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Nordic Gold October 2019 Letter to Shareholders: The Path To Production





Vancouver, B.C. - TheNewswire - October 10, 2019 - Nordic Gold Inc. (TSXV:NOR) ("Nordic" or the "Company") - Brian Wesson releases the following letter on behalf of the Board of Directors.

Dear Shareholders,

I would like to take this opportunity to introduce myself, provide a corporate update and outline the immediate path forward for the Company.

Lionsbridge Capital Pty Ltd. (Lionsbridge) has undertaken a comprehensive review of the Company with a view to understanding the issues of the past and how best to unlock shareholder value. The review included extensive work in advance of taking over management of Nordic, and a more comprehensive review since assuming management of your Company in July 2019. From our work to date, it is evident to Lionsbridge that the Laiva Gold Mine holds significant potential that was not able to be realized by previous operators due to a lack of experience in mining this type of asset, beginning mining without requisite knowledge and expertise and, as a result, pursuing unsustainable debt arrangements.

The challenges facing the Company, we believe, can be overcome by a management team with extensive mining experience, specifically in assets of this type, with a focus on planning, to ensure the mine is returned to production when the asset is able to sustain the grade and tonnage required.

The Laiva Mine, we believe, is a unique asset, with significant funds spent on two open pits and a state of the art processing facility all located in one of the world's best mining jurisdictions.

We were honoured to be able to take over management Nordic in July and are excited by the prospect of growing the Company and creating shareholder value.

Corporate Update

The Board of Directors and Management of the Company was changed on July 2, 2019. The new management team has extensive experience in identifying distressed companies having intrinsic value that requires a new team and philosophy to unlock the value. Lionsbridge is unique in that we bring both expertise in corporate management of listed mining and energy companies and significant and proven technical expertise in ownership and management of gold assets. Consequently, we are able to attract the support of debt and equity markets to projects that we are involved.

The management and directors of the Company were overwhelmingly approved by the shareholders of the Company on August 28, 2019 at the Annual and Special Meeting of the Company's shareholders held in Toronto.

Since the new management took over the Company, our primary focus has been to address the debt position of the Company. The debt between the Company and PFL Raahe Holdings LP (Pandion) was not sustainable in the expected timeframe and on its terms. Further, the requirement to further amend the debt meant the Company had to transfer significant value of its production to the debtor.

We have worked very closely with Pandion and, as announced on October 7, 2019, we were successful in reaching an agreement to reduce the Pandion debt from US$63.4 million to US$24.5 million with the first cash payment not due for 18 months.

The agreement to settle the Pandion debt has removed all gold deliveries, interest payments, upside participation and the free carried equity 'top up' right that negatively impacted shareholder value. The removal of these terms will directly influence the profitability and value of the Laiva asset and has unlocked significant value for shareholders.

Additionally, as announced on October 7, 2019, Pandion has agreed to provide US$900,000 in additional funding for the Company to allow it to maintain operations (this is in addition to the US$5 million in funding provided by Pandion since management took over). This additional funding will ensure the Company is sufficiently capitalized to move forward with its plans. Finally, Pandion has agreed to maintain their 19.9% equity position in the Company by taking equity in the Company in lieu of their first $1.56 million.

New management has also worked closely with the Company's extensive creditors to stabilize and settle the vast majority of outstanding accounts. The Company is now in a position that it has no significant claims against it nor is it in default on any of its obligations.

Taken together, the above puts the Company in a position to work towards restarting operations in Q2 2020.

The Company plans to submit documentation and, subject to shareholder and TSXV approval, change the Company's name to Otso Gold Corp. We believe a company name change is an apt signal of the new path forward and future of the Company. The Company is also in the process of changing the name of its Finish subsidiary Nordic Gold OY to Otso Gold OY.

Management has spent considerable time over the previous months finalizing a plan forward and resolving the Pandion debt. The way in which we operate is to provide frequent news releases, coupled with shareholders letters issued regularly to provide shareholders a measure of the progress of your Company.

Path Forward

The intrinsic value of Nordic is in the Laiva project. Accordingly, our focus is firmly on returning the Laiva Gold Mine to production.

The immediate plan for the Company is threefold:

  1. 1.To recapitalize the Company;

  2. 2.To complete confirmatory technical work; and

  3. 3.To return to production.

Recapitalize the Company

The Company is sufficiently funded for its immediate working capital needs. However, we will seek to raise additional capital for the Company to progress and complete each of the below.

We plan to raise a total of $7 million to complete the confirmatory technical work referenced below and to best position the Company to raise further funds on favorable terms for the restart of the Mine and eventual repayment of Pandion - noting that one of the Company's constraints thus far was that it raised funds on unfavorable terms due to the Company's situation.

