Gruvaktiebolaget Viscaria

Good morning, the clock has struck 10.30 and here we are in Insight Direct. In the morning, it is the gross prospecting company Viscaria that has released its report for the second quarter of 2024. We welcome Jörgen Olsson, the CEO. Welcome.

Thank you, Michael. I apologize for your little mistake. It's supposed to be the gross asset company Viscaria, but it's okay. Our name is brand new since May 22nd and I will comment on this. Thank you again.

How does it feel, initial thoughts, before you start the presentation?

When we finish another intensive quarter, it's extremely intense times for us. We are in the final stages of our salary studies. We have still got environmental protection. We are working on a more powerful condition so that we can start on a full scale. So it's full activity from Monday to Sunday.

It's fun to look forward to hearing more from you. I welcome you to make your presentation. I'll be back later to ask questions.

Thank you, Michael. I have with me today, as usual, our CEO, Frida Kresketalo, who will speak a little later. I'm here today in our Borgkärnefråd, which is full of activity, actually seven days a week. We are working intensively and in the second quarter we have worked even more intensively a little later. We have made a new mission, and therefore we have some new participants with us. Some of them may be listening here today. So just a short repetition. We are a company that will open our copper project in Kiruna, at Skarjagruvan. But we also have two other companies. One in Arvidsar and one in Tvisbo. We have three processing constructions up here in Kiruna, but in total we have three more in the company, two in Arvidsar and one in Tvisbo, if we do 14 research projects in total. Here in Kiruna we have both the details plan via land registration, via land registration and we have environmental research, research and processing consumptions. Some of the conditions are over-complicated, I'll get to that a little later. About 35 full-time employees and we have about 30 full-time employees. We have a lot of consultants, so it's a real project. And we have a fantastic promising company, as many of you know from earlier. We have mostly doubled the resources since we started our project in spring 2020. We have invested a total of 1.5 billion Swedish crowns in the project. Again, Friday will go through all the numbers. It has been an eventful year, not only in Q2, but also in Q1. It was of course over-complicated since May 6th during Q2, when we got our environmental support. Soon we changed our name to the Gruv-sharing company at Skaria. The reason for that was that we thought it was time to change some clothes, if I may say so, from a prosperity company to a Gruv-business. We have achieved our goal. The name of Skaria was easy for us to choose. The company that broke the deal earlier, from 1983 to 1996, was called Skaria AB. The name of Skaria is entrenched with a lot of positive signals in the Q1. It was a very popular workplace. People were proud of Skaria. We have been very proud of it. We have received a lot of positive reactions from the name change. The name of Skaria comes from the flower, Viscaria alpina, which is one of the few plants that can grow on a lot of copper rich soil. So there is a lot of Viscaria alpina growing in our area. A fantastic, fine flower. We are interested in completing the salary study that we will present towards the end of the year, together with a resource update. We drill seven days a week, which is the big activity behind me here in Borstkärna. Seven days a week, daily, and during the first quarter we drill about 10,000 meters, and during the second quarter we drill another 25,000 meters. The absolute lion partner of drilling is so-called gravel planning, or infill drilling, in gravel language. It's to ensure that you get as good and quality gravel as possible. The upstart period is a critical period, during the breaking of new gravel. And the recipe is to invest a lot beforehand, to make a very detailed gravel planning, so that you can get a predictable start. The environmental judgment we received happened in May. It was overruled on 27 May, when the overruling period ended. Three private individuals were overruled. The two Sami villagers, Levas and Gabna, were overruled. The county board was overruled, and we were also overruled. The county board withdrew their overruling a little later, and the Sami villagers, Levas and Gabna, have decided to develop their overruling today, or at the end of the day, at midnight. So we haven't seen their overruling, but they leave blank overruling. We try to keep in touch with all the owners, not just the overruling owners, but all other owners in our area, to keep everyone informed and ensure that we can get a predictable process. And on the basis of that, our goal is still to be able to build a strong condition by the end of this year. In June, we made a successful new investment of 440 million kronor. We got three new institutions at this time, which we are very happy and proud of. Svebank Robur, SEB Stiftsen and Ålandsbanken Fonder. These three institutions, together with the previous institutional investors, Fjärda AP Fonden, Scandia and Handelsbanken Fonder, all invested real sums in this new investment, together with many of our largest shareholders. We are very happy and grateful for this continued investment support that we are maintaining. And we are all... ...stuck in the fact that the world is going towards a global cut in the budget. It is clearly visible already now, but will be even more visible at the beginning of next year. But not least, Europe already has a huge cut in the budget where we import over 50% of all copper that we consume in Europe today. And we need to become more self-sufficient of this important raw material. In connection with the environmental law, which took place in May, we also got a business agreement. And that means that we could take part of our environmental law in the first of August. And we did that with a message. There were no discontent with politicians as we showed, but we have 15 machines in place out in the area. And you will see a little movie about all the activities and business work we do. And all this activity, our good funding, our high energy and commitment makes our plan to open at the end of 2026 and to be able to produce 30,000 tons of copper per year. You have seen this picture earlier. And in the Polka pig line there, inside that is our mine area. And you see that we are completely close to our Järnmamsk neighbor, LKAB. It is up in the picture. And I'm going to show a little more of an understanding of what is happening now after the first of August, what we started with. So we take and enlarge this picture on the Polka pig area. And then you have it here. And then I do another understanding in the slightly muddy picture up to the right. And then we do ground detection so that we can make a material layout. You see it up to the right, because now construction equipment is beginning to come into the area. We make a large parking lot and to the left, the leftmost pillar there, we cover the ground and the wide area for our water cleaning facility, which is the largest investment right now. You will see a little more detail in the film. If we look specifically at the water cleaning facility, which is a very large investment, a 2,800 square meters large water cleaning hall. This is an extension of our pilot water cleaning project or hall that we have had in operation since November 2022 with fantastic results. This hall we start with construction right now and the building, and will finish it during Q3 in 2025. And this has the capacity to pump and also clean 1,000 cubic meters of water per hour. It is a real effort. And with that, I thought we could see a short film cut in one and a half minutes when you can see the intense activities that we have started on 1 August and that continue to run right now. So, here you go and start the film.

