 Dec 2012 3)

USD millions

USD millions

30

16

Total

New bond (gross)

1,525

362

114

337

2nd Lien CB 3

370

Supplier credit (incl VAT)

Leases

Other

145

4 20

Book Equity

624

New bond

(net)

Supplier

credit 1

DSA release 2 Bondholder

funding

during

reorganization

Total

Post-restructuring

The 2nd lien Convertible Bond can be mandatorily

converted to equity from 16 July 2018 subject to

refinancing of the 1st lien bond

Note:

1) Exclusive of VAT. Total face value of supplier credit is USD 145 million (Financial model excludes VAT)

2) Approx, subject to FX movements

3) Based on Audited financials for 2012

11


Northland ownership post restructuring

and pro-forma financials

Fully Diluted Ownership Structure 1

Illustrative pro-forma financials 1

Investor

group

Current

shareholders

Type of

shares/

rights

Common

shares

# shares/

rights

(millions)

514.2 5.3%

Ownership

%

USD millions

Q4’12

Pro-forma post

restructuring

(unaudited)

Current

bondholders

New 1 st Lien

subscribers

Conversion

rights

7,866.9 80.5%

Warrants 1,388.3 14.2%

Equity (book) 624 624

Total assets 1,188 1,525

Equity per share 1.2 0.06

Total 9,769.4 100%

• In addition, the share count may be increased by:

• Shares corresponding to 5% of fully diluted share capital which

can be issued at the discretion of the board

• Any warrants in any tap issue of the new 1st lien bond

• Any shares issued in the contemplated repair issue

• The share count is shown before consolidation of

shares or the addition of shares cf the above

• 2nd lien convertible converts into a fixed number

of shares in Northland Resources S.A

• No compensation for interest accrued or

Paid in Kind upon conversion

• Conversion option for holders at all interest

payment dates starting 15 July 2013.

• The bonds can be mandatorily converted by the

Company from 16 July 2018 subject to full

refinancing of the new 1st lien bond

Note:

1) Before any share consolidation exercise, repair issue, or 5% of fully diluted share capital issued at the discretion of the

Board

12


Governance Changes to Give Creditors

Significant Board Influence

Two directors from the Existing

Board of Directors to remain 1)

• Matti Kinnunen (Acting Chairman) Mr. Kinnunen is presently

involved in international mining projects. He has a strong

background in Investment Banking at the Carnegie Group,

including member of the board, COO and Deputy CEO at the

Head Office in Stockholm. He has also served as a Board

Member of Nasdaq OMX Nordic Ltd.

• Stuart Pettifor (Director) Mr. Pettifor is a past Director and

COO of Corus Steel, and has operated steel mills in the UK,

Netherlands, Sweden and USA.

• Tuomo Mäkelä (Director) Mr. Mäkelä is the President of

Outokumpu Mining Oy. He has over 30 years of experience

directing exploration and development operations on steel alloy

metals and base and precious metal properties worldwide.

• Birger Solberg (Director) Mr. Solberg is the Managing

Director and CEO of Sibelco Nordic. He has broad international

experience in the extraction, sales and marketing of industrial

minerals, particularly some of the key minerals used in the iron

and steel industry.

• Carl-Michael Raihle (Director) President of Ovako Tube &

Ring and President and owner of the consulting firm Creation.

Previous positions include Executive Vice President and Chief

Technology Officer of Luvata group and senior positions at the

Outokumpu Group.

Board to be complemented with five Board Members

nominated by creditors

Bondholders’ nominees for new board members

• Leif Chr. Salomonsen Mr. Salomonsen is a founding partner

of Recore AS. He has more than 20 years’ experience in senior

management and directorship roles from various international

industrial companies including Norsk Hydro, Raufoss ASA,

Kværner ASA, TH Global Plc (formerly Trafalgar House) and

AlixPartners. Mr. Salomonsen has been advising Northland’s

management through the reorganization process at the request

of Norsk Tillitsmann

• Runar Nilsen Mr. Nilsen is a founding partner of Recore AS.

He has extensive experience from finance/ CFO roles and

management and directorship roles from various industrial

companies, including Raufoss ASA; TH Global Plc/ Kværner

Plc, Blueway AS and Northrop Grumman Park Air Systems AS.

Mr Nilsen has been advising Northland’s management through

the reorganization process at the request of Norsk Tillitsmann

• Two additional nominees to be identified

Peab and Metso’s nominee for new board member

• Peab and Metso to nominate one board member, to be

identified

Note:

Resignation of three existing directors to become effective, and appointment of five new directors

to be effectuated at EGM, subject to completion of financing and reorganization

1) Three of the existing members of the Board of Director will resign.

13


Northland in transition from Project to

Operating Company - Operationally derisked

Tapuli pit in

operation


• Tapuli pit already in operation

• Simple and conventional mining and processing

• Delivering ore tonnage according to mining plan

Processing plant

comissioned

Logistics chain

ramp-up

according to plan



• 1 st processing line commissioned according to operational plan

• Approx. 200,000 dmt produced until end-April

• Product quality in line with or exceeding operational targets

• Production increase option identified for additional 600,000 dmtpa production

• All elements of logistics chain tested and operating according to plan

• Some temporary solutions in place, expected to be replaced by permanent

solutions in 2013

• Three shipments of approx. 54,000 wmt each successfully completed

Permits in place


• All permits in place for Tapuli pit, and both production lines 1 (excluding sulphide flotation) at

Kaunisvaara plant

• Sahavaara environmental permit expected H2 2013 – required by end-2015

1) Environmental and mining permits in place, but additional mining permit required for Tapuli South from 2017.

14


Northland in Transition from Project to

Operating Company - Financially Derisked

From Project to

Operating Company

Northland is now in production and three shipments have been made to date

• Logistics chain is working, and is being upgraded and debottlenecked with the aim to

further lower OPEX

• Scalable business: Opex/t will be substantially reduced as production increases

2 nd process line is a

copy of 1 st process

line

• The 1 st process line is in operation, and output exceeds management’s expectations with

regards to quality and volume

• The 2 nd process line is largely a copy of the 1 st process line

Remaining Capex 75%

fixed cost

• USD 370m out of USD 498m remaining Capex until end-2014 on fixed price contracts,

materially reducing risk of cost overruns on remaining project execution

Sources and Uses – Illustrative Timeline

Sources and Uses Timeline

Planned 2013 Capex

Planned 2014 Capex

Planned 2015/1H 2016 Capex

2013 2014 2015-1H 2016

USD 359m

USD 139m

USD165m

Covered by

• 1 st Jan 2013 Cash on balance sheet USD 54m

• DSA release in total USD 46m

• Supplier Credit USD 114m

• New 1 st lien bond USD 337m

• Free cash flow from initial sales

To be covered by

• 1 st Jan 2015 cash balance

• Free Cash Flow

• Additional flexibility from

USD 50m Tap Issue option,

finance leases, and

prepayment facilities

15


Investment Case

Kaunisvaara

project to be

realised

Flexible

financing

structure

Strong project in

an attractive

location

Project

substantially

de-risked

Iron Ore market

Remains

Attractive

• Proposed bondholder-led restructuring provides total new financing of USD 497 million 1

• Projected to ensure project is fully funded on budget assumptions, and expected to secure

realization of Kaunisvaara Project

• Enables Northland to emerge from Reorganisation within 6-8 weeks, subject to necessary

approvals and proposed timeline

• Second Lien Convertible Bond represents de facto equity buffer, convertible from July 2013

and mandatory conversion provisions upon refinancing of the New First Lien Bond 2

• No cash interest or amortization of debt until completion of Kaunisvaara Capex program

• Strong cashflow conversion once project is fully realized, with limited maintenance capex

and significant tax credits available

• High-grade, low-impurity iron ore concentrate, achieving premium pricing

• Mining location with stable regulatory regime and access to existing logistics infrastructure

• 30% annual production increase opportunity identified for Process Line 1

• Upside from Pellivuoma and Hannukainen prospects

• Commissioning of first line completed, first three shipments delivered to end-users

• Initial indications confirming production volumes and product quality

• Up to 100% of volume sold under off-take contracts for 7-10 years

• Logistics chain performing as planned, still on some temporary solutions

• 75% of remaining Capex until end-2014 is on fixed-price contracts

• Key assumptions underlying funding need are considered conservative in a historical context

• Iron ore demand continues to grow driven by China

• New supply estimates continuously revised downwards

• Kaunisvaara concentrate is market leading on grade and impurities

1) Comprising USD 337m net New contemplated bond money, USD 114m Supplier Credit (excluding VAT), approx USD

30m (subject to FX movements) DSA release, USD 16m bondholder funding during Reorganisation.

2) Can be mandatorily converted to equity from 16 July 2018 subject to full refinancing of the New 1 st lien bond

16


Agenda

Investment thesis

Northland Resources and the Kaunisvaara Project

Key Financials

Market Overview

Risk Factors

Appendix

17

17


The Kaunisvaara project is located in Northern

Sweden

1

Kaunisvaara: Tapuli and Sahavaara, Sweden (100%)

Narvik

Kiruna

Gällivare

Sweden

Sweden

Finland

Norway

Norway

Finland

Pellivuoma 3

3 2 2 Hannukainen

1 Tapuli Kolari

Sahavaara

Pajala

Rovaniemi

Kemi

Tornio

Luleå

Oulu

Kaunisvaara Project Mineral Deposits

Rail Road Cities and Communities Existing Mines

2

3

• First production in December 2012 and

first shipment left for Tata Steel in Q1 2013

• Ramping up to ~4 million dmtpa* in Q3 2014 1

• High grade, low impurity iron ore concentrate

Potential Production upside

• Pellivuoma, Sweden (100%) and Hannukainen, Finland

(100%)

• DFS to be published shortly after a long term financial

solution has been secured

Extensive Exploration Targets

• Kupari Rautuvaara

• Rautuoja

• Untested but identified targets in Kaunisvaara area

Northland has material production upside from Pellivuoma, Hannukainen

as well as a portfolio of approximately 20 highly prospective exploration targets

* Dry metric tonnes per annum

Note: 1) Potential production upside identified by the Company, see further details on slide 31

18


Northland is listed in Oslo

Share overview Shareholder overview 2

Stock Symbol

NAUR

Current Share Price 1 NOK 0.49

Indices

MSCI NORWAY INDEX

Shares issued 514,178,899

Options 13,260,000

Warrants (Standard Bank) 1,697,995

Fully diluted 529,136,894

Market Cap 1

NOK 252m /(USD 43.8m)

52 week trading range 1 NOK 0.45 – 7.40

Bonds (OSE)

NORES01 / NORES02

Rank Holding % Shareholder

1 61,714,087 12.0 Handelsbanken, SWE+FIN (Cust.)

2 53,254,215 10.4 Avanza Bank AB (Custodian bank

3 51,546,147 10.0 Swedbank (Custodian bank)

4 46,864,912 9.1 Clearstream Banking

5 39,438,110 7.7

Nordnet Pensjon + Nordnet Bank

(Custodian bank)

6 36,708,811 7.1 SEB, SWE+FIN (Custodian bank)

7 17,903,507 3.5 Euroclear Bank (Custodian bank)

8 14,547,296 2.8 Nordea Bank (Custodian bank)

9 8,967,079 1.7 HQ Direct (Custodian bank)

10 6,785,400 1.3 Finnish Industry Investment

11 6,640,624 1.3 Pictet & Cie

12 6,295,473 1.2 Danske Bank (Custodian bank)

13 5,665,600 1.1 MP Pensjon

14 5,194,277 1.0 Anko Invest

15 2,692,000 0.5 UBS AG (Custodian bank)

Top 15 364,217,538 70.8

Northland has been delisted from the Toronto Stock Exchange as a consequence of the reorganisation.

Note:

1) Market Cap based on closing prices on April 30, 2013 on the Oslo Børs

2) Shareholder list as of April 30, 2013

19

19


Kaunisvaara from Bog to Mine in

less than two years

October 2010 October 2011 October 2012

March 2013

20

20


First concentrate from Kaunisvaara already

shipped

Primary AG/SAG mil

High quality iron ore concentrate

Northland’s rail car

First vessel loaded with 54.000t concentrate

leaves Narvik Port

21


Kaunisvaara Project Highlights

• Defined 165 million DMT in Reserves 1 for 17

year minelife with present production plan

• Fully permitted to first production 2

• Sahavaara environmental permit expected second half of

2013

• Simple and conventional mining and processing

• Logistics are 100% controlled, utilizing existing

infrastructure and new terminal in Narvik

• Narvik terminal is on a temporary lease for a period of 10

years until end-2022, which may be extended until 2026

under certain conditions 3

• Producing premium magnetite product with high

Fe% and low impurities

• Up to 100% of output sold under off-take for

7–10 years

• Located in established mining jurisdiction with

very low political risk

Note: 1) See slides 67-68 for quantities and grades of proven and probable reserves

2) For production from Tapuli pit. The long term production plan assumes the opening of the Sahavaara pit, for which an

environmental permit is required.

