Nordic Mines AB (NOMI) rose in Stockholm after the company found a record amount of gold in a single month in November and the new chief executive officer said money from a planned share sale is key to future production.
Nordic Mines rose as much as 48 percent, the biggest intra- day jump since July 4, and was up 27 percent at 3.6 kronor as of 10:36 a.m. in the Swedish capital. That pared the stock’s decline this year to 93 percent, valuing the Uppsala, Sweden- based company at 309 million kronor ($46.2 million.)
Nordic Mines said today its Laiva Finland mine produced 120 kilograms (264 pounds) of gold in November, and that operational availability improved to 92 percent. Nordic Mines, which began partial mining in 2011 and full production in February, will hold an extra shareholders meeting on Dec. 20 to approve a rights issue to raise 282 million kronor before costs. The funds are key to the company’s future, CEO Thomas Cederborg said.
“It’s the highest amount since we started,” Cederborg, who took the helm at company last month, said about the gold find in a telephone interview. “We’ve had a difficult start, it took longer than we thought to ramp up production.”
Proceeds from the share sale will be used mainly to strengthen production at the mine, pay suppliers, and provide the company with a cash buffer “so we don’t run out of money again,” Cederborg said.
“We need these resources, it’s very important,” the CEO said. “The new management team is very focused on accomplishing this action plan, to strengthen the robustness of the operation so we can repeat this availability month after month.”
The funds should allow loss-making Nordic Mines to achieve long-term profitability, it has said. Cederborg declined to forecast when that may be, or how much gold the company may produce next year.
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