With a striking renegotiation of the final purchase agreement for Sydvaranger, reducing the initial payment from USD 1+19m to USD 1+0.5m, GRANGEX succeeds in avoiding both diluting existing shareholders and bringing in equity partners in Grangex Sydvaranger AS, as was the previous plan. Combined with issue proceeds and the finalized
Favourable renegotiation of final terms for Sydvaranger
From initially expecting to pay
Soon thereafter, GRANGEX also announced the closing of the offtake agreement with
The first step in GRANGEX’s plan for Sydvaranger is to make a new optimal mining plan, confirm a direct reduction grade product specification as well as new tailings disposal method. Based on an existing feasibility study from 2020, the
Set for now, but major raise on the near term horizon
With an estimated
In Dannemora, an updated feasibility study was initiated in December, which will define the total CAPEX, and thus the total financing requirement. Project financing and investment decision were previously planned to be completed during Q2’2024, but we now expect that to be somewhat delayed into H2’24. The start of the mine drainage is planned to begin as soon as the investment decision and full project financing are in place. As a consequence we now postpone our expected production start to H2’2026.
Along with the case in Dannemora that already offers good potential value for shareholders, we have now included Sydvaranger into our rNPV calculation, although we highlight that uncertainty in this side of the model is markedly higher, at least until the company presents an updated Feasibility study. That being said, the first data points from Sydvaranger indicate an even greater potential than in the previous DFS (ie an NPV well above
Key milestones for investors
After the short-term financing round now completed, we look forward to:
• updated DFS and commencement of drainage of Dannemora in H1’24
• updated DFS for Sydvaranger later in 2024
• the major capital raise slated for 2024
• Production start in Dannemora in 2026
• Final Investment Decision for Sydvaranger in H1’26
Read the full report here: https://www.emergers.se/grangex_t24
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