3) See Risk Factors for further details

Sources: Mineral Reserve Statement generated by SRK Consulting (UK) Limited and Northland made public June 1, 2011

22

22


Kaunisvaara Project Overview

Kaunisvaara (Tapuli and Sahavaara)

100% controlled by Northland Resources

Source:

Northland

23


Kaunisvaara: Expected Key Future Milestones

Key Milestone Expected Completion Date Impact

Full commissioning of

Process Line 1

Switch from temporary

logistics chain to permanent

logistics chain

Full Commissioning of

Process Line 2

Environmental permit

Sahavaara

Commence Sahavaara

mining

Q3 2013

Q3 2013

Q3 2014

2H 2013

Q1 2016

Achieve 2 million dmtpa

production volume

Reduction in operating costs

Increase production to runrate

of ~3.9 million dmtpa

(excluding identified

production increase option)

Enables opening of

Sahavaara mine

Reach steady-state

production of 4.3-4.5 million

dmtpa

24


Production to Reach 4 dmtpa in Q3 2014

Expected Production pipeline

• Tapuli mine and Kaunisvaara plant:

– Expected production in the 9 months ending

December 31 2013: 1.2 million dmt

Million

DMT

– Expected to reach a run rate of 3.9 million

dmtpa in Q3 2014

Sahavaara

Tapuli

• Sahavaara production is expected to

commence in late 2016 1) , while Tapuli

production will be scaled down

3.9

• Potential upside from increased Tapuli

production, development of Pellivuoma,

Hannukainen and additional exploration

properties

1.2

2.9

3.1

1.8

• Production from 2017 and onwards is

expected to be 4.3-4.5 dmtpa

• Life of mine estimated until 2028 based on

current Reserves and production schedule

2013 9m 2014 2015 2016 2017

Company estimates annual production levels 2017-2028 to

be approximately 4.3-4.5 dmtpa

Potential production upside of 600,000 dmtpa from Process

Line 1 upgrade is not included in the estimated production

Note: 1) Environmental permit is required for Sahavaara

Further detail available in the Royal Haskoning DHV report dated 16 April 2013 as published on the Company’s website

Source: Northland

25


Benefitting from Existing

Transportation and Logistics Network

Port of Narvik

1

• Swedish Transport Administration has granted

year-long dispensation for 90 tonne trucks

Road

• New trans-loading terminal at Pitkäjärvi providing

access to railway

3

Narvik

Pitkäjärvi

2

1

Finland

Kolari

Pajala

2

Railway

• SEK 1.3 bn. investment by the Swedish

Government will ensure the capacity of existing

150 km public road from Kaunisvaara to Pitkäjärvi

• Existing 226 km Malmbanan “the Ore Railway” has

capacity to meet projected demand

• Railway owned by Swedish and Norwegian state

and is “open access”, requested four slots have

been granted

Norway

Sweden

Kaunisvaara

Luleå

• In total SEK 0.8 bn will be invested by the Swedish

Government to upgrade and increase capacity

• The Parliament requested the Government to

evaluate a railway from mine to Pitkäjärvi

0 25 50 100

km

Trucking Route

Rail Route

3

Port

(Narvik)

• Port Authority agreement for use of existing port 1

Northland is constructing a new iron ore terminal

with storage facility

• Up to 10 million tonnes capacity when completed

• Uncongested port can take Capesize vessels and

is ice-free all year round

Well-maintained, existing infrastructure, with good accessibility

Note: 1) 10-year temporary lease until end-2022, which may be extended until 2026

under certain conditions, see Risk Factors for further details

26


Strong Logistics Partners Ramping

Up the Logistics Chain

• Existing roads from Kaunisvaara to Pitkäjärvi

• Swedish Transport Administration has granted the

year-long dispensation for 90 tonnes truck 1

• Peab responsible for truck operations

• Pitkäjärvi re-loading terminal now operating

• Required permits in place

• Temporary solution now in use, standard boxcars

• Locomotives provided by operator, Green Cargo

• Kiruna Wagon railcars under construction, deliveries

in Q1-Q3 2013

• Savage Rail responsible for rail operations

• New Port Terminal under construction in Narvik, all

permits in place 2

• Temporary solution now in use

• New Port expected to be complete in Q3 2013

• Grieg Logistics responsible for port operations

Note: 1) Yearly approvals in accordance with regulations

2) The port is operated under a 10-year lease until end-2022, which may be extended under certain conditions.

See Risk Factors for further details

Source: Northland

27


Off-take Agreements in Place for up

to 100% of Production 1 28

• Agreement signed November 2010 for delivery of 60% of annual

production of iron ore concentrate for at least 10 years

• Pricing to take into account the high product quality

• The parties will co-ordinate and co-operate in marketing and sales

activities

• Agreement signed October 2010 for delivery of up to ~1 million

wmt iron ore concentrate for 7 years

• Pricing to take into account the high product quality

• Agreement signed in June 2010 for delivery of 20% of annual

production of iron ore concentrate for 8 years from 2012

• Pricing to take into account the high product quality

• Major European steel mills expected to be initial buyer with price

including both Fe premium and value in use

Note:

1) Pricing described above is being agreed with the off-take parties and is different from

the methodology in the off-take documentation. New documentation expected, which will

reflect the pricing methodology described above. See risk factors for additional details.


Kaunisvaara Premium Concentrate

Expected to Generate Premium Pricing

• Kaunisvaara pellet feed offers great Value-in-

Use

• Expect extremely high Fe-content of 69% Fe vs

62% Fe Benchmark

• Low silica and alumina content lead to lower flux

additions, less slag and lower energy

consumption

• High MgO content replaces other fluxes

• Magnetite generates heat during oxidization,

which reduces pellet plant energy consumption

• Particle size suited for pelletizing without need for

further grinding, saving costs and energy

• Very low levels of trace elements, e.g. K, Na, P

and V bring advantages to the steel producers

• Low moisture, high Fe content and favourable

port location gives shipping advantage

• Shipowners charge rate per wet metric tonnes

but iron ore customers evaluate cost per Fe Unit

delivered

Kaunisvaara Product Specification

Fe >69%

Sulphur (S) 0.04%

Silica (SiO 2 ) 1.50%

Alumina (Al 2 O 3 ) 0.15%

Lime (CaO) 0.04%

Phosphor (P 2 O 5 ) 0.04%

Magnesium Oxide (MgO) 2.0%

Titanium Oxide (TiO 2 ) 0.08%

Particle size

40 micron

Moisture (H 2 0) ~6%

Production quality to date exceeds company’s expectations

29


Expected Pricing of Northland’s Premium

Concentrate

Current pricing for Asian deliveries

USD/dmt

136

Reference

price China

(62% Fe)

25 April

Current pricing for European deliveries

USD/dmt

136

Reference

price China

(62% Fe)

25 April

Grade

adjustment

18

18

Grade

adjustment

153

69% Fe

Price China

153

69% Fe

Price China

18

Freight

Brazil-China

23

Freight

Narvik-China

4

Freight

differential

5

VIU Premium

3

VIU

Premium

135

Price FOB

Narvik

142

Price FOB

Narvik

• Pricing model based on reference price

in China with adjustments for grade,

freight differentials and Value-In-Use

• Prices negotiated and agreed directly

with end-users

• Ongoing negotiations with end-users

support management’s assumptions on

grade premiums and VIU-premiums

• 40% of production to be sold to Europe,

40% to MENA and 20% to Asia

• Unique price for each end user due to

differences in freight, grade, off-take

agreement terms, and VIU

• Deliveries to MENA expected to give

similar prices as deliveries to Europe.

Note:

Actual revenue received by Northland Resources will depend on commissions and discounts

30


Potential production upside

Upgrade Increases Production Volume from the Tapuli mine

• Process line capacity upgrade is possible with minimal increase of Capex

• Production increases from the Tapuli line of c. 30%, approximately 600,000 dmtpa of additional concentrate

• Upgrading can be done in Q4 2013 with increased production possible from early 2014

• The study of the upgrade of the process line is done on DFS level with input from Metso and external engineering

consultants

• The production increase is spread over the entire life of the mine but for conservatism not included in the near term

cash flow projections

Investments Required and Expected Operating Cost

• Investment: USD 10m in total 2013-2014 is included in the current Capex estimate

• Opex for the additional tonnage at same level as LoM opex for the Kaunisvaara area

The mining review for the study has been done internally and is based on the existing

Reserve and Resource report for the Tapuli mine

The study is performed by Northland with 3 rd party support, but has not been independently verified.

The study is ongoing and has not been finally concluded.

31


Phase 2 of our Growth Strategy –

Pellivuoma

Green = Measured;

Blue = Indicated;

Red = Inferred;

Whittle pit shell

(based on a metal price

of 110 US¢/dmtu)

• Asset owned by Northland Resources AB, and located approximately 15 km west of Kaunisvaara

• The Company has reported, in the NI 43-101 compliant report “Mineral Resource Estimate for the Pellivuoma Iron

Deposit, Pajala Municipality, Norrbotten County, Sweden, March 26, 2010 by SRK Consulting (UK) Ltd.”, that Pellivuoma

contains 38.5 Mt with 30.1% Fe in the measured category and 18.8 Mt with 29.9% Fe in the indicated category.

Additionally, the deposit contains 37.8 Mt with 29.3% Fe classified as Inferred Mineral Resources

• The deposit has the potential to make a significant contribution to the resource tonnage of the Kaunisvaara area

• Potential scenarios include an increase in the production of high grade concentrate, or an extension of the life of the

Kaunisvaara operation in combination with an increase in production

• Definitive Feasibility Study is underway and is expected to be published after a long term financial solution has been

secured.

Source: Pellivuoma Technical Report dated April 2010.

32


Further Growth Potential –

Hannukainen

• Brownfield project located in Northern Finland

• Open pit mine operated by Rautaruukki and Outokumpu during the 1970s and 1980s

• Expected production rate of 2 million tonnes per annum of ~68% Fe iron ore concentrate

• Copper/gold concentrate by-product is expected to be a major revenue contributor

• Definitive Feasibility Study is expected to be published after a long term financial solution has been

secured

33


Agenda

Investment thesis

Northland Resources and the Kaunisvaara Project

Key Financials

Market Overview

Risk Factors

Appendix

34

34


Update on Operating Cost

Expectations

• During the budgeting process in late 2012 the company rebuilt its Opex budget bottom-up

• The budget shows a higher operating cost in ramp-up phase due to lower volumes to split fixed cost between, and

added costs of intermediary solutions in the logistics chain, as well as FX changes

• The budget supports the long-term operating cost (in SEK) from the DFS and the Royal Haskoning DVH report

published on the Company’s webpage; Life of Mine (LoM) operating cost close to DFS cash cost adjusted for

USD/SEK

• Currency split for Opex is expected to be: SEK 85-90%, NOK 5-7%, USD 5-7%

• Operating cost excludes corporate G&A which is expected to be USD 15-20m per annum with 60-80% in SEK, and

approximately USD 10 million corporate G&A related to Finland in 2013-2014

Operating cost during ramp-up (USD/DMT) 1

Life of Mine operating costs (USD/DMT)

Commissioning

147

Decline due

to shiploader

startup

Decline due

to second

process line

start-up

DFS 2012

update

(USDSEK

8.125)

Jan 2013

update

(USDSEK

6.90)

April 2013

update

(USDSEK

6.45)

Mining 18.4 21.9 23.4

104

101

72

67

Processing 12.5 14.4 15.0

Maintenance 0.4 0.9 1.0

G&A 1.4 1.3 1.4

Logistics 22.4 28.3 30.0

1H2013 2H2013 1H2014 2H2014 LoM

Royalties 0.4 0.4 0.4

Total 55.4 67.1 71.1

Note: Opex/tonne estimates post 2014 as well as LoM are generally in line with the Royal Haskoning DHV report dated 16 April

2013 as published on the Company’s website, and are real term estimates excluding inflation

1) At USD/SEK = 6,90

35


Update on Total Capex Changes

Since 2012 DFS Update

Projected Kaunisvaara and Logistics Development

Capital Expenditure until 31 Dec 2014

Kaunisvaara and Logistics Chain

Capital Expenditure Deviations

USD 257m capex , USD 11m

additional contingency and USD

10m possible costs

Total capex variance USD 278m

875

179

696

2012 DFS update

Contingency

Logistics chain

Kaunisvaara project

1,153

21

260

867

April 2013 update

DFS 2012 update vs. 2013 April update

• Main contractual variances:

• USD 49m Civil works

• USD 62m Various logistical works

• USD 75m Installation and infrastructure works

• USD 10m Upgrade Processing Line #1

• USD 33m Norwegian rail upgrade

• USD 23m Overburden removal Tapuli mine

• USD 5m

Electrical installation

• Including USD 21m additional contingency on

unawarded works and for possible costs related to the

Reorganisation

• USD 278m Total capex variance

• Due to

• No basic engineering at construction commencement

in order to accelerate execution time schedule: order

key lead time equipment

• Increased material quantities and unit prices

Allowed production start 12 – 18 months earlier

36


Projected Capital Expenditure Until 2014

Projected Kaunisvaara and Logistics Development Capital Expenditure Until End of 2014

USDm

USD 498m

139

359

Total remaining capex including

contingency and possible costs

related to the Reorganisation is

expected to be USD 498m to

complete Kaunisvaara both lines 1

Until YE 2012

2013

2014

Kaunisvaara capex

until YE 2014

Additional capex in 2015 and 2016 related to the development of Sahavaara mine (including flotation circuit, overburden

removal, civil works, crushing station and conveyors and mine equipment) is estimated to be between USD 165-175 million

Note: 1) Inclusive of the net capex amount of outstanding accounts payable of USD 114 million (exclusive of VAT). Excluding of rail

cars cost of USD 32m, assumed to be financed on an operating lease for which a term sheet has been provided.

