Nordic Mines (STO: NOMI) production update on Friday wasn’t well received by the markets. The Laiva mine in Raahe, Finland produced 130 kilos of gold in Q1 2012 (68 kg in March), which was far below its own expectations. The Board has thus decided the strengthen liquidity with further forward sales of gold. The stock slid 17%.
At the end of March production reached around 3 kilos of gold per day. Planned capacity is around 10 kilos. The company has already used most of the proceeds from an 89 million SEK private placement that took place around a month ago at 51 SEK per share. The funds were intended to be used in working capital and exploration needs but the company has had to repay loans, interest and the difference of gold price vs. contracted price in accordance with loan agreement.
On Saturday the company sent a press release responding to comments in the Finnish media regarding environmental issues concerning the waste water pool. Nordic Mines has applied for a license to release rainwater via temporary outlet that was used in the development period. Much of the media speculation has focused on the fact that the waste water pool of the mine is nearly full but the water levels haven’t so far exceeded the permitted levels.
The magazine headlines in Northern Finland insinuated the rainwater release permit to mean waste water release. Nordic Mines says analysis of the rainwater indicate no harmful levels of any substances. Nordic Mines has previously been granted environmental license for a pipe laid to sea in 2012 for the surplus water from the enrichment works at the open cast mine currently gathered in the dammed pool.
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