Earnings call transcript: Nordic Mining Q2 2025 reveals operational loss, stock dips

In its Q2 2025 earnings call, Nordic Mining (market cap: $25.36 million) reported a challenging quarter marked by an operating loss of 103 million Norwegian kroner, despite generating its first revenues from garnet shipments. The company’s stock saw a significant decline in pre-market trading, dropping 20.26% to $18.50. According to InvestingPro data, the stock’s RSI indicates oversold territory, suggesting potential for a technical rebound. Despite this, the company maintains a robust cash position of $438 million and is focused on ramping up production capabilities.

Key Takeaways

• Nordic Mining reported its first revenues of NOK 2.7 million from garnet shipments.
• The company experienced an operating loss of NOK 103 million.
• Stock price fell by 20.26% in pre-market trading following the earnings release.
• Production ramp-up continues, with the first rutile shipment expected by Q3 end.
• The company is strategically positioned in the European mineral supply chain.

Company Performance

Nordic Mining’s performance in Q2 2025 was mixed, with the company achieving its first revenues from garnet shipments while facing a significant operating loss. The company is in the midst of a production ramp-up, currently operating at 75% design capacity in crushing and milling, and 50% in dry separation. Despite these challenges, Nordic Mining’s strategic positioning as a key mineral supplier in Europe remains a strong point.

Financial Highlights

• Revenue: NOK 2.7 million from initial garnet shipments.
• Operating Loss: NOK 103 million.
• Cash Position: $438 million.
• Operational Cash Flow: Negative SEK 93 million.
• Total Operating Costs: SEK 77 million.

Earnings vs. Forecast

The company did not provide specific earnings forecasts, but the reported operating loss and initial revenues may have fallen short of market expectations, contributing to the stock’s pre-market decline of 20.26%.

Market Reaction

Nordic Mining’s stock price dropped 20.26% in pre-market trading, settling at $18.50. This decline reflects investor concerns over the company’s operating loss and the ongoing production challenges. The stock’s movement contrasts with its 52-week range, where it had previously reached a high of $28.67.

Outlook & Guidance

Nordic Mining aims to stabilize production at signed capacity by the end of the year. The company anticipates a flat or slightly down market in the next quarter but remains optimistic about its ongoing production ramp-up and the expected first rutile shipment by Q3 end. Additionally, results from its ongoing quartz project are expected by mid-next year.

Executive Commentary

• "We are making good progress with our board on an updated strategy," said Fin Marm, highlighting the company’s strategic focus.
• Plant Managing Director Kenneth Nachen Aingedal noted, "We are fully running the plant in all stages at simultaneous operation," indicating operational advancements.
• Fin Marm also projected, "We expect the market to be flat or slightly down in the next quarter," reflecting cautious optimism.

Risks and Challenges

• Legal challenges from an NGO court case could impact operations.
• Market fluctuations in titanium dioxide and garnet could affect revenue.
• Production ramp-up delays may hinder achieving full capacity by year-end.
• Supply chain disruptions could affect mineral shipments.
• Macroeconomic pressures may impact overall demand for minerals.

Q&A

During the Q&A session, analysts inquired about the production status of rutile, with confirmation that over 50 kg had been produced at specification. The company also addressed legal challenges, expressing confidence in government support and discussing potential permit scenarios. No immediate production stoppage is expected, despite ongoing legal issues.

Full transcript - Nordic Mining ASA (NOM) Q2 2025:

Fin Marm, Presenter/Company Representative, Nordic Mining: Welcome to Nordic Mining’s presentation of our second quarter results. My name is Fin Marm, and I will be presenting main highlights from the quarter. Following that, Kenneth Nachen Aingedal, who’s the managing director of our Engieber plant, will talk about operations. And finally, our group CFO, Tord Milling, will go through financials. Following that, we’ll have a q and a.