37


Breakdown of Expected

Remaining Capex Until End-2014

Breakdown of expected remaining Capex until end-2014

Logistics

Contract

Currency USDm

Additions

USDm

Civil works Narvik NOK 46 5

Norwegian rail upgrade NOK 25

Shiploader EUR 12

De-icing and unloading station SEK 3

Reloading terminal and access road Pitkäjärvi SEK 5

Railway Cars paid to YE - to be reimbursed SEK -8

Misc USD 5

Total committed 88 5

Kaunisvaara

Process systems and electrical installation USD 135 10

Process systems installation increased cost USD 31 36

Mobile mine equipment USD/EUR 58

Civil works Kaunisvaara SEK 41

Tapuli Mine Overburden SEK 14

Misc USD 8

Total committed 287 46

Water Systems phase 2 EUR 4

Tailings Management Facility SEK 15 (6)

Civil works line #2 SEK 10 2

Investments Operations SEK 14

Project team USD/SEK 12

Total uncommited 55 (4)

Possible costs related to the Reorganisation 10

Additional contingency 11

451 47

Total Capex $498m

Comments

• 75% of capex (USD 369m) is on fixed-price

contracts 1

• Remaining USD 129m is split on USD 53m target

costs 2 with fixed unit costs but variable amounts,

where learnings from the installation of process

line 1 have been used to verify amounts; USD

55m uncommitted; and USD 21m contingencies

• Total contingencies of USD 21m corresponding to

19% of USD 108m non-fixed costs

• USD 10m for upgrade of first process line to

achieve 30% increased production included

• Exchange rates for the committed Capex have not

been fixed, and USD amounts are based on the

following exchange rates assumptions:

- USDSEK: 6.90 (SEK denominated Capex

represents approx. 22 % of expected Capex)

- USDNOK: 5.73 (NOK denominated Capex

represents approx. 16 % of expected Capex)

• FX adjustments for USD/SEK to 6.45 adds USD

7m of Capex up to year end 2014

• Capex excludes rail cars cost of USD 32m,

assumed to be financed on an operating lease for

which a term sheet has been provided

• Sustaining Capex expected to be about USD 7-10

million p.a. post completion of Sahaavara

Note:

1) Price is fixed based on a defined scope

2) Price per unit is fixed, variable amounts. Target cost based on estimate of amount.

3) Capex in USD is estimated at 51% 2013 and 68% 2014, average ca. 50% going forward

38


Sources and Uses starting

1 Jan 2013 ending 31 Dec 2014

Sources and Uses (1 Jan 2013 – 31 Dec 2014)

Jan 2013 - Dec 2014 Funding Requirements - Pre Financing

USDm

Opening Cash at January 1, 2013 54

Capex excl. Contingencies but including Tapuli process line upgrade (477)

Operating Cash Flow & Group Costs 79

Railcar Leases (5)

Funding Need Pre-Adjustments, Contingencies, Trade Payments & Fees (349)

Adjustments

FX (USDSEK 6.90 -> 6.45) ¹ (31)

FOB Sales Price Adjustment ($130/dmt -> $120/dmt) (40)

Funding Need Pre-Contingencies & Trade Credit Payments & Fees (420)

Possible costs related to the Reorganisation (10)

Funding Need Pre-Trade Credit Payments & Transaction Expenses (430)

Payments to Trade Creditors

Cash Collateral for main suppliers, Letter of Credit (10)

Funding Need Before Transaction Expenses at YE2014 (440)

Q4 14 Cash Flow backed out to arrive at Funding Need at Minimum Cash Point ² (23)

Transaction expenses (16)

Gross Funding Need (at Minimum Cash Point at the end of Q3 14) (479)

DSA Funding to Date 16

Available DSA Release (approx, subject to FX movements) 30

Supplier Loan ex-VAT ³ 114

Net Funding Need (at Minimum Cash Point at the end of Q3 14) (319)

Cash Funding from New Money (1 st lien senior secured bond) 337

Q4 14 Cash Flow 23

General Capex contingency (11)

Cash to Balance Sheet at December 2014 post contingencies 30

Comments

1) Current USD/SEK rate of 6.50; upside of USD 7m for every 0.1

increase in the quoted FX rate (from 6.45) due to SEK depreciation

2) Cash flow generated during Q4 2014

- Funding need at minimum cash point at the end of Q3 2014. Estimated USD

23m free cash flow (sales less Opex and Capex) generated until end-2014.

3) Supplier loan break down

USD million

Parked debt inclusive of VAT 207

Adjustments supplier cost that cannot be deferred -13

Payments to be made to suppliers on claims less than 2.6 MSEK -10

Payments to be made up to 2.6 MSEK to suppliers with larger claims -6,4

Payments to be made up to 2.6 MSEK to main suppliers -2,6

Payment pro rata to all suppliers above 2,6 MSEK -30,0

Parked debt inclusive of VAT net of 2013 payments 145

VAT adjustment for payments -31

Parked debt exclusive of VAT for supplier loan 114

Not included in Sources and Uses table:

USD 50m Stemcor prepayment facility potential upside

- Signed term sheet for a prepayment facility of up to USD 50m,

subject to achieving certain production and delivery milestone

- Currently not included in the Sources & Uses

USD 6m Atlas Copco Lease potential upside

- Facility in place, draw down has been done during Reorganisation.

Available but not included in the Sources & Uses.

USD 35m Cat Finance lease potential upside

- Draw stop. Needs to be reconfirmed after Reorganisation

Currently not included in the Sources & Uses.

USD 17m (net) Ship Loader lease potential upside

- Signed term sheet in place, awaiting credit committee approval and

documentation. Currently not included in the Sources & Uses

Note: Company does not expect any material cash taxes in the foreseeable future

1) FX adjustments impacts capex (in USD) as well as cash flow through the impact on opex In USD 39


Agenda

Investment thesis

Northland Resources and the Kaunisvaara Project

Key Financials

Market Overview

Risk Factors

Appendix

40

40


Budget Assumptions in a Historical Context

Iron Ore price development and assumption

USDSEK development and assumption

200

190

180

170

Iron Ore 62% Fe CFR China

Average

Budget assumption 69% Fe

8.2

8.0

7.8

USDSEK

Average

Budget assumption

160

150

140

7.6

7.4

130

120

110

7.2

7.0

100

6.8

90

80

70

6.6

6.4

60

50

40

6.2

6.0

30

20

10

5.8

5.6

0

1/1/09

7/1/09

1/1/10

7/1/10

1/1/11

7/1/11

1/1/12

7/1/12

1/1/13

7/1/13

5.4

1/1/09

7/1/09

1/1/10

7/1/10

1/1/11

7/1/11

1/1/12

7/1/12

1/1/13

7/1/13

Source: Bloomberg

41


Chinese Steel Demand is Expected to

Grow

Finished steel product demand (kg/capita)

Chinese steel demand (million dmtpa)

Million dmtpa

South Korea

982

1 157

1 400

Japan

507

602

1 200

1 000

China

266

460

800

USA

285

357

600

India

37

57

400

200

Other Asia

54

60

2005 2011

0

2000 2005 2010 2015 2020 2025 2030

Source: Intierra RMG as of September 2012

42


Forecast Iron Ore Supply Being

Revised Downwards

Global Iron Ore Supply Outlook

Comments

Million tonnes

2,600

2,400

2,200

2,000

1,800

1,600

1,400

1,200

1,000

800

600

400

200

1,970

1,791

1,719

Forecast Jan 2011 Forecast Sep 2012 Forecast Apr 2013

2,084

1,924

1,797

2,265

2,107

1,970

2,420

2,176

2,094

2,542

2,215

2,222

• Funding markets closed to

early stage developers

• Many of the African and

Latin American projects

progressing slowly / not at

all

• BHP postponed the

development of the Outer

Harbour

0

2012E

2013E

2014E

2015E

2016E

Source: Morgan Stanley Equity Research January 2011, September 2012 and 23

April 2013 43


Gap in Planned New Production

and Execution

Million tonnes

annualized capacity

700

600

500

400

300

200

100

0

609

Announced for 2008 - 2010

-58%

255

Completed by YE 2010

While iron ore consumption is

expected to stay robust over the

next several decades, iron ore

supply continues to lag behind as

competition for labor, energy and

project financing increase,

approval processes lengthen

further and costs in remote areas

continue to escalate.

Million tonnes

annualized capacity

1 000

800

815

600

400

200

0

Announced for 2011 - 2013

124

Completed by YE 2011

Source: Intierra RMG as of January 2013

44


Kaunisvaara Concentrate –

Quality Leader

Northland

Best in-class magnetite iron ore content and low silica/alumina lead to lower flux additions,

less slag and lower energy consumption

Source: Northland and Haywood Securities as of February 2012

45


Agenda

Investment thesis

Northland Resources and the Kaunisvaara Project

Key Financials

Market Overview

Risk Factors

Appendix

46

46


Risk Factors

Risks related to the proposed Restructuring

A number of risks may adversely affect the Company (together with its subsidiaries the Group). Below is a summary of the most relevant risks relating to the proposed restructuring of the Group

described in this presentation and to the Group and its business operations. The risks listed below are not the only risks facing the proposed restructuring and the Group. Additional risks not

presently known to the Group or currently deemed immaterial may also adversely affect the proposed restructuring and the Group’s business, financial position and operating results. If any of the

risks summarised below should actually occur, the proposed restructuring and the Group’s business, financial position and operating results could be materially and adversely affected.

Further risks facing the Group and its business operations are described in the Company’s financial statements as at and for the period ended December 31, 2012, the annual information form for

the period ended December 31, 2012 and the management’s discussion and analysis of results of operations and financial condition for the year ended December 31, 2012.

Risks relating to the proposed restructuring

The Group is in severe financial difficulty and a failure to implement the proposed restructuring, and in particular a failure to raise the USD 362m new senior secured bond, may result in

the Group ceasing to be able to carry on business and it entering into insolvency proceedings

The Group is currently in severe financial difficulty and does not have sufficient cash balances to meet its short term liabilities as they fall due. As a result of its severe financial difficulties, the

Company is proposing to enter into a restructuring (the Restructuring) involving the amendment and extension of its existing USD 370m bonds (Second Lien Bonds), a restructuring of its existing

USD 114 million (excluding VAT) of supplier credit, a capital raising of USD 362m new senior secured bonds (First Lien Bonds) and a court approved Reconstruction to achieve a deferral and

payment plan with unsecured creditors of the Northland Operating Group (as defined below).

Without the Restructuring, including in particular the issue of the First Lien Bonds, it is likely that the Group will be unable to continue operating and will likely be required to be placed into insolvency

proceedings, which may, in turn, result in a significant loss of value to existing holders (Existing Bondholders) of the Second Lien Bonds and shareholders of the Company. See “The Group faces

significant short term liquidity and funding shortfalls and the risk of insolvency” below for further details of the risks associated with insolvency proceedings.

The implementation of the Restructuring is subject to a number of conditions, some of which have already been satisfied, including (i) the consent of Existing Bondholders to certain amendments to

the terms of the Second Lien Bonds, (ii) the agreement of Peab and Metso to the Restructuring in so far as it impacts them and certain commercial arrangements, (iii) the commitment of the

Company and certain other Group companies to supporting and implementing the Restructuring, and (iv) the receipt by the bond trustee of evidence that the court appointed Reconstructor (as

defined below) has received from three-quarters (in amount and number) of the relevant unsecured creditors their consent and pre-acceptance of the Reconstruction Plan (as defined below).

