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June 3, 2010 - 7:31 AM EDT
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Northland Signs First Offtake Agreement
Jun. 3, 2010 (Hugin AS) --
Luxembourg, June 3, 2010: Northland Resources (TSX:NAU) S.A. ("Northland" or the "Company") is pleased to announce that the Company has entered into a binding Offtake Agreement with Stemcor for the deliveries of 1 million tonnes of iron concentrate per year from the Kaunisvaara Iron Project.
The Offtake Agreement is for an initial eight-year period, with the first delivery of iron concentrate from the Kaunisvaara Project planned for 2H 2012. The iron concentrate will be sold primarily to the European market, but Stemcor may also sell to selected global customers.
In addition to the Offtake Agreement, the parties have also signed a Letter of Intent, whereby Stemcor intends to commit USD 50 million of working capital to finance the Kaunisvaara Project.
"The Offtake Agreement and the Letter of Intent provide a clear indication of the strong interest in the Kaunisvaara Project by the global steel industry. We are pleased to have reached another significant milestone in the development of the Project," stated Karl-Axel Waplan, Northland's President and Chief Executive Officer.
Alex Blohm, Stemcor's Director of Special Projects, said: "Stemcor is pleased to align itself as a partner of Northland on a long-term basis. Northland's Kaunisvaara Project is particularly attractive due to the high grade iron content, low level of contaminants and proximity to markets in West, Central and Eastern Europe. We look forward to working with raw material processors and steel makers in those regions."
Stemcor is the world's largest independent steel trader, trading some 15 million tonnes of steel and steel-making raw materials annually. Their business interests span every step in the steel supply chain including mining, trading, distribution, stockholding and finance.
Northland is a development-stage mining company with a portfolio of iron projects in northern Sweden and Finland. Northland's Kaunisvaara Project contemplates the staged development of 3 magnetite iron ore deposits that would provide feed to a single, multi-line processing facility in Sweden, producing a high-grade, high-quality magnetite iron concentrate. The results of the Feasibility Study on the Kaunisvaara Project will be released this summer.
"Karl-Axel Waplan" "Alex Blohm"
President & CEO Director of Special Projects
Northland Resources S.A. Stemcor