The company recorded one lost time injury related to production at the Engibre plant in the second quarter. We had our official opening at Engibre with representatives from local and regional authorities as well as the government who all showed very strong support for the project, and they all reinforced the importance of our operation for the supply of strategic minerals to Europe and beyond. The first commercial shipment of Garnett was dispatched in May and a total of 3,900 tonnes were produced. The production ramp up continued with high operational activity, but limited out output leading up to our plant shutdown in July. During that shutdown, we carried out upgrades to pumps and other parts of the plant and these improvements appear to have had the desired effect on the processing plant, which should translate into increased reliability and throughput as we continue the production ramp up.

Production of rutile has commenced with a target of having volumes ready for shipment by the end of the quarter, and we maintain our target of stable production at the signed capacity at year end. In terms of financial results, the company reported first revenues from Engieberg in the quarter of NOK 2,700,000.0, following the sale of two small shipments of Garnett. The reporting operating loss for the quarter was 103,000,000. We are making good progress with our board on an updated strategy for the company and we’ll conclude that later this fall. In August, the Court of Appeals ruled in favor of the NGOs in their case against the Norwegian state in which they have challenged the key permits for Engieberg.

Nordic mining is not a party in the court case and the permits that we hold for Engerberg are valid for the company and the production ramp up will continue as planned. We ended the quarter with $438,000,000 in cash, providing a financial foundation and sufficient liquidity to support the operations going forward until we’re cash flow positive. Before I hand over to Kenneth, I will briefly comment on the market developments. The titanium dioxide prices were flat in the second quarter most regions compared to the first quarter. The demand for titanium sponge remains strong while pigment segment continues to be weak.

We expect the market to be flat or slightly down in the next quarter, and this is due to soft demand in China leading to the export of surplus volumes. The Garnett abrasive market is tight with growing demand, while the supply side has seen curtailments from South Africa and delay of new production in Australia. Thus, we see very strong demand from the Garnet from Engibwe in the current markets. Over the last months, we’ve had visits from most of our customers at Ingebo, and they’re all eager to receive both rutile and garnet. And, they’re asking us when the volumes will be ready for shipments.

This provides real evidence that there is a strong demand for our products. Now over to Kenneth to talk about an operational update from Egebo.

Kenneth Nachen Aingedal, Managing Director of Engieber Plant, Nordic Mining: Thank you, Vin. While looking at some pictures over the process plant at Angibor, we are happy to announce that now we are fully running the plant in all stages at simultaneous operation, meaning from crushing to final product. In the first quarter presentation, we talked about that we were producing in stages, but this is now a chapter that we put behind us and are focusing going forward. At the same time, we are also taking the hard learned experience from the first and second quarter into experience and continued and lengthy operations. We are on day to day and week to week increasing our production volumes and throughput in the plant.

Our hard earned experience is fantastic to see when our operators, both on process and maintenance, are keeping the plant running for longer and longer durations. So a little bit update on our maintenance stop. We had some underperforming slurry pumps that we were modifying, and we now see positive results after the change and modifications done during the maintenance stop. We have not yet fully checked the validity of the pumps because we have not reached full design throughput yet. So we are continuing and monitoring the progress while we ramp up.

But at the moment, we do not see any issues on the pumps that we have been modifying. Through the maintenance stop, we also did other inspections, repairs and modifications to facilitate the increased throughput of the plant on bulk material handling, transport conveyors, trut transfers and so on. A little bit on production statistics. When ramping up, there are a multitude of issues and challenges and parameters to look at. The three main ones are the throughput in each step of the plant, it is the operational time and of course, in the end, the recovery and production volume of final mineral concentrates.

Our focus has always been to maintain a high quality according to our specification in the offtake agreements with our customers. When looking at the current throughput, we are seeing a 75% design capacity through crushing and milling into our wet plants. We see the design throughput in our dry separation plant at roughly 50%. It’s important to mention that these throughput is not the same as mineral recovery. We are keeping the mineral concentrate at the correct quality, but the production volumes are still low.

We expect now that we are increasing the throughput on both crushing and milling into wet plant and dry plant in the coming weeks also to require fine tuning and to upgrade both the quality and the final product volumes as we go along. So a little bit back to what was mentioned in terms of production volumes going forward. We are continuing to ramp up as planned. We are focusing on maintaining the quality of our final concentrates. And we are in a phase with uncertainties, as mentioned before, and we do anticipate that we need to continue modifications tuning in the coming months as we increase the design throughput to reach our design capacity at the end of the year.