Of the remaining conditions to the Restructuring, the most significant is the advance of gross USD 362 million of new money under the First Lien Bonds. The advance of such funds under the First

Lien Bonds and the amendment of the terms of the Second Lien Bonds are each conditional upon the other occurring. In addition, the agreements reached with Peab and Metso are also conditional

upon full subscription of the gross USD 362 million of new money under the First Lien Bonds. The failure to raise gross USD 362 million of new money under the First Lien Bonds will, therefore, likely

result in the Restructuring not being implemented which would, in turn, likely result in the Group ceasing to trade and insolvency proceedings being commenced.

The terms of the Restructuring are set out in a non-binding term sheet agreed between the Company, certain Existing Bondholders, the Reconstructor, and Metso and Peab, and it is a condition to

the Restructuring that definitive legal documentation effecting the transactions contemplated by the Restructuring are entered into. The key stakeholders in the Company – being the persons

mentioned to above – have participated in the detailed negotiation and agreement of the term sheet. However, there is a risk that it will not be possible to reach agreement on the final

documentation, that agreement is delayed or that the terms of the agreement are, in a material respect, different from those set out in the term sheet. Any failure to agree the final documentation will

likely, and any delay in agreeing or change in the terms of the final documentation may have a material adverse effect on the Group, including the Group ceasing to trade or the commencement of

insolvency proceedings.

In addition, the Restructuring is conditional upon no member of the Group having entered into insolvency proceedings. Whilst (i) the Existing Bondholders, Peab and Metso have agreed to the terms

of the Restructuring and (ii) the Company has received consent and pre-acceptance from such number of relevant unsecured creditors as is specified above, other creditors, such number believed to

represent in total less than 5 per cent of the total debt obligations of the Group, may commence insolvency proceedings or take other action against the Company. In addition, should the

Reconstruction Plan not be approved, the moratorium imposed by the Reconstruction would be lifted and unsecured creditors who would have otherwise been subject to such moratorium may also

commence insolvency proceedings. Should insolvency proceedings be commenced prior to implementation of the Restructuring, there is a risk that all the companies in Reconstruction will be

declared bankrupt. Whilst the Company believes that, assuming implementation of the Restructuring, it will have sufficient funds to meet the claims of any such creditors, there is no guarantee that it

will be able to do so, and any claims made by or insolvency proceedings commenced by any such creditors may have an adverse impact on the Restructuring and the business and operations of the

Group. See also “The Restructuring will not bind all creditors of the Group, and such creditors will still have claims against the Group”.

47


Risk Factors (cont’d)

Risks related to the proposed Restructuring (cont’d)

The Reconstruction Plan may be challenged

Northland Resources (publ) AB filed for and was placed under company Reconstruction on 8 February 2013 and Northland Sweden AB and Northland Logistics AB on 12 February 2013 (together

such companies being the Northland Operating Group) in accordance with the Company Reconstruction Act (Lag om företagsrekonstruktion, the Act). The objective of Reconstruction is to reach

an agreement with unsecured creditors of the Northland Operating Group (the relevant unsecured creditors) to restructure the company's debt and restore financial viability. The court has

appointed an administrator (the Reconstructor) to each of the companies constituting the Northland Operating Group. It is for the Reconstructor to supervise the process. During such time as the

Northland Operating Group are under Reconstruction a moratorium applies and no unsecured creditor may enforce its claim or petition the court in bankruptcy against an entity. The reconstruction

process does not impact secured creditors.

A company is placed under reconstruction for a period of three months, or such longer period extended by the court for a period not exceeding a total twelve months. On 8 and 12 May 2013,

respectively, an extension of the Reconstruction will be sought for a further three months. Whilst there is a limited risk that the Reconstruction will not be extended, that risk is not considered to be

material because the bondholders, Peab and Metso will second the application. The court will normally grant extension when supported by larger creditors, as in this instance.

The reconstruction process has allowed the Company time to develop a proposal for the unsecured creditors of the Northland Operating Group and it is expected that the proposal (the

Reconstruction Plan) will be distributed to creditors by the Reconstructor in the week starting 13 May 2013.

A request for 'composition proceedings' is expected to be made to the Court in the week starting 13 May 2013. If adopted, a creditors meeting will be held within 3-5 weeks of the request, at which

unsecured creditors of the Northland Operating Group will vote on the proposal. The proposal is approved if a three-quarter majority of both number and aggregate claims vote in favour of the

proposal. As at the date of this presentation, written consents or pre-acceptance of payment terms have been received from a sufficient number of unsecured creditors such that this requirement has

been satisfied. Once the proposal is approved, it will bind all unsecured creditors of the Northland Operating Group. Following the approval of the proposal, there is a three week appeal period.

A further obstacle may however be if the proposed composition does not fulfil the conditions of the Act, e.g. if it would be deemed that the composition does not provide all similarly entitled creditors

with similar rights. Should this be the case then the proposal could be challenged in which case the court may not approve (Sw. fastställa) the composition or, if approved by the court, be the basis

for an appeal which could result in the initial approval being overruled.

Application to terminate the Reconstruction will be made once the proposal is approved and the appeal period has lapsed. Depending on the timing of the creditors meeting, the Northland Operating

Group is expected to emerge from reconstruction around early July 2013. It is possible however that delays in the time schedule may occur; for example creditors may challenge the grounds and/or

amounts of other creditors’ claims, and are also entitled to pursue recovery claims, for example payments made shortly before the applications for Reconstruction. Such disputes must be solved

within the framework of the composition proceedings, and therefore may delay the date on which the Company is to emerge from Reconstruction.

In the event that the Reconstruction Plan is not approved and the Reconstruction terminates, creditors which have not otherwise entered into direct agreements with the Group may take steps to

recover their debts, claim damages, liquidated damages and/or commence insolvency proceedings (it being a condition precedent to the Restructuring that no insolvency proceedings have been

commenced against any member of the Group).

In particular, the Company has entered finance lease of up to currently USD35 million with Caterpillar Finance, under which the Company has drawn down and under which the Company is in

default. Caterpillar Finance has indicated that, should the Reconstruction and the Restructuring not proceed as planned, Caterpillar will withdraw its facility and the equipment leased thereunder. In

such an event, the Company will experience disruption to its operations and will be required to source alternative equipment, which may have a material adverse effect on the Groups production,

business, results of operation and financial condition.

Additionally, the waterfall arrangement in the Restructuring which creates a priority arrangement as between the First Lien Bonds, the Second Lien Bonds and the trade debt, will not bind trade

creditors who have not agreed its terms. In the event that the new security package under the First Lien Bonds and Second Lien Bonds is avoided during the relevant hardening period (see “The

security package under the Bond Offering may be subject to clawback risks” below for further discussion) those bondholders will rank equally with the unsecured creditors that are not bound by the

terms of the Reconstruction Plan.

Drawdown on Bond during Reconstruction

Disbursement of proceeds from the issue of the First Lien Bonds will be made prior to the court’s approval of the composition. While this risk may be deemed as minor, as all creditors with claims

above SEK 2.6m have provided written consents or pre-approvals to the proposed composition, a risk remains that no composition would occur subsequent to the disbursement. Failure to obtain the

composition would have a material adverse effect on the financial condition of the Issuer and its ability to fulfil its obligations towards the bondholders.

48


Risk Factors (cont’d)

Risks related to the proposed Restructuring (cont’d)

The Restructuring will not bind all creditors of the Group, and such creditors will still have claims against the Group

The Group’s principal creditors include the Existing Bondholders and trade creditors, in particular Peab and Metso. The Existing Bondholders and Peab and Metso have, in so far as applicable to

them, agreed to the terms of the Restructuring. The majority of the Group’s other trade creditors will, if and once implemented, be bound by the Reconstruction Plan.

The Reconstruction Plan, however, only relates to claims of unsecured creditors of the Northland Operating Group and only those unsecured creditors of the Northland Operating Group as at 8 and

12 February 2013. Unsecured creditors of other Group companies or subsequent claims will not be affected by the Reconstruction, and such creditors may take action or otherwise bring claims or

commence proceedings against the Group. As at the date of this presentation, such creditors comprise in aggregate less than 5 per cent of the total debts of the Group. The Company, having been

in discussions with a number of such creditors, (i) has received confirmations from all of the creditors of the Norwegian Group Companies that they will support the Restructuring and (ii) is not aware

of claims or proceedings or any threats of claims or proceedings against the Group. Further, no assurance can be made that also creditors having confirmed that they will support the Restructuring

may take action or otherwise bring claims or commence proceedings against the Group.

Whilst the Company believes that, assuming implementation of the Restructuring, it will have sufficient funds to meet the claims of any such creditors, there is no guarantee that it will be able to do

so, and any claims made by or insolvency proceedings commenced by any such creditors may have an adverse impact on the Restructuring and the business and operations of the Group.

The Restructuring has been based on certain assumptions, which may prove to be incorrect

The Restructuring has been modelled in accordance with a financial model prepared by the Company, which contemplates that the Company will be able to meet its payment obligations under the

Restructuring, but is subject to a number of key assumptions, including as to foreign exchange and commodity prices. See the risks identified in “Any decline in the commodity prices for the Group’s

products will adversely affect the Group’s financial condition” and “The Group is subject to currency risk” below for further detail as to the risks associated with commodity prices and foreign

exchange.

Whilst the Company believes it has prepared the financial model after due diligence and careful consideration, the assumptions upon which the financial model is based may prove to be incorrect or

may otherwise be effected by subsequent unforeseen events. Should any such assumptions prove to be incorrect, then this may impact on the Group’s funding, liquidity and financial position. In

such circumstances the Group may be required to seek additional funding (which may not be available, or only be available on unfavourable terms), reduce operating costs and/or capital

expenditure, scale back its operations or, ultimately, cease trading and commence insolvency proceedings.

Restrictive covenants under the terms of debt facilities

The Group has pledged substantially all of its assets related to the Kaunisvaara project as security for its obligations under the existing bond agreements and certain other debt facilities, and such

security will be extended to the First Lien Bonds. The terms of such agreements, among other things, restrict the ability of certain members of the Group to (i) incur or guarantee additional

indebtedness, subject to certain exceptions; (ii) make certain restricted payments, including dividends or other distributions; (iii) make certain investments; and (iv) provide financial assistance to third

parties. While the covenants in the abovementioned agreements do not presently prevent the Group from conducting its business in the normal course or meeting the Group’s debt servicing

obligations, the need to observe these covenants nevertheless hinder the Group’s ability to incur additional debt and restrict its business. In addition, if the Group does not generate sufficient cash

flows from its operations in order to meet the debt service obligations or there are other events of default under the said agreements, the Group may have to refinance or restructure its debt or

reduce or delay its capital expenditures which may materially adversely affect the Group’s business and prospects. The Group’s ability to refinance or restructure its debt and to do so on

commercially reasonable terms depends on the level and stability of the cash flows as well as many factors beyond its control, including the condition of the financial markets and global economy and

there can be no assurance that the Group will be able to do so on acceptable terms, in a timely manner or at all. In addition, if an event of default occurs under the said agreements, the respective

creditors or their respective representatives or security agents, if such has been duly authorised and appointed, could, in certain circumstances, foreclose on the assets pledged to the bondholders.

Any of the foregoing could have a material adverse effect on the Group’s business, results of operations and financial condition.

49


Risk Factors (cont’d)

Risks related to the proposed Restructuring (cont’d)

The security package under the Bond Offering may be subject to clawback risks

The First Lien Bonds will be secured by a security package that is substantially identical to the existing security package that secures the Second Lien Bonds. To the extent it is identical with the

existing security package the existing security package will be amended to grant a first ranking security to the First Lien Bonds and a second ranking security to the Second Lien Bonds. The security

is granted by a Luxemburg company and by Swedish and Norwegian companies and primarily governed by Swedish and Norwegian law with a minor part governed by Finnish law. Clawback is

governed by the law of the domicile of the pledgor and assignor. Both Swedish, Norwegian and Luxembourg law provide for the avoidance of the grant or enforcement of new security in certain

circumstances, in the event that the Company (or its parent) proceeds into insolvency proceedings within 3 months (or, in respect of its parent, 6 months and 10 days) of the grant (and in the case of

its parent, the enforcement) of the grant of such security. Whilst there is always a risk therefore that security may be avoided during such hardening period, the risk is reduced by the fact that the

security was granted in connection with the issue of the earlier bonds (now forming part of the Second Lien Bonds), and that any current changes to the security arrangement is made in connection

with the grant of new money. The short duration of the hardening period is also a mitigating factor. There is an exception which applies to certain operational accounts held in Sweden, where the

security is not perfected absent certain events occurring which include insolvency, which perfection would almost certainly fall within the hardening period. In the event that the security (or any part of

it) would be avoided, the First Lien Bonds and the Second Lien Bonds would be unsecured (with respect to such part of the security as was avoided). Whilst there is a waterfall as between

themselves, they would rank pro-rata with other unsecured creditors who have not agreed to be (or are not otherwise) bound by any waterfall or priority arrangements.

