NunaMinerals A/S under suspension of payments publishes Annual Report 2014

Nuuk, 2015-10-14 19:40 CEST (GLOBE NEWSWIRE) --

• Due to the severe financial situation the Company has entered suspension of payments as of May 2015 while negotiations with new investors regarding a restructure of the company are ongoing to secure the future operation and maintain current licences.
• The normal economic activity of NunaMinerals during 2014 has been affected by the intense work undertaken in obtaining funding for the Company’s operation and its exploration projects. During 2014 work has primarily been carried out on the Company’s two partner projects.
• Due to the severe financial situation of the Company, it has been decided to write down the value of the capitalized exploration costs of 81 mDKK whereupon the booked value at the end of 2014 is 0 mDKK.
• During 2014 the Company has invested 11.0 mDKK in exploration mainly focusing on partner projects, of which 5.3 mDKK was financed by partners and 5.7 mDKK has been activated as an investment.
• Earnings before interest, taxes, depreciation and amortisation (EBITDA) was a loss of 3.1 mDKK compared to a 5.0 mDKK loss in 2013. The result is in accordance with the Company’s previous guidance.
• The result before tax for the period was a loss of 87.0 mDKK, which is in accordance with guidance in the Q3 2014 Interim Report. In 2013 the result was a loss of 60.7 mDKK. The loss is considerably higher than in 2013 due extraordinary write-downs of the intangible assets.
• Capital Position at the end of 2013 amounted to 1 mDKK.
• In 2014 the Company obtained a subordinated loan of 3.5 mDKK from Greenland Holding A/S. An additional loan of 2.5 mDKK was obtained from Greenland Holding A/S secured in the Company building. An additional loan of 4.5 mDKK has been obtained from the Government of Greenland. All the loans were due for payment 31 January 2015.

Significant events after the balance sheet date:

• At an extraordinary general meeting on 29 January 2015 it was decided to reduce the company’s share capital with nominal value DKK 135,195,606 from DKK 137,954,700 to DKK 2,759,094 to cover losses. At the same time the nominal value per share was changed to DKK 0.10 per share or multiple thereof and the number of voting rights is 27,590,940.
• The CEO of the Company has handed in his resignation having effect from the end of January 2016.
• In January 2015 the Company applied for a transfer of the exploration .licence “Taateraat” (2010-39) to its partner Greenland Rare Earth projects Ltd. A transfer is subject to an approval from the Government of Greenland.

Acquisition offer from Greenland Mining Management Ltd (“GMM”)

• The Board of the Company has engaged in negotiations with GMM which is a United Kingdom based company established with the aim of taking over NunaMinerals. Since the suspension of payments as of 15 May 2015, GMM funded the Company’s operations to a value of more than 1.5 mDKK, including covering the costs of Supervisors, the preparation of the annual report 2014 and for the audit hereof. The negotiations are ongoing and no final agreement has been reached yet.
• GMM has received a positive indication from the Government of Greenland which is conditional upon (a) the preparation and agreement on a final proposal; (b) on political approval of its scope and terms; and (v) in its entirety on application to and approval from the Ministry of the Mineral Resources (MMR) on indirect change of control of the Company’s licences and on other licensing matters.
• A completion of the GMM proposal requires that GMM acquires the majority of the Company’s shares and thus control of the Company. This requires support from shareholders in a general meeting to be pursued before the end of November 2015.
• GMM intends to initially provide the Company with 10 mDKK immediately after the general meeting, and to secure additional funding so that the Company’s operating and exploration costs are secured three years ahead.
• Key elements of the proposal by GMM relate to changes in the management of the Company, the resumption of trading of the Company’s shares at the Nasdaq OMX Copenhagen and that the Company is removed from the observation list.
• GMM plans that the restructured Company will be used in connection with acquisitions of mining companies abroad with major mine production as well as companies from other branches. However, it is the intention of GMM that it will remain committed to mining projects in Greenland and these will continue to be a core area of interest for the restructured Company.

GMM refinancing proposal suggests:

• Proposal to reduce the Company’s share capital for the purpose of losses, to be approved by the AGM;
• GMM to fund a total of DKK 10m of new money during a capital increase to own 85% of the total shares after the capital increase;
• Existing NunaMinerals shareholders that were shareholders in the Company before the holding of the AGM to own 15% of the total share capital following the capital increase;
• GMM offers to repay in full all creditors except Bank of Greenland (the loan agreement will remain secured on the Company’s office building), Greenland Holding A/S, KORES, GREP, the management, the board of directors as well as Gorrissen & Federspiel, which will be negotiated payments over a three year period. If it is not possible to negotiate these agreements GM M offers a moratorium in which all creditors, except those with security (Bank of Greenland A/S and Greenland Holding A/S) are expected to be paid over a longer period.
• GMM plans to apply from the Danish FSA for an exemption from the Danish mandatory takeover rules.

Whether the current attempts to save the Company will lead to a final solution is still uncertain. If no solution is found, it will most likely result in the Company having to file for bankruptcy. However it is the opinion of the Board of Directors that it is predominantly likely that the restructuring plan will be implemented.

No events have occurred since the balance sheet date that would materially influence the valuation of the Annual Report.
 

5 years key figures and key ratios

NunaMinerals A/S under suspension of patyments

         Ole Christiansen, CEO, Cell phone +299 55 18 57
         Birks Bovaird, Chairman of the Board, Cell phone +1 416 518 0100