This is an incredibly important milestone for us because it makes it possible to get down to the pit and be able to break the ground as early as possible. That we take the situation in line with the land and environmental court's judgment on May 6. And we have done that now on 1 August. And that means that the whole site is a construction site. Work is going on everywhere. Here behind us is one of the sites where we are preparing the ground work for the water treatment facility, which will be finished in about a year. There are about 15 anti-pedal machines. There are dumpers, lawnmowers and wheel loaders. Then we also have two cross-site plants in progress that cross a lot of us. Wheel drives will be drawn, pumps will be installed. We will draw electricity to all different pump levels. This is an incredibly important milestone for us because it makes it possible to get down to the pit and be able to break the ground as early as possible. The next step is that our environmental court wins the power. And when that happens, we can close the entire area and continue with the large infrastructure projects. Build dams and construction sites, as well as our children's care. So that's the next step after this. But this is the first step, the first stage. And it's incredibly good to be on the

move. Thank you very much and welcome back. You can see for yourself the intensity and energy that we are taking on in this situation. And after four years of hard work, partly behind the desk, it feels fantastic to be able to work every day when you see all the activity in the area. It gives you energy and you need to continue to work forward. But with these words, I hand over the floor to our CFO, Frida Kreske. Please, Frida.

Thank you. This is a picture of the time plan for the reopening of Viskaria. And with the activities we started up during the year 2024, but also achieved, we have created conditions to be able to keep the time plan. We intend to start up the really large buildings, not least the construction site, during 2025, but also other parts, such as sand warehouses and so on, to be able to complete that and actually start up the reconstruction and have our first copper concentrate at the end of 2026. And then I will present for the company the financial quarter, quarter two. And here I want to start with a summary and link back to the major events that have been during the previous quarter, but also after the report period, that is, until today. And then there will be repetition here, but we have kept our environmental condition on May 6th this year. We also kept the ground map according to the decision of the court on May 13th. In June, we carried out a successful new mission, a signed one, and then, as Jörgen also said, we took the environmental condition in the first of August through the work order we got, that is, now we have started up this really. And all these events reflect our financial position because we have a strong cash flow and we can keep a high pace in all our preparatory work. If we look at a summary of the quarter report in numbers, it looks like this. If we look at the activated expenses for prospecting and valuation, we have worked out 92 million in the previous quarter and we have 149 million for the first two quarters of the year. We have a moving result of minus 11 million for the quarter and minus 22 for the first half of the year. And the period result goes up to minus 12 for the quarter and minus 24 for the first half of the year. And if we have a negative moving result, it will continue to look like this for a while. It depends on the fact that we have some companies' excessively high posts that are not being led to the examination or concessions, that is, our prospecting work, and are not activated in the balance sheet. If we look at the cash flow of the period, it goes up to 317 million for the quarter and 247 for the first half of the year, 2024. And we have positive cash flows for periods due to the new emissions that were made in June. If we then go over to the balance sheet, we see again our large post, which is prospecting and valuation. It is now at a gross of one billion at the beginning of June this year, compared to the same period last year, 776 million. This means that we have activated the last 12 months an additional 270 million. We have sent a post of 55 million regarding the ongoing new facilities. And here it is only ongoing investments that are primarily within infrastructure for both electricity and construction. It is also parts of the permanent water supply and it is also parts of the kindergarten that we intend to build, which will be completed by 2026. If we look at the same amount, it goes up to 514 million per last June and the own capital goes up to a gross of 1.6 billion. And the difference, on the other hand, in the previous year is the new emissions in general. If we go back to prospecting and valuation, which I have mentioned, is our single largest post, we have a little more details about this post. Here we show the fallout quarterly from 2021 to the second quarter of this year. And here we see, then, just as planned, this successive rise in the highest quarter, with 92 million activated