The shareholders may not approve the bond offering

Certain shareholder approvals are required to implement the convertible element of the Second Lien Bonds, which approvals are inter-conditional upon each other. The first steps in the

Restructuring, including other amendments to the terms of the Second Lien Bonds and the subscription for First Lien Bonds, and is not conditional upon such shareholder approvals and will occur

prior to obtaining such approvals. A shareholder meeting has been convened for 4th June 2013 to pass the necessary shareholder resolutions. Should the requisite quorum for the meeting not be

achieved (which is shareholders representing at least 50 per cent. of the share capital of the Company), an adjourned extraordinary general meeting will be called for on or about 8th July 2013. If

shareholder approval is not obtained, then the bond trustee will be instructed to enforce share pledges over the entire share capital of Northland Sweden AB, which will result in the transfer of such

shares (and, consequentially, the subsidiaries of Northland Sweden AB, which own the Kaunisvaara project) to a purchaser offering the highest purchase price for the pledged assets. The

bondholders intend to establish a new holding company in order to acquire Northland Sweden AB, subject to all the debt owed by it and its subsidiaries. Such new holding company will be expected

to be the highest bidder in such enforcement process.

As a result, the Kaunisvaara project will be transferred to a new holding company established by the bondholders, unless there is another potential bidder offering a higher purchase price, and the

remaining assets of the Company (and its other subsidiaries) will comprise mostly of non-producing exploration assets, following which such companies are likely to be wound up. The failure to

obtain such shareholder approvals will therefore result in an enforcement of security.

In addition, there is a risk the shareholders will vote against the election of the proposed board at the upcoming annual shareholders meeting of the Company, which could leave the Company

without a serving board until an extraordinary shareholders meeting is held.

50


Risk Factors (cont’d)

Litigation and insolvency risks

Litigation and Insolvency Risk

Litigation, regulatory or other proceedings may be commenced against the Company

As a consequence of the Reconstruction and Group’s severe financial difficulties, funding shortfall and liquidity problems described in this presentation, the Group is in default and breach of existing

financing arrangements, including the Second Lien Bonds, and is in breach of various undertakings and obligations, including payment obligations, owed to trade and other creditors of the Group.

Whilst the Restructuring will, if implemented, significantly improve the financial, funding and liquidity position of the Group, it will not bind all the creditors of the Group and will not bind the Company’s

shareholders. Whilst the Company is not aware of any such claims being made or threatened, any failure to implement or any delay in implementing the Restructuring may result in creditors taking

action or otherwise commencing enforcement proceedings against the Group, including insolvency proceedings. Similarly, other creditors of the Group that are not subject to or otherwise bound by

the Restructuring may take action or commence proceedings against the Company. See “The Restructuring will not bind all creditors of the Group, and such creditors will still have claims against the

Group, including for past payment defaults” above for further details.

Since the announcement by the Company on 24 January 2013 of its funding shortfall, the share price of the Company’s shares has fallen by 90.5 per cent. (from NOK 6.01 to NOK 0.57). Whilst the

Company has received legal advice from its external legal counsel that it has at all relevant times complied with its disclosure and other legal obligations, including as a company listed on the Oslo

Børs and Toronto Stock Exchange, and the Company is not aware of any such claims being made or threatened, shareholders of the Company may take action or bring proceedings against the

Company to recover losses suffered by them as a consequence of the fall in the Company’s share price.

The Oslo Børs is currently investigating the timing of the Company’s announcement of its funding shortfall and whether the Company complied with its obligations as a company listed on the Oslo

Børs to, subject to certain exemptions, immediately notify to the market any price sensitive information in its possession. The investigations of the Oslo Børs may also comprise other matters which

the Company is not aware of. Should the Oslo Børs or other relevant authorities conclude that the Company did not comply with its obligations as a listed company, the Company may be imposed

with a fine. In addition to the risk of being imposed with a fine, which may or may not be significant, should any authorities conclude that the Company did not comply with its obligations as a listed

company, this may result in shareholders of the Company or other persons commencing proceedings against the Company. It is also possible that Canadian shareholders of the Company may bring

similar claims, and that such claims may be in the form of shareholder class actions.

Any litigation, regulatory or other proceedings could result in fines, damages or other penalties. Whether or not successful, they could result in substantial costs and diversion of management and

other resources and reputational harm. Any of which could have a material adverse effect on the Group’s business, operating results, financial condition and prospects.

The Group faces a short term liquidity squeeze and the risk of insolvency

Whilst the Restructuring, if implemented, will significantly improve the liquidity and funding position of the Group, the Group is currently subject to a significant and serious liquidity squeeze, and does

not have available cash to meet its short term liabilities. As at the date of this presentation, the Existing Bondholders have approved the release of up to USD 30 million of the remaining amount

standing to the credit of the debt service accounts, and, assuming receipt of such funds, the Company believes that the Group will have sufficient cash to be able to fund its obligations until the end

of May 2013. In addition, in order to address its current funding shortfall, the Group has taken care to reduce its expenditures and is closely monitoring its outgoing and costs.

Failure to receive the proceeds of the First Lien Bonds in accordance with the timetable and any failure to implement or any delay in the implementation of the Restructuring, or any additional

unforeseen costs or expenses or other events in the intervening period, will likely result in the Group being unable to meet its debts as they fall due. Also, even if the Restructuring does complete, or

the Group obtains alternative financing, there is no guarantee that the Group would not face a similar situation in the future.

In the event of insolvency, liquidation or a similar event relating to one of the members of the Group, all creditors of such member would be entitled to payment in full out of the assets of such

member before the shareholders would be entitled to any payments. The amount available to meet claims of creditors, including bondholders, may also be insufficient to meet the demands of all

creditors. The proceeds which could be raised from a sale of the Group's assets or business in an insolvency situation may be considerably less than the current value of such assets and business.

Defaults by, or the insolvency of, certain subsidiaries could result in the obligation of other members of the Group to make payments under parent company financial or performance guarantees in

respect of such obligations or the occurrence of cross defaults on certain borrowings of the Group. There can be no assurance that the Group’s assets would be protected from any actions by its

creditors, whether under bankruptcy law, by contract or otherwise. In addition, a large number of the commercial contracts entered into by the Group include provisions entitling the counterparties to

terminate or renegotiate upon the insolvency, liquidation, bankruptcy or similar event of the other party.

51


Risk Factors (cont’d)

Other risks related to the Group

Other risks

The Group may experience further significant cost overruns

The Group has in the past experienced significant cost overruns and higher than expected capital and operating expenditures on its Kaunisvaara project compared to its expectations and budgets, in

particular its open book costs in respect of the process systems installations on line 1. The cost of the civil works for both Kaunisvaara and Narvik was significantly greater than budgeted and the

original contract value. These deviations were principally due to lack of basic and detailed engineering at the time of signing the contracts (and thus at the time the budget was fixed) combined with

unanticipated increases in quantities compared to the estimates in the DFS phase. The construction of the Pitkijärvi re-loading terminal was budgeted to be built on a brown field site taking

advantage of existing infrastructure. However during the course of the project the location of the site had to be changed which resulted in a cost increase compared to the original DFS estimate of

circa 60 per cent.

In order to try to limit the risk of future cost overruns, the Group has renegotiated agreements with Peab and Metso to convert all its contracted capital expenditure from 1 January 2013 to 31

December 2014 from an open book basis to fixed costs (representing approximately 75 per cent. of all contracted capital expenditure). The agreements with Peab and Metso are conditional upon the

Reconstruction Plan being accepted and the Group securing the long term financing. This is expected to significantly reduce the risk of cost overruns during this period. There is still some risk of

scope increases, even though the contacts have now been fixed, as detailed engineering is still on-going and other change requests may be required by the Company or by external parties, such as

the authorities. However, the remainder (estimated at 25%) of the Group’s capital expenditure from 1 January 2013 to 31 December 2014 remains on an open book basis.

The Group’s estimations of target costs under the contracts related to construction and commissioning are based on estimates relevant to the information and level of design and engineering studies,

the accuracy of which cannot be assured due to the inherent uncertainty of future projections. Accordingly, the target cost estimates on which the Group is relying may still vary as construction and

implementation progresses. There is, therefore, no guarantee that the Company will not experience similar cost overruns in the future in respect of any capital expenditure which remains on an open

book basis.

If the Group experiences cost overruns, the funds available to the Group may not be sufficient and further financing may be required. There is a risk that such alternative financing may not be

available or sufficient or may only be available on unfavourable terms. Any such cost overruns and any failure to obtain any further required funding may adversely affect the Group’s business,

results of operations and financial condition or prospects and the Group’s ability to make payments could be impaired.

The Group may be unable to agree to the terms of or lose certain sources of funding

The sources of financing described in this presentation include a number of leases for the acquisition and financing of material items of equipment. The Group has or will be required to maintain or

enter into such leases in order to be able to successfully fund and operate the Kaunisvaara project following completion of the Restructuring. A failure or delay in entering into, materially different

terms to those currently envisaged, or a failure to maintain such leases may have a material adverse effect on the financial position of the Group. In particular, it may have a material adverse effect

upon the Group’s ability to complete the Kaunisvaara project and the Group will have to seek other debt and equity financing options, which may not be available at that time or only available on

unfavourable terms.

Lower than anticipated future cash flows from the Group’s operations may adversely impact the Group’s ability to fund completion of the Kaunisvaara project

The Group’s funding plan envisages certain levels of cash flows from the Group’s production. There is a risk that the amount of such cash flows generated from Tapuli’s production (together with

other funds available for the financing of the Kaunisvaara project, if any) may not be sufficient to fund the full completion of the Kaunisvaara project. As a result the Group may be required to cease,

slow or delay certain or all further construction works until it becomes able to raise additional funds or increase operating cash flows. Any such cessation or delay could, among other things, result in

third parties exercising their rights of termination under certain material agreements and/or the Group being required to pay liquidated damages or other amounts to third parties under such

agreements or obtain further financing. The amount of operating cash flow required for the duration of the Kaunisvaara project depends upon a number of factors, many of which are entirely outside

the Group’s control. Such factors include, but are not limited to, the prevailing iron ore price, currency fluctuations, the quality of the produced iron ore concentrate and the ability to deliver iron ore

concentrate to its customers in a timely manner and the level of operating and on-going capital expenditures incurred by the Group. Accordingly, there can be no assurance that the operating cash

flows derived from the Kaunisvaara project will be equal to or greater than the amounts assumed in the Group’s funding plan. In the event of a shortfall in actual or anticipated operating cash flows,

there can be no assurance that the Group will be able to obtain or raise the additional funds necessary for continued operation and development of the Kaunisvaara project.

52


Risk Factors (cont’d)

Other risks related to the Group (cont’d)

Any decline in the commodity prices for the Group’s products will adversely affect the Group’s financial condition

The Group operates in a highly volatile commodity market and commodity prices for the Group’s products may as such decline. The factors giving rise to this volatility are generally out of the Group’s

control, being largely driven by external global economic factors. The market price for iron ore, and other metals is volatile and cannot be controlled. There is no assurance that, if commercial

quantities of iron ore, and other metals are discovered, a profitable market may continue to exist for a production decision to be made or for the ultimate sale of the metals. Unfavourable levels of

commodity prices may have a material and adverse effect on the Group’s business, results of operations and financial condition or prospect. The prices to be achieved and pricing mechanism to be

applied under each off-take contracts may change over time due to changes of world market prices and the way reference prices are established. Factors that tend to put downward pressure on the

price of iron ore include (i) a reduction in the demand for steel in China; (ii) exchange rates, inflation rates, forward sales of iron ore and steel by producers and speculators as well as other geopolitical,

social or economic conditions; (iii) increased production and the development of new sources of iron ore supply; and (iv) consolidation in the steel industry, leading to a weaker position for

iron ore suppliers in price negotiations. Any significant or sustained reduction in iron ore prices generally, or in the reference prices for iron ore concentrates used in the Group’s off-take contracts,

could require the Group to restate or reduce its estimated mineral reserves and would, in any event, materially and adversely affect the Group’s business, results of operations, financial condition or

prospects.

The Group is subject to currency risk

The Group’s balance sheet, earnings and cash flow are, and, particularly once full production commences at the Kaunisvaara project, will be, influenced by movements in the exchange rates of the

USD, SEK and NOK. Revenue from sales and the majority of financing for the Kaunisvaara project will be denominated in USD, but, a significant portion of the capital expenditures of construction

and operating costs for the Kaunisvaara project will be incurred in SEK. One of the reasons for the currently budgeted operating cash flows being lower than previously budgeted, which contributed

to the funding shortfall described herein, was adverse movements in the USD: SEK exchange rate. The Group has obtained significant financing denominated in NOK and USD, which further expose

the Group to currency risk. Accordingly, appreciation of the SEK against the USD has in the past and could in the future materially adversely affect the Group’s business, results of operations,

financial condition or prospects. The Group monitors all currency exposure, but has currently no hedge positions.

