Nordic Gold Provides Status Update Vancouver, BC / TheNewswire / February 13, 2019 - NORDIC GOLD INC. (TSX-V: NOR) ("Nordic" or the "Company") today announced that due to a shortfall in tonnes and grade to the mill, it is experiencing liquidity and operational issues.
Although the Company was funded to production by a gold forward sale and a loan, Nordic began operations with a working capital deficit and has continued operating with a working capital deficit to date. Over the last 14 months, significant efforts have gone into finding additional lenders and investors to remedy this situation but these have been unsuccessful due to market conditions and the structure of the Company's financing.
Until very recently, the Company had hoped that its current financier and lender would provide additional financing, but this has not materialized due in part to operational issues and production shortfalls, including those noted below. As a result, the Company is experiencing liquidity and cash flow uncertainties.
In addition to the liquidity issues, the Company is dealing with operational issues caused by the under performance of its mining contractor. This has resulted in lower than expected grade and tonnage to the mill, causing the Company to miss various milestones under the terms of its current financing. The Company is working with the contractor to remedy these issues.
The Company has also started a cutback on the north pit to provide access to additional high-grade ore bodies. The cutbacks will widen the pit and provide access to additional mineable ore.
The Company poured another 22kg of 85% dore on February 05, 2019. The estimated value of this pour is EUR707, 000 or US$805,442. To date, the Laiva Mine has produced a total of 189.6 kg of dore (6,096 ounces of gold) since the first pour on 30th November 2018 and had received US$7,764,027 in revenue from gold sales. The Company will process an additional 40,000 tonnes of ore through the mill at a grade of 1.1 g/t Au and expects to produce an additional 1217 ounces of gold by the end of February.
Michael Hepworth, President and CEO stated: "This lack of working capital and the operating challenges have resulted in a slower than expected ramp up to commercial production as we have not been able to adequately finance the ramp-up process and building up a gold mine takes time and money. The Company is now examining all strategic alternatives to remedy this situation".
Qualified Person
The scientific and technical information in this news release has been reviewed and approved by Paul Sarjeant, P.Geo., a Qualified Person under National Instrument 43-101 and a director of the Company.
For further information, please contact:
Michael Hepworth
President and Chief Executive Officer