revenues for the previous quarter. And what do these posts consist of? Well, here the absolute largest post is linked to geology. We have spent a lot of time, resources, and invested in drilling, carding and analysis afterwards. In the main thing we drill what we call the deep-rooted drilling, that is, work for the FS, our comprehensive study. But we also do a part of the prospecting drilling. Apart from geology, we have, of course, the preparatory work within all other areas of operations. And here it is about the deep-rooted drilling, that is, analysis and process tests for the upcoming construction. We have the preparatory work within both infrastructure and logistics. We have an increase linked to project administration, such as work environment, security routines, purchase processes and so on, and not least within the environmental side with our access processes. And all of this is focused on reaching a goal with our final FS in December this year. And so I hand over the floor to Jörgen.

Thank you so much, Frida. Uh, finally, we're going. It seems the ''Verkst steal's 비rodanna'' have made everything possible to get on with our project. We're going full force this January 1, and our dialogue continues with theTA ones in the review process with the aim of preserving a low budget both at the end of the year. We continued to deliver exciting work that you heard from the previous quarterly report about GranVis Maria, which is the potential in all our mixing resources. The construction companies that cover the area that is now under construction are only 2% of our entire research in such areas which have very exciting conditions for continuing to expand the copper resource. We are incredibly happy and proud of the continued financial support that we get from new institutional owners and also from existing institutional and large shareholders. In summary, we continue with our plan to reopen at Skareguban and produce our first copper concentrate by the end of 2026. With this, Mikael, I leave the floor back to you and the studio.

Thank you so much, Jörgen. I will start with what you presented in the last quarter report, which is the environmental situation. You expected it to be over-complicated, so it has been done. Last day of response, at least for the blank, blank over-complaints today. But I guess your over-complaint is not blank. What does it mean?

It is posted today on our Tillspotens portal. Just as the name suggests, we are in a council meeting. A council meeting is a meeting between different parties. It also means a given and a taken. You can read that quite clearly in the council meeting. The council meeting is on 326 pages. It is an extensive package of conditions where we have to show consideration to all types of shareholders. It is not just about the Sami villages, it is about the municipality residents, the municipality, the county board, the nature conservation authorities, environmental entities. It is a given and taken. When the court is over-complicated, we have received a lot of things, but we have also received a lot of things in this package of conditions. When a court is over-complicated, it is up to the rules of the game to make it clear, then we go back to all the things we actually want from the very beginning, to bring it back to the table. Of course, we hope that we, together with other things, will agree that this will not go on to the next instance. Alternatively, the environmental authority will not give us or any other shareholder a trial. We go back to our starting position, because that is the rule of the game in such a case.

How do you expect the result from your own complaint will play out?

We believe much more in the verdict that came out on May 6th, with the conditions to our advantage and our disadvantage. We thought it was a good verdict and we are ready to live with it. But if it is going to be a trial for a new negotiation between the environment and the chair, then we have to go back to where we started. You can't just give a lot, and then you have to give more and more. These are rules of the game.

If I go on and talk about the new emission that you have been able to do during the quarter, it is about 440 million crowns. This new emission was aimed at. What I am interested in is that when you now have environmental conditions and the clear plan to reopen the quarter in 2026, how did the interest of investors compare, small as big, but also old as new in the shareholder book?

There was a pretty big difference this time after our environmental condition, so much bigger interest and a very short and fast process. It has been challenging to get an institutional interest, because there is too much risk. Is it possible to get a growth rate? We are very clear about the entrance of the Ola Bank Fund and their interest. We have not met these institutions yet with the emission. It is the managers and institutions that have followed us for a while, but who are waiting for certain trigger points. The emission was very high. We had a mandate from the board of directors to sign for 20% of the outstanding shares. There was a much greater interest in the emission, which we wrote about in our press release.