We note that the funding required for the actual restart of the Laiva Mine can be raised either through equity at higher prices than currently is the case or through a standard debt arrangement. We also note that the runway that Pandion has provided gives the Company the ability to fund their repayments from operational cash flow or a debt instrument - thereby providing management with alternatives to dilutive equity.

Complete Confirmatory Technical Work

As mentioned, new management has spent considerable time ensuring the technical veracity of the project and building confidence therein. However, in our experience, an independent technical view on our plans for the project brings confidence to investors and the market. As such, Lionsbridge works closely with Coffey - A Tetra Tech Company (Tetra Tech) out of the United Kingdom to ensure our operations are always 'best in class'.

The first step in this process is to release an updated NI 43-101 technical report estimating the asset's resource base1. We have begun this process and expect to release it to the market shortly.

The second step is for senior management and technical staff to work closely with Tetra Tech to design and carry out a drilling program to further estimate the resources, lay the groundwork for opening a third pit and exploratory drilling. It should also be noted that multiple previously issued technical reports recommended such a program.

Finally, grounded in the above, the Company will issue a Tetra Tech published restart plan at feasibility level sensitivity detailing the plan for the Company to restart production.

Return to Production

The projected restart date of operations is June 2020. The reason the Company is deferring the restart to Q2 2020 is to avoid another premature restart of operations. We plan to ensure that the mine will be operational over the long term. The extensive technical work completed up to that point will ensure this is true and independently confirmed.

I would like to reiterate, on behalf of the Board and management, that we are excited by the opportunity that the Nordic asset presents. We look forward to working closely with shareholders, investors and stakeholders to return the Company to production with a view to unlocking shareholder value. We encourage you to participate in your Company.

About Lionsbridge and Westech

The Lionsbridge model delivers our clients innovative and cost-effective overall management solutions that have consistently delivered world class returns and investor wealth.

The Lionsbridge Management service offering is focused on the integration of Lionsbridge personnel and our network of contracting personnel into the management structure of both listed and unlisted companies. Lionsbridge benefits from experience in both ownership and management of natural resources companies in global markets and across the entire natural resources sector.

We distinguish ourselves in our ability to provide our clients with a highly efficient, vertically integrated service offering spanning all areas of management of natural resource companies including 'c' suite management, board supervision, administration, investor relations, professional services and overall technical and mine management.

Our clients benefit from the appointment of strong management teams with the dedication, capability and experience to take them forward to the next stage of their development. All of our key people have worked extensively together throughout the world creating a uniquely cohesive management team.

Westech International Pty Ltd (Westech) is focused on the development, design and engineering of innovative solutions for natural resource projects. Westech offers its clients the full suite of technical solutions from feasibility studies to process optimization and process design, development, construction, fabrication and management.

As a group we are able to offer natural resource projects the complete suite of both technical and corporate solutions required to unlock an assets intrinsic value throughout its lifecycle.

The technical disclosure in this news release has been reviewed and approved by EUR ING Andrew Carter BSc, CEng, MIMMM, MSAIMM, SME and a Qualified Person as defined by National Instrument 43-101.

Important Footnote 1

The Company cautions that it has not defined or delineated any proven or probable reserves for its Laiva Property and mineralization estimates may therefore require adjustment or downward revision based upon further exploration or development work or actual production experience. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

The Company also cautions that the decision by the Company to proceed to develop the Laiva Mine Project and extract mineralization proceeded without the Company first establishing reserves supported by a technical report and completing a pre-feasibility or feasibility study. Accordingly, there is a higher risk of technical and economic failure at Laiva because development proceeded without first establishing reserves supported by a technical report and completing a feasibility study. This is particularly relevant as the Company has proceeded with development at Laiva on indicated and inferred resources without first completing a preliminary economic report.

Signed "Brian Wesson"
President and Chief Executive Officer

FOR FURTHER INFORMATION PLEASE CONTACT:
Clyde Wesson

Vice President
1001 - 409 Granville Street

Vancouver, BC V6C 1T2
info@nordic.gold
www.nordic.gold

+61 403 799 540

About Nordic Gold

Nordic Gold Inc (TSXV:NOR) owns 100% of the Laiva Gold Mine in Raahe, Finland. The project is fully permitted, has a fully built process plant, has two pits open and is ready for production.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Mineral resources that are not mineral reserves do not have demonstrated economic viability. This document contains certain forward looking statements which involve known and unknown risks, delays and uncertainties not under the Company's control which may cause actual results, performance or achievements of the Company to be materially different from the results, performance or expectation implied by these forward looking statements