Risk related to off-take contracts and future sale of iron ore concentrate

The Group is dependent on future sales of iron ore concentrate. Although the Group has entered into off-take contracts for the sale of up to 100 per cent of the iron ore produced from the

Kaunisvaara project for the expected production the first seven years of operation there is no assurance that the Group will be able to produce and deliver the agreed quantities, qualities or meet any

other terms, or that such off-take parties will be willing or able to purchase or take delivery of the same on satisfactory terms. The Group may in the future enter into further such off-take agreements

for the Kaunisvaara project or other projects. No assurance can be made that the Group is able to maintain such existing or new off-take agreements, nor replace or obtain such agreements on

satisfactory terms.

The price currently being agreed with the off-take parties under the off-take contracts is different from that which is specified in the off-take contracts. This is because at the time of entry into such

contracts, the pricing of iron ore concentrate was changing from fixed annual prices to prices referenced to market spot prices, and it was not clear at that time of negotiation of the contracts how

pricing would evolve. The Company expects to enter into new agreements or amend the existing agreements to reflect its current pricing methodology. Current pricing is agreed with the off-take

parties by reference to reference prices with grade, freight and value in use adjustments. However, there is no guarantee of the amount of the iron content premium or of the value in use in respect

thereof. In addition, the reference prices used under the off-take contracts are comparatively new, and have been used in the iron ore market only for a period of approximately two to three years. A

failure to amend the off-take contracts in a way satisfactory to the Company, lower than expected grade premiums and value in uses, or unexpected changes in the reference prices and currency

fluctuations, taken together or individually, could materially and adversely affect the Group’s business, results of operations and financial condition or prospects.

Renegotiation and termination of material project agreements

The Group is dependant on a number of material project agreements, some of which are described herein. In the event that certain of the risks described herein would materialize, such as

insolvency, bankruptcy, cross-default, cessation or delay, counterparties to such agreements could, among other things, exercise their rights of renegotiation, termination and/or right to payment

liquidated damages or other amounts. At present, the Group has failed to fulfil its obligations under certain of its material project agreements; however the Reconstruction which the Group is currently

undergoing prevents any immediate enforcement actions while the Reconstruction is continuing. Furthermore, the Group has attempted, and in many cases succeeded, to mitigate this risk by

receiving renewed commitments from its contractual counterparties. However, when the Company is no longer in reconstruction, some or all of the counterparties to the agreements of which the

Group is in breach may nevertheless decide to exercise their contractual rights, which may include seeking damages, liquidated damages or termination of the applicable contract.

53


Risk Factors (cont’d)

Other risks related to the Group (cont’d)

Iron ore processing risk

The Group is operating an iron ore processing plant on the Kaunisvaara project site. Although the Group has successfully commissioned the necessary parts of the plant and commenced ramp up of

production of iron ore at the expected rates and expected qualities, the Group may still experience practical or technical problems in the further commissioning or further construction of remaining

planned parts of the plant or in the application of its processing technology to the iron ore. Any prolonged outage or shutdowns at the plant due to technical problems or otherwise could substantially

increase production costs. The Group’s inability to efficiently process iron ore into iron ore concentrate in a cost effective manner and in the grades that it currently anticipates and as required under

its off-take contracts could materially adversely affect the saleability of the product and the Group may not be able to realize the anticipated premiums or may even be required to apply discounts to

its prices, which could materially and adversely affect its business, results of operations, contractual obligations under various supply contracts and its financial condition or prospects.

Construction costs and delays of the Kaunisvaara project

The mines, the processing plant and their related infrastructure and logistics have not yet been completely constructed and are in the commissioning phase. The Group is highly dependent on its and

its contractors ability to develop, construct, commission and operate the Kaunisvaara project within the planned timeframe and in accordance with the capital cost estimated by the Group. Any delay

in the construction or commencement of production or increase in estimated costs could materially and adversely affect the Group’s business, results of operations, financial condition or prospects.

Risks in the transportation and logistics solution

The commercial viability of the Kaunisvaara project depends to a large extent on an integrated and fully functioning transportation and logistic solution from Kaunisvaara to the port of Narvik: the iron

or concentrate is to be transported by truck using public roads from the processing plant at the Kaunisvaara site to a railhead in Pitkäjärvi and then by rail from Pitkäjärvi to the port of Narvik. Due to

the fact that completion of the shiploader and facilities in the port of Narvik are scheduled to be completed by end of Q3 2013, the Group will during the earlier ramp-up and until such time the

shiploader facilities in the port are completed be using a temporary solution in the port of Narvik for the unloading, loading and storage of iron ore concentrate. Furthermore, the port at Narvik will be

operated under a lease until 2021 (with a possible extension under certain conditions for another five years). Any delay to the implementation of the permanent solution will increase costs and

thereby have a negative impact on the Company's operating profit and cash flow and the Company's liquidity position. In addition, any failure by the Company to extend the lease at Narvik in 2021 or

to find an alternative permanent port solution in Narvik may have a material adverse effect on the Company's ability to ship iron ore concentrate and the cost of doing so.

Although the road and rail infrastructure currently exists, such infrastructure will need to be upgraded and/or expanded in certain respects to accommodate increased use by the Group and other

parties. The Group has obtained the rights to land, and has constructed facilities in Pitkäjärvi that will enable the Group to transfer iron ore concentrate from trucks onto rail cars. The Group will use

standardised rail cars until the constructions in the port of Narvik have been finalised, and thereafter the Group expect to use rail cars which are designed specifically for the Group’s use. In addition,

pursuant to certain construction contracts regarding the construction of the shipment facility at the port of Narvik, Northland Logistics AS has agreed to be responsible for 75% of the costs related to

certain defects. Any defects, delays or inability to move the logistic operations into the anticipated permanent solutions may be detrimental to the Group’s ability to efficiently and cost effectively run

the logistics, which may materially and adversely affect the Group’s business, results of operations, financial condition or prospects.

The railway that the Group intends to use to transport its iron ore concentrates is a public railway, access to which is regulated by the Swedish Transport Administration in Sweden and the Norwegian

National Rail Administration (Nw. Jernbaneverket) in Norway. The Group has been granted four train slots for 2013, matching its application. For future years, if demand were to exceed supply, it is

possible that the Kaunisvaara project may not be given sufficient train slots to transport its iron ore concentrate, with the result that it may be forced to temporarily find alternative routes for

transportation or reduce production and/or deliveries of iron ore concentrates.

As the combination of road, rail and port facilities on which the Kaunisvaara project will rely has never been previously used in the manner proposed and the detailed arrangements for access to such

road and rail facilities have not been finalized with the relevant owners/operators, it is possible that additional work of which the Group is not currently aware may be required and/or that the costs of

maintaining such facilities may be greater than it is currently contemplating. Any failure to implement or maintain the intended logistics solution could adversely affect the Group’s revenues and could

result in the termination of off-take contracts and/or claims by customers for breach thereof. While the Group might, in such a case, be able to sell its iron ore concentrates to alternative third parties,

there can be no guarantee that it would be able to do so or the price at which it would be able to do so. In addition, the Group could be required to incur unexpected capital or operating costs to

rectify such failures.

54


Risk Factors (cont’d)

Other risks related to the Group (cont’d)

Insurance and uninsured risk

The Group’s business is subject to a number of risks and hazards generally, including adverse environmental conditions, industrial accidents, labour disputes, unusual or unexpected geological

conditions, ground failures, drill hole cave-ins, changes in the regulatory environment and natural phenomena such as inclement weather conditions, floods, snow falls and avalanches. Such

occurrences could result in damage to exploration equipment, personal injury or death, environmental damage to the Group’s properties or the properties of others, delays in exploration and

production activities, monetary losses and possible legal liability. Although the Group maintains insurance policies to protect against certain risks in such amounts as it considers reasonable, its

insurance will not cover all the potential risks associated with the Group’s business and operations and may not be adequate to cover any particular liability. It is not always possible to obtain

insurance against all such risks and the Group may decide not to insure against certain risks because of high premiums associated with insuring against those risks or for other reasons. Furthermore,

insurance coverage may not continue to be available at economically feasible premiums, or at all. Losses arising from events that are not insured or are not adequately insured may cause the Group

to incur significant costs that could have a material adverse effect upon its financial performance and results of operations.

Legal and regulatory risk

Exploration, development, mining and construction operations in Sweden, Norway and Finland are subject to a variety of general and industry-specific laws, regulations and permits concerning the

environment, the health and safety of employees, land access, infrastructure creation and access, royalties, taxation, accounting policies and other matters. In addition, certain types of operations

require the use of certain mining and construction methods and equipment, submission of impact statements and approval thereof by government authorities. Compliance with such existing laws,

regulations and permits may cause delays or require capital outlays in excess of those anticipated, which, in turn, could have a material adverse effect on the Group’s operations. Environmental

legislation is evolving in a manner which may result in stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed

projects and a heightened degree of responsibility for companies and their officers, directors and employees. There is no assurance that future changes in laws, regulations or permitting will not

adversely affect the Group’s activities.

Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions, including orders issued by regulatory or judicial authorities, pursuant to which the

Group may be required to cease or curtail its operations or take corrective measures requiring capital expenditures, installation of additional equipment, or remedial actions. Parties, such as the

Group, engaged in mining operations or in the exploration or development of mineral properties may be required to compensate those suffering loss or damage by reason of their operations and

exploration and development activities and may be subjected to civil or criminal fines or penalties imposed for violations of applicable laws or regulations. Amendments to current laws, regulations

and permits governing operations and activities of mining and exploration companies, or more stringent implementation thereof, could have a material adverse impact on the Group and cause

increases in operation and exploration expenses or require abandonment of or delays in the exploration and development of new mining properties.

In addition, the Group has obtained and may in the future require permits, dispensations and authorizations in relation to certain aspects of operations. If the Group is unable to obtain these permits

and authorizations, or if they are revoked or not renewed once issued, or if they are made subject to more stringent requirement, its ability to operation may be materially impaired.

Dependence on key personnel

The success of the Group is dependent on its senior management and other key personnel. The experience of these individuals will be a factor contributing to the Group’s continued development

and growth. The loss of one or more of these individuals could have a material adverse effect on the Group’s business prospects.

Permits

Although the Group has or will receive title opinions in relation to its concessions, exploration permits, environmental licenses and other property that has been considered as material to the Group,

there is no guarantee that title to such assets will not be challenged or impugned. The Group’s concessions, permits and licenses may be subject to prior unregistered agreements, transfers, leases

or native land claims and title may be affected by such unidentified or unknown claims or defects. Furthermore, any concession, permit or license may be withdrawn or the terms and conditions

therefor be changed by the relevant authority in case the Group does not comply with its obligations under applicable laws or such specific concession, permit or license or if there otherwise are

compelling reasons, e.g. effects of the operations that could not have been foreseen at the time of authorization of such concessions, permits and licenses. There can be no assurance that the

Group will be able to maintain or obtain all necessary licenses and permits that may be required to carry out exploration, development and mining operations at its projects.

A comprehensive application for an environmental permit covering the Tapuli mine with the necessary processing and the planned activities in the Sahavaara mine was filed in June 2011. The

Sahavaara environmental permit also, when and if granted, provides for a right to process the ore from the Sahavaara pit with increased sulphide levels. Unless and until the Group obtains such

environmental permit, it will not be able to commence the development of the Sahavaara mine. Management believes that the Sahavaara environmental permit will be granted during by the second

half of 2013, but no assurance can be given that granting of the permit will not be delayed or granted at all.

55


Risk Factors (cont’d)

Other risks related to the Group (cont’d)

Health and safety hazards

The Group cannot guarantee that none of its employees will ever be injured or become ill from any occupational disease related to the workplace, or that such injuries or diseases may not have any

implications on the Group.

Estimation of ore/mineral reserves, mineral resources and metallurgical sampling and studies

The figures for ore/mineral reserves and mineral resources contained herein, or otherwise disclosed by the Group, are estimates only and no assurance can be given that the anticipated tonnages

and grades will be achieved, that the indicated level of recovery will be realized or that ore/mineral reserves can be mined or processed profitably, if at all. There are numerous uncertainties inherent

in estimating ore/mineral reserves and mineral resources, including many factors beyond the Group’s control. Such estimation is a subjective process, and the accuracy of any reserve or mineral

resource estimate is a function of the quantity and quality of available data (and samples taken may not be representative of the general orebody) and of the assumptions made and judgments used

in engineering and geological interpretation. Short-term operating factors relating to the ore/mineral reserves, such as the need for orderly development of the ore bodies or the processing of new or

different ore grades, may cause any ore body to be unprofitable in any particular accounting period. In addition, there can be no assurance that recoveries derived from small scale laboratory tests

will be duplicated in larger scale tests under on-site conditions or during production. Fluctuation in commodity prices, results of drilling, metallurgical testing and production and the evaluation of mine

plans subsequent to the date of any estimate of ore/mineral reserves or mineral resources may require revision of such estimates. The actual volume, grade and chemical composition of reserves

mined and processed and recovery rates and may not be the same as currently anticipated. Any material reductions in estimates of ore/mineral reserves and mineral resources, or of the Group’s

ability to extract these ore/mineral reserves, could have a material adverse effect on the Group’s results of operations and financial condition. The Group has not disclosed updated figures for

ore/mineral reserves and mineral resources since 1 June 2011. No assurance can be made that the aforementioned report, therefore, provides an accurate or complete description of the Group’s

ore/mineral reserves and mineral resources.