How will these 440 million crowns be distributed? Is there a detailed plan?

We are working with detailed plans. It is about ensuring what we need to do and when and how we should prioritize to manage our resources in the best possible way. What we can say is highly prioritized right now is our permanent water cleaning. It is critical to start the emptying of the pit in time and the further work thereafter.

I am thinking about the risks of the construction of the waterworks, but also the future. You are doing this under the ongoing review and without a final budget study. Can you explain how you are thinking about

this? Absolutely. The big project funding will require a more efficient budget. We have reached a goal with our review. It is important to keep the project going as fast as possible. There are also big risks in a project if it takes too long. What we are doing is to make sure that we have the necessary conditions. For example, with the new emissions, we have a supply in the box. How do we manage the resources in the best way and put plans forward? As we said earlier, the water cleaning is highly prioritized. It has a very big impact on the entire project plan. Therefore, we choose to start it up as quickly as possible.

How much will the ongoing construction planning cost?

We have today a estimated initial cap of 4.5 to 5 billion. For the entire package. It is water cleaning, it is refining, it is restoration in the pit and all other infrastructure and logistics.

Will you then count on further funding until you can reopen Viskalia?

We have a plan for funding, but everything is dependent on other conditions, not least the low-cost conditions. As I said earlier, we are working with liquidity plans and are putting the plan forward, not least at the starting point of existing resources.

If I ask about the salary study, Jörgen, you mentioned earlier that the current salary is in the so-called end phase. What is left to do in it?

There is a lot of validation. For those who are involved in the prospecting and mining development industry, you know that you have almost no way of failing with a salary study. Unfortunately, there are too many examples of so-called junior mining companies that release salary studies in too early stages. They do not keep the standards on the pure Swedish. If it does not get better, there will be great challenges. The banks will themselves apply external validation experts to see if this salary study is done in a more efficient way. We use one of the world's largest mining consult firms, SRK, which the market knows about in this work. But loan financing banks and credit guarantee institute will validate it. We are in a final validation phase and it takes time. The salary study involves validation of the right process technology, right quality equipment, right logistics solutions, right reference documents, relevant assessments of the detailed engineering plans. It is a comprehensive study.

Even if it is not validated by external partners, I wonder if it contains enough information for you to plan around it today.

We are very confident with the status of our salary study and that is why we dare to go out and do these new missions. Since it is a risk if you go out and do new missions without a foot on the ground, we are very, very confident with our salary study. We have been doing this for a long time.

What is there to do in the employment processes towards the end of 2024?

In the employment processes we are having an active dialogue with different business owners. Of course, an active dialogue with the court as well to hear what more we can do. The court has absolutely no interest in the negotiations either. We have a good legal system in Sweden, a good environmental legal system. Many think it takes time, but you have to be careful with one thing. It should be reasonable to open a pit. You get the condition that for many years you break into nature, do groundwater reclamation, affect flora and fauna. It is an incredibly responsible project. It should be reasonable. It should take some time. Otherwise, you have to deal with something else if you are not prepared for that. But we have an active dialogue with everyone. Just as we are doing in our environmental negotiations in Markum Lederhustlen, this is a project that should be able to work in collaboration, in coexistence with other business owners around. So, community residents, the municipality, tourists, leisure activities, but also the Sami community and the arena owners. So, there is a lot of dialogue.

Jörgen, that was all of my questions. But of course, I will also turn to the chat because a viewer question has come in and it asks the following question. How can you transport on Malmbanan when there is a traffic jam on the track and LKAB believes that they need time for driving?

There is no shortage of time on Malmbanan and this dialogue is quite complex. Freed here comes directly from the company LKAB Malmtrafik and our infrastructure and logistics manager Thomas Noma comes directly from LKAB's infrastructure and logistics unit. So, we want to mean that we are very thoughtful and have good information and expertise about the situation on Malmbanan. That the maintenance on Malmbanan needs to be improved, I think we all agree on that. We will transport one train a week. LKAB has as many as 15 train stations reserved per day. And then they use significantly less just in the current situation. They have a number of other different challenges. But there is room on Malmbanan today with our traffic.

So, it is important to keep a good relationship with your neighbours.

Absolutely, very important. And it is a self-evident.

Jörgen Olsson, CEO of Freedia Cascitalo, financial manager, thank you so much for being here and presenting and of course also answering our questions.

Thank you very much and we look forward to seeing you next quarter.

So, we also want to thank our viewers for being here and listening.