It’s very motivating to see all the learnings from our team and all the challenges being met on a daily basis and fixed going forward. So we are happy to go into the next half year with positive volumes in the end.

Tord Milling, Group CFO, Nordic Mining: Okay. We begin by addressing cash flow in the second quarter. Operational activities resulted in a negative cash flow of SEK 93,000,000. The operation has been characterized by activity high activity throughout the quarter and we have had extraordinary costs associated with the challenges we faced in the plant. This includes hired personal and external services.

Changes in the working capital had a negative impact on the operating cash flow in this quarter as opposed to a similar positive change in the first quarter. So there is a timing effect here. Cash flow from investment were negative with 44,000,000, which originates from the construction project. The overall remaining CapEx related to this project is lower than the SEK44 million we had in this second quarter and relates to holdbacks against some of the EPCs. The final amount we are to pay to the EPCs and time of payment is still under various discussions and has not yet been finally agreed.

Going forward, we anticipate the underlying operational expenses to be stable and the cash flow from investment activities to be reduced. We end the quarter with SEK $439,000,000 in cash, whereof SEK $368,000,000 in Engieberg, which will be sufficient to take us into a cash positive operation. Moving over to P and L. First revenue from the Engenburg project was kicked off with the first shipment of Garnet in May. The revenue of SEK2.7 million relates to two smaller shipments of Garnet in the second quarter.

Operational expenses are affected by high activity and inconsistent operation that involves a lot of starting and stopping, in addition to extraordinary cost to handle the issues that relates to the pump circuit. As Kenneth mentioned, this has improved significantly after the planned maintenance shutdown in July. So going forward, we anticipate a transition towards a more normalized cost base driven by production level in the plant. Excluding depreciation, we have total operating costs in the quarter of SEK77 million for the group, which also includes million for the share based compensation program announced in June. This is a noncash provision being made as the program vests.

In addition, we have approximately NOK 2,500,000.0 in costs related to the quartz project. Going forward, we will have a strong focus on sending the first cargo of rutile and continue production and ramp up towards design capacity by year end. So with that, we move over to Q and A.

Q&A Moderator, Nordic Mining: Thank you. I think we’ll start with we we have received some a few questions, and we’ll try to merge them. Those are similar. Kenneth, have you successfully produced more than 50 kilos of rutile at deliverable quality?

Kenneth Nachen Aingedal, Managing Director of Engieber Plant, Nordic Mining: Yes. We can confirm that you have delivered or produced more than 50 kilograms of rutile at the specifications required in our offtake agreements.

Q&A Moderator, Nordic Mining: There’s a question about the pump design here. The issue was noted by independent engineers several years ago and also noted in the investor presentation from March 2023, why was the pump design risk not mitigated on the drawing board?

Kenneth Nachen Aingedal, Managing Director of Engieber Plant, Nordic Mining: The risk related to the investor presentation back in, I guess, March 2023 is a list of the full risk by the independent engineer. And that risk mentioned there related to pump circuits is not relatable to the actual issue we saw and challenges we saw in the plant.

Q&A Moderator, Nordic Mining: Thank you. Finiva, what what is the current status of the quartz project in Kwin Harad?

Fin Marm, Presenter/Company Representative, Nordic Mining: So we’ve taken out some volumes of of quartz that is being processed in in a facility in Europe, and we expect to see the results of that processing sometime mid next year.

Q&A Moderator, Nordic Mining: And the round question here, how how is the project Engieberg doing in two years from now?

Fin Marm, Presenter/Company Representative, Nordic Mining: Good.

Q&A Moderator, Nordic Mining: What is the expected timeline for utilization of titanium dioxide from Engber in the production of titanium sponge?