Measured, indicated and inferred mineral resources

There is risk that measured, indicated and inferred mineral resources cannot be converted into mineral reserves as the ability to assess geological continuity is not sufficient to demonstrate economic

viability. Due to the uncertainty of measured, indicated and inferred mineral resources, there is no assurance that inferred mineral resources will be upgraded to proven and probable mineral reserves

as a result of continued exploration. The disclosure herein of a scientific or technical nature of the Group’s material properties, including disclosure of mineral reserves and resources, is based on

technical reports prepared for those properties in accordance with NI 43-101 and other information that has been prepared by or under the supervision of “qualified persons” (as such term is defined

in NI 43-101) and included herein with the consent of such persons. Actual recoveries of mineral products may differ from reported mineral reserves and resources due to inherent uncertainties in

acceptable estimating techniques. In particular, “indicated” and “inferred” mineral resources have a great amount of uncertainty as to their existence, economic and legal feasibility. It cannot be

assumed that all or any part of an “indicated” or “inferred” mineral resource will ever be upgraded to a higher category of resource. Mineral resources that are not mineral reserves do not have

demonstrated economic viability. It can not be assumed that all or any part of the mineral deposits in these categories will ever be converted into proven and probable reserves, or that any proven or

probable reserves will lead to economically viable production or production at all.

Additional ore/mineral reserves

Because mines have limited lives based on proven and probable ore/mineral reserves, the Group must continually replace and expand its ore/mineral reserves in order for a mine to continue

production. The life-of-mine estimates for the Group’s anticipated operations may not be correct, and ultimately, the Group’s ability to maintain or increase its anticipated annual production will be

dependent on its ability to bring new mines into production and/or to expand ore/mineral reserves at its then existing mines.

Title to assets and titles

The Group’s title to its properties may be subject to disputes or other claims. Although the Group has exercised reasonable due diligence with respect to determining title to properties in which it has

a material interest, there is no guarantee that title to such properties will not be challenged or impugned. In particular, the Group’s title may be subject to prior unregistered or native land claims by the

indigenous Sami people, and its title may be adversely affected by unidentified or unknown defects. Although the Group does not have knowledge of any valid challenges to the title of the Group’s

properties, no assurance can be given that no such challenges may exist, which, if successful, could impair the Group’s ability to explore, develop and/or operate its properties or to enforce its rights

with respect to its properties, which in turn could have a material adverse effect on the Group’s business, financial condition or results of operations.

Risks in the results from current definitive feasibility studies

According to normal practice in the industry, the Group is performing definitive feasibility studies (“DFS”) for its projects. Currently the Group is preparing DFS Final reports and updated NI 43-101

Mineral Resource statements on its Hannukainen project as well as on its Pellivuoma deposit, which are planned to be published as soon as possible after the long term financing has been secured.

There is no assurance that the Group’s activities and assessments in connection with the DFS will verify the preliminary results of the Group's feasibility studies communicated previously to the

market.

56


Risk Factors (cont’d)

Risks relating to the Bonds

Risks relating to bonds

Volatile price of the bonds

The market price of the First Lien Bonds (from this point also referred to as the Bonds) could be subject to significant fluctuations in response to actual or anticipated variations in the Group’s

operating results and those of its competitors, adverse business developments, changes to the regulatory environment in which the Group operates, changes in financial estimates by securities

analysts and the actual or expected sale of a large number of bonds, as well as other factors. In addition, in recent years the global financial markets have experienced significant price and volume

fluctuations, which, if repeated in the future, could adversely affect the market price of the Bonds without regard to the Group’s operating results, financial conditions or prospects.

Illiquidity of the Bonds

it is expected that a listing will be sought for the First lien Bonds on Oslo Børs. This, however, should not be taken as an assurance that there will always be a liquid market for the Bonds. There is

currently no market through which the Bonds may be sold in Canada or the U.S. There can be no assurance that a secondary market for the Bonds will provide the bondholders with liquidity or that

any such liquidity will continue for the life of the Bonds. Consequently, any purchaser of the Bonds must be prepared to hold such Bonds for an indefinite period of time or until final redemption or

maturity of the Bonds. The liquidity and market value at any time of the bonds is affected by, among other things, the market view of the credit risk of such bonds and will generally fluctuate with

general interest rate fluctuations, general economic conditions, the condition of certain financial markets, international political events, the performance and financial condition of the Group,

developments and trends in the mining industry generally.

Restrictions on the transferability of the Bonds

The Bonds have not been and will not be registered under the U.S. Securities Act of 1933 (the U.S. Securities Act), or any U.S. state securities laws. Therefore, a holder of the Bonds may not offer

or sell the Bonds in the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws,

or pursuant to an effective registration statement. No member of the Group has undertaken to register the Bonds under the U.S. Securities Act or any U.S. state securities laws or to effect any

exchange offer for the Bonds in the future. Furthermore, no member of the Group has registered the Bonds under any other country’s securities laws. It is the bondholder’s obligation to ensure that

your offers and sales of Bonds within the United States and other countries comply with all applicable securities laws.

Inability to fulfill guarantee undertakings

The ability of the issuer of the Bonds (Bond Issuer) and those other companies in the Group which will be guarantors under the agreements governing the Bonds to fulfil their respective guarantee

undertakings under the said agreement is dependent upon their respective financial position and operations.

Defaults and insolvency of subsidiaries

In the event of insolvency, liquidation or a similar event relating to one of the Bond Issuer’s subsidiaries, all creditors of such subsidiary would be entitled to payment in full out of the assets of such

subsidiary before the Bond Issuer, as a shareholder, would be entitled to any payments. Defaults by, or the insolvency of, certain subsidiaries of the Bond Issuer could result in the obligation of the

Bond Issuer to make payments under parent company financial or performance guarantees in respect of such subsidiaries’ obligations or the occurrence of cross defaults on certain borrowings of the

Bond Issuer and other members of the Group. There can be no assurance that the Bond Issuer and its assets would be protected from any actions by the creditors of any subsidiary of the Bond

Issuer, whether under bankruptcy law, by contract or otherwise.

Security not granted directly to the bondholders

The security interests in the Bonds that secures the Bond Issuer’s obligations under the Bonds, neither is or will be granted directly to the bondholders, but will be granted only in favour of the

security agent for the benefit of the secured creditors. The bond agreements and the intercreditor agreement among the Group’s creditors provide and will provide that only the security agent will

have the right to enforce the security interests in the security. As a consequence, bondholders neither have or will have direct security interests and neither have been or will be entitled to take

enforcement action in respect of the security securing the Bonds, except through the security agent.

Value of secured assets

Although the Bonds are secured obligations of the Bond Issuer, there can be no assurance that the value of the security for the Bonds and the Bond Issuer’s other assets will be sufficient to cover all

the outstanding Bonds together with accrued interests and expenses in case of a default and/or if any member of the Group enters into liquidation.

57


Risk Factors (cont’d)

Risks relating to the Bonds (cont’d)

Security over assets through a Swedish law corporate mortgage

A Swedish corporate mortgage will essentially cover inventory, machinery, receivables and intellectual property rights owned by a Swedish company. It does not cover real property, cash and bank

deposits, shares and other financial instruments intended for public trading, property that can be subject to a mortgage or property that cannot be seized or that cannot form part of a bankruptcy

estate. A corporate mortgage provides security over the assets covered by the corporate mortgage up to a maximum amount equal to the lower of (a) the secured claim and (b) 115% of the face

amount of the corporate mortgage certificate plus interest on such amount from the date of the bankruptcy application at a rate corresponding to the official reference rate plus 4%. Until a seizure or

bankruptcy occurs, a company that has provided a corporate mortgage is free to deal with the assets covered by the corporate mortgage. Thus, if any of the Group’s assets are sold, the corporate

mortgage over such assets will seize to be valid. Furthermore, special priority rights with a higher ranking than a corporate mortgage (such as a possessory pledge) may be attached to or granted by

the owner over assets covered by the corporate mortgage. If this is done, such priority rights will give a better priority to these assets and the proceeds from a sale of such assets in a bankruptcy. A

corporate mortgage cannot be enforced by the mortgagee but will give the mortgagee a priority (as described above) to the proceeds from a sale of the assets covered by the business mortgage

after a seizure of such assets or by the bankruptcy administrator in a bankruptcy.

Mortgage over real property in Sweden

A mortgage over real property in Sweden will cover the relevant land unit plus certain fixtures and fittings. Depending on whether a special filing has been made, the real property may include also

certain industrial fixtures and fittings. Since the Group will make such filing, the real property mortgage granted by the Group will not include industrial fixtures and fittings. Such assets will instead be

treated as chattels and be subject to security by way of security sales from time to time. A mortgage over real property provides security over the land unit (including certain fixtures and fittings) up to

a maximum amount equal to the lower of (i) the secured claim and (ii) 115% of the face amount of the mortgage certificate plus interest on such amount from the date of enforcement at a rate

corresponding to the official reference rate plus 4%.

No security interest granted over mining concessions

Under the laws of Sweden, it is not possible to pledge to the security agent any interests in the mining concessions for the Kaunisvaara project, or any other mining concessions owned by the Group.

In the event of liquidation and the security agent’s inability to/or failure to enforce its rights under the share pledges, these rights would revert to the ownership of the Swedish state, and would not

form part of the assets available to the holders of the Bonds or any other of the secured or unsecured creditors. Moreover, it is not possible to alienate the mining concessions without the permissions

of the relevant authorities.

Perfection of certain security interests will only be perfected at a later stage

Certain bankruptcy limitations could apply under Swedish law. In particular, under the Bankruptcy Act (Sw. konkurslagen (1987:672)), in a bankruptcy or in a company reconstruction where a

composition among creditors has been approved by the court, any security granted may be nullified if (a) it was not provided for at the time the debt it secured arose or if it was not perfected without

delay following the coming into existence of such debt, unless in the circumstances it was nevertheless ordinary, and (b) it was granted later than three months before the “relevant date” (broadly, the

date when the petition for bankruptcy or company reconstruction was lodged). Such security may also be nullified if provided to a related party earlier than three months but later than two years

before the relevant date, unless it can be shown that the debtor was not insolvent at the time of the action and did not become insolvent as a result of it. The security granted pursuant to the business

mortgage and the real property mortgage will not have to be perfected until such time as the Group wishes to withdraw the proceeds of the Bonds. The security over certain of the bank accounts will

only be perfected upon an account control event and the security over future inter-company loans will only be perfected if and when such loans arise. The Group has also undertaken to create

security by way of a security sale (Sw. lösöreköp) over certain machinery and other assets acquired by the Group from time to time. All such security will be subject to the additional risk of recovery in

a subsequent bankruptcy, as described in the previous paragraph. In addition, the taking of security by way of security sale will only be perfected when (a) an announcement of the security sale

containing a specification of the assigned property has been published in a local newspaper in the area where the Group has its venue within one week of the date of the sale and (b) the security

sale has been registered at the relevant enforcement authority (Sw. kronofogdemyndighet) within eight days from the date of the announcement in the local newspaper. Provided that these

requirements are complied with, the security interest so created will be perfected 30 days after the registration at the enforcement authority.

58


Risk Factors (cont’d)

Risks relating to the Bonds (cont’d)

Limitation on the value of security provided by a Norwegian company

Under the laws of Norway, there exist certain limitations (with some exceptions) on the right for a Norwegian company to grant a valid security for its parent company’s financial indebtedness. Such

limitations may apply if the parent company is domiciled in another jurisdiction than Norway and are generally assumed to restrict a Norwegian subsidiary from, inter alia, granting any security for any

Swedish parent company’s financial indebtedness. Consequently it is assumed that the value of any security granted by Northland Logistics AS in favour of the security agent as security for the

outstanding amounts under the Bonds, will be very limited if having any value at all. The above restrictions will not apply for a Norwegian subsidiary’s right to grant any form of security for its own

financial indebtedness. The Norwegian subsidiary, Northland Logistics AS will thus be permitted to grant security over its assets for its payment obligations under inter-company loans. The creditors

under such loans may according to the provisions of the Bond agreements and to the extent permitted by applicable law, assign such inter-company loans and the security provided by the

Norwegian subsidiary (as a sub charge) to the security agent as security for the Bonds. This may indirectly create a valid perfected pledge over the Norwegian assets in favour of the security agent.

