Dannemora bankrupt

Mining and exploration company Dannemora Mineral AB (STO: DMAB B, OSE: DMABB) has filed for bankruptcy. The stock is suspended from trading. The company, which was founded in 2005, had been in reorganization proceedings since May 2014 and in special observation since late 2013. In 2014 1.2 Mton of ore was produced and in last month the company said it was EBITDA positive. Continuing operations would however require investments in mass recovery and the transfer of the crusher underground.

In the current extremely low iron ore price environment, no financing could be found and customers were starting to prepare for finding new suppliers. On Monday the company announced ceasing of all production until liquidity situation could be resolved. This precipitated a gradual 50% slide in Swedish exchange to 0.33 SEK per upon Tuesday close. In 2012 the stock traded near 60 SEK. Dannemora had been supplying ThyssenKrupp Steel Europe AG, Salzgitter AG, and Stemcor UK Ltd.

The historic Dannemora Mine was reopened in the Summer of 2012. It had last been closed in 1992 by SSAB after the mine had been running for over 500 years. The last mineral resource update showed probable resources of just under 35 Mton remaining with measured resources below 20 Mton. With those estimates, the mine was supposed to have under 10 years remaining in operation as is. Its magnetite iron ore could be crushed and processed into high purity with low levels of phosphorus and vanadium. Recent recovery rate was around 40% with target above 50%.