Fin Marm, Presenter/Company Representative, Nordic Mining: So we plan, as I said, in my presentation, to, have available the first shipment of rutile in, before the end of the third quarter. And the processing time line of that with our customers, in Japan, I’m not exactly sure of, but, I would assume that, that it will go pretty quickly through their processing plant. One of the customers receiving that shipment is indeed producing, titanium sponge, and demand is high, right now for titanium. So I would assume that it it goes through pretty quickly.

Q&A Moderator, Nordic Mining: And so, Krishna, about the legal issues, has there been any communication with the state, following the verdict, and what are the next, steps?

Fin Marm, Presenter/Company Representative, Nordic Mining: Of course, we’re we’re talking to to the state. We’re talking to our lawyers and and also other stakeholders. The conclusion of this is that as I told the employees at Engibel when I was there, last week, is that I’m not losing any sleep over this. The NGOs have sued the Norwegian government, and Nordic Mining is not a direct party to the lawsuit, we’re therefore not bound by the court’s ruling. It is, incumbent upon the government to do something.

We are waiting their, decision on how to proceed. And in our view, there are two potential outcomes. Either the government will appeal and bring the case before the supreme supreme court, or the state initiates a process for new permits based on the strategic importance of our minerals for Europe. We expect that the state will appeal the case to the supreme court. Should it go the other path, which is a renewed permit, the courts indicated that the rutile from Engieberg is of strategic importance to Europe and could well qualify as an overriding public interest under the EU water directive.

And as such, the courts in their ruling have clearly indicated a path forward for us. We are, as I said in my comments earlier, feeling and experiencing a lot of support from both local, regional, and and central government. And, we saw that at our opening, and we also saw it very strongly manifested in the royal decree from the government back in May where they emphasized the importance of Ennibus production for European titanium supply and also clearly stated that, the importance of there being no doubt about our ability to operate. So in sum, we are quite comfortable with the support and expect that the government will find a good path forward to remedy the situation should the Supreme Court not reverse the ruling from the appeals court.

Q&A Moderator, Nordic Mining: Thank you. In in the recent court case, it says, I understand that the NGOs argued there is an alternative to putting tailings into the fjord. What are the alternatives, and how long would it take and how much might it cost to switch to that kind of approach. I don’t know if Kenneth or

Fin Marm, Presenter/Company Representative, Nordic Mining: Kenneth, that’s all for you.

Q&A Moderator, Nordic Mining: Want to answer that one.

Kenneth Nachen Aingedal, Managing Director of Engieber Plant, Nordic Mining: I can answer. So there has been done a lot of work some time ago as part of the feasibility study to understand what options are available. And a land based tailings deposit was evaluated. But from a security and risk point of view, it was not seen as any good solution. So out of all of that work and continued work in our updated feasibility study, both safety and our environmental solution are the best in the current seed disposal that we are using.

Q&A Moderator, Nordic Mining: Fini, will the second alternative you highlighted imply that you have to stop production waiting for new permits?

Fin Marm, Presenter/Company Representative, Nordic Mining: Not necessarily. A relevant question is whether, what in what situation will we require to stop, production. Of course, we cannot rule this out, but the NGOs could seek and obtain a temporary injunction to halt our operations through courts. My understanding is that they would need to argue that our continued operation would entail irreparable and irreversible damage to the environment. So that’s the first test.

We would clearly challenge that with evidence from the numerous environmental studies that have been conducted. The court would also have to evaluate the proportionality between short term environmental impact of of, continuing and the consequences of halting operations, and that would be the financial and strategic implication of halting, operations. Again, we see that we have a very strong case to argue. But, of course, it is a possibility.

Q&A Moderator, Nordic Mining: I believe we had gone through all the questions. If people out there have any more question, please reach the company by email. Finiva, is there anything else you would like to address?

Fin Marm, Presenter/Company Representative, Nordic Mining: No. I’d just like to thank everyone for for part participating in this second quarter presentation, and we will be back again in about three months with an update on how things are going at Engibra. As you can see, we’re we feel quite confident about what we’re doing, and hopefully, hopefully, we can show that, in in some numbers, when we meet next time. So thanks for participating.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.