However, the right to enforce the security thereby created over the assets of the Norwegian subsidiary is subject to and limited by the from time to time outstanding amount under the relevant intercompany

loans. It is, thus, important to note that the Bond agreements do not include any specific minimum amount of principal to be granted under such inter-company loans to Northland Logistics

AS. Based on the foregoing, any investment in the Bonds should be made knowing that there is a high risk that the security granted by Northland Logistics AS, directly or indirectly in favour of the

security agent (on behalf of the bondholders), may be without or of very limited value.

Limitation on the value of security provided by a Swedish company

A Swedish limited liability company may not provide a guarantee or a pledge for the obligations of a parent or sister company, unless they belong to the same group of companies and the parent

company of that group is domiciled within the European Economic Area (EEA). Furthermore, if a Swedish limited liability company provides any security interest or guarantee without receiving

sufficient corporate benefit in return, such security interest or guarantee will, in whole or in part, be considered a distribution of assets, which will be lawful only to the extent there is sufficient

coverage for the unrestricted equity capital of the Swedish limited liability company after the distribution (i.e. at the time the guarantee is provided or the security is granted). It should also be noted

that laws relating to financial assistance in Sweden prohibit limited liability companies incorporated in Sweden from providing guarantees or granting security or other credit support for obligations of

any person where such obligations are being incurred for the purpose of acquiring shares in the company itself or in any other superior member of the same Swedish group of companies..

59


Agenda

Investment thesis

Northland Resources and the Kaunisvaara Project

Key Financials

Market Overview

Risk Factors

Appendix

60

60


Northland expected to emerge from

Reorganisation in 6-8 weeks

Details of Reorganisation Process

• The Company’s Swedish subsidiaries (the «Swedish Subs» entered

Reorganisation early February

Northland Resources AB on February 8, 2013

Northland Sweden AB and Northland Logistics AB on February 12

2013

• The Reorganisation process has allowed the Company time to develop a

composition proposal for the unsecured creditors of the Swedish Subs

• Proposal expected to be distributed to creditors by the Administrator

in the week starting May13, 2013

• A request for composition proceedings is expected to be made to the Court

in the week starting May13, 2013

• If adopted, a creditors meeting is expected to be held within 3-5 weeks of

the request, in which unsecured creditors will vote on the Proposal

• The Proposal is approved if three-fourths of voting creditors by number and

by aggregate claims vote in favor

• Upon the approval of the Proposal, it is binding for all unsecured creditors of

the Swedish Subs

• Application to terminate the Reorganisation will be made once the Proposal

is approved

• Depending on timing of Creditors Meeting, the Swedish Subs are expected

to emerge from Reorganisation around early July 2013

• Creditors not approving the Proposal may file complaints with the Court, any

such complaints may delay the process above

Important Subjects

• The restructuring of the existing bonds and the

new senior secured bond issue is conditional

upon receiving a satisfactory amount of preacceptances

from trade creditors

• The Administrator continues to work closely with

creditors to obtain agreement to the proposal.

• The creditors in NLAS have been dealt with in

accordance with the Proposal

• This process is not part of the formal

Swedish Reorganisation

• All creditors have pre-accepted the

proposal in writing

61


Expected timeline for restructuring

Monday

29

April

Friday

3

May

Monday

6

May

Tuesday

14

May

Friday

24

May

Tuesday

4

June

Early

July

• Public announcement of contemplated restructuring

• Summons to bondholder meeting

• Company update

• Bondholder meeting approval of restructuring

• First portion (of three) of total of approx USD 30 million (subject to FX movements) DSA funds released

• Notice of Extraordinary General Meeting of Northland Resources shareholders

• Start of subscription period for contemplated new First Lien Bond offering

• Expected closing of subscription period for contemplated bond offering

• Implementation Date: Funding and Issue of contemplated new 1st Lien Bond, anticipated amendment

of Existing bonds into Second Lien Bonds, and expected repayment of the Trade Supplier Liquidity

Funding

• Extraordinary General Meeting of Northland Resources S.A. to seek certain approvals from existing

shareholders needed for the Restructuring Proposal

• If the EGM can not be held due to quorum not being achieved, repeat notice to be distributed for an

EGM to be held June 28, 2013. Dates to be finally confirmed.

• Expected emergence from Reorganization

• If the Shareholder Approvals were not obtained in the Extraordinary General Meeting, implement the

Share Pledge Enforcement

62


Main terms of the restructuring of the Existing

USD 370m bonds

• The existing bonds will be amended to become a 2 nd lien convertible bond with Northland

Resources S.A. as issuer (subject to approval by the EGM of Northland Resources S.A.)

• The structure of the bonds is intended to ensures that the 2nd lien convertible for all practical

purposes will behave as equity, while being structured as a debt instrument

• The 2 nd lien convertible bond will be convertible into shares representing 80.5% of the Post-

Restructuring Pro Forma Equity of NRSA

• The number of shares will be constant, meaning PIK interest paid will result in corresponding increase in strike price

for the shares

• Conversion can be done by the holders at any interest payment date from and including 15 July 2013

• Mandatorily convertible by the company from 16 July 2018, see below

• The remainder of the funds on the DSA accounts (approx USDm 30, subject to FX movements)

will be released to the Company

• Maturity 15 October 2020

• Interest rate 4%, payable semi-annually

• Interest to be paid on PIK basis in 2013, 2014 and 2015 and thereafter in cash or PIK subject to

payment of first lien bond interest, available cash and waterfall

• The convertible bonds may be mandatorily converted at the Company’s option subject to a

successful refinancing of the New 1 st lien bond from 16 July 2018

• The security package will be substantially the same as for the current bonds, however on a

second lien basis

• The convertible bonds may propose three members to the board of Northland Resources S.A.

Note: Please refer to the press release dated 29 April 2013. Further details to be provided in due course.

63


Main terms of supplier credit facility

• The Reorganisation plan that has been developed by the Administrator proposes that the liabilities of each trade creditor of Northland be

repaid by December 31, 2013 up to a maximum, in respect of each creditor, of SEK 2.6 million.

• In addition, and subject to the release of certain funds to the Issuer, a further USD 30 million will be available to repay trade creditors with

claims exceeding SEK 2.6 million, who will each be repaid out of such funds on a pro rata basis by 31 December 2013.

• The remaining Trade Claims (and accrued interest on such Trade Claims) will be subdivided into two categories:

• Remaining Trade Claims that are owed to Metso and Peab, which together represent approximately 93% of the remaining Trade

Claims (the “M/P Outstanding Trade Payables”); and

• Remaining Trade Claims that are owed to other trade creditors (the “Other Outstanding Trade Payables” and, together with the

M/P Outstanding Trade Payables, the “Outstanding Trade Payables”).

• The Outstanding Trade Payables will be subject to the following terms:

• Final Repayment Date:

• Repayment:

• M/P Outstanding Trade Payables: July 15, 2020, being three months before the maturity date of the Second Lien Bonds.

• Other Outstanding Trade Payables: January 15, 2017.

• M/P Outstanding Trade Payables: 10 installments on each of the Payment Dates beginning on the 15 January 2016

Payment Date, subject to payment of interest on first lien bonds, sufficient free cash flow and in accordance with the

Waterfall; final payment to be made on the 15 July 2020 Payment Date.

• Other Outstanding Trade Payables: four installments on each of the Payment Dates beginning on the 15 July 2015

Payment Date, subject to payment of interest on first lien bonds, sufficient free cash flow and in accordance with the

Waterfall; final payment to be made on the 15 January 2017 Payment Date

• Interest: 4% per annum (calculated on a 30/360 basis) with effect from (and including) 8 February 2013. Interest will accrue from 8

February 2013 but will only become payable on the Payment Dates in accordance with and subject to the Waterfall.

• Creditors not willing to accept payment over a period exceeding one year as set forth above will instead receive payment of 35 per cent of

the total principal amount outstanding, but minimum the lower of i) the amount owed and ii) SEK 2.6 million.

• Metso and Peab, being Northland’s two largest trade suppliers, together may vote to propose one candidate as member of the board of

directors of Northland, the appointment of whom will be subject to shareholder approval.

64


Profit & Loss Statement 2012

Year ended December 31,

2012 2011

USD '000

Revenue - -

Cost of sales (24 029) -

Gross profit/(loss) (24 029) -

M arketing 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)

65


Balance Sheet per 31 December

As at December 31, As at December 31,

2012 2011 2012 2011

USD '000 USD '000 USD '000 USD '000

Assets

Equity and liabilities

Non-current assets

Shareholders' equity

Exploration and evaluation assets 80 054 64 165 Share capital 50 425 21 592

M ines under construction 678 079 236 794 Share premium 662 591 388 576

Property, plant and equipment 235 262 9 345 Reserves 36 213 29 452

Intangible assets 910 1 241 Cumulative losses (124 713) (99 907)

Financial assets 49 427 27 632 Total equity 624 516 339 713

Total non-current assets 1 043 732 339 177

Non-current liabilities

Current assets Borrowings 358 131 4 302

Inventories 5 928 - Finance lease obligations 17 937 -

Accounts receivable 19 689 17 291 Provisions 28 758 327

Other current assets 65 302 23 979 Other non-current liabilities 7 536 -

Cash and cash equivalents 53 739 38 324 Total non-current liabilities 412 362 4 629

Total current assets 144 658 79 594

Total assets 1 188 390 418 771 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

66


Kaunisvaara Mineral Reserve

Statement

Deposit

Reserve

Classification

Ore (million

DMT)

Fe Grade

(%)

Tapuli

Sahavaara

Proven 51.7 27.14

Probable 42.8 25.32

Proven 30.2 42.96

Probable 40.2 40.17

Tapuli Whittle Pit Shell from Kaunisvaara DFS (June 1, 2011)

Total Proven 81.9 32.98

Total Probable 83.0 32.51

Total 164.9 32.74

Note: The Mineral Reserve Statement generated by SRK Consulting (UK) Limited (“SRK”), based on the

Mineral Reserve Statement made public in the June 1, 2011 Technical Report. SRK’s resource and reserve

statements are presented in accordance with the definitions and guidelines of the CIM Standards for

reporting Mineral Resources and Reserves (the CIM Code)

Sahavaara Whittle Pit Shell from Kaunisvaara DFS (June 1, 2011)

67


Kaunisvaara Mineral Reserve

Statement

Item Tapuli Sahavaara

Ore Reserves 94.5Mt @ 26.32%Fe 70.3Mt @ 41.4% Fe

Waste 239.4 Mt 302.8 Mt

Overburden 12.7Mm 3 7.7Mm 3

Ore mined 6 Mtpa 6 Mtpa

Waste mined +/- 22 Mtpa +/- 34 Mtpa

Strip ratio 2.53:1 4.31:1

Development start Q1 2011 2015

First concentrate Q4 2012 2016

First shipment Q1 2013 2016

Production through 2027 2028

Source: Kaunisvaara DFS and Company Update February 2012. The Mineral Reserve

Statement generated by SRK Consulting (UK) Limited (“SRK”), based on the Mineral

Reserve Statement made public in the June 1, 2011 Technical Report.

68


Management Team

Executive Team

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

Eva Kaijser, CFO. Worked for Boliden AB,

a member of Group management since

2007. Experienced as Finance and

Treasury Manager and Group Controller.

15 years experience.

Peter Pernlöf , COO and VP. Previously

consultant in energy, procurement and logistics.

Former CEO of BasEL AB. Experience also

includes VP – Procurement at Boliden AB.

40 years international experience.

Hans Nilsson, VP – Marketing. Former GM

of the LKAB iron ore port in Luleå, in the early

90's Regional Sales Manager for LKAB in

Singapore and later Regional Sales Manager

at Minelco AB. 30+ years experience

Jukka Jokela, VP – Finnish Operations and

Exploration, has over 25 years of international

experience in mineral exploration, geological

research, and project and company

management in different mining and

exploration companies.

69


Management Team, cont’d

Jonas Lundström, Deputy COO and

VP – Corporate Communications. Former

President of the Norrbotten Chamber of

Commerce. 12+ years experience

Manfred Lindvall, VP – Environment,

Health & Safety. Former VP, EHS of Boliden

and Lundin Mining. 37 years experience.

Anders Antonsson, VP – Investor Relations.

15+ years experience in Investor Relations,

including positions as Director of IR and

Corporate Communication at Intrum Justitia

and consultant in Investor Relations

Patrick Foster, Director of Finance. 30+

years experience, including working with

mining companies both as a Director and as

an advisor on corporate strategy, fund raising

and investor relations.

Klas Olsson, VP – Procurement. Former

Supply Chain manager, Peab PGS. CFO for

HL Display Sweden AB and Maintech AB.

Also experience from Boliden Procurement.

Willy Sundling, Project Manager – Logistics.

Extensive experience as Project manager for

large public projects in Swedish municipalities

(Kalix and Luleå)

70