Gruvaktiebolaget Viscaria

Welcome to this report presentation with the mining company Viscaria, which released a report for the third quarter of 2024. CEO Jörgen Olsson and financial manager Frida Kesketalo will take us through the results and activities for the quarter, followed by a Q&A session where you who are watching can ask questions in the chat. With that said, over to today's main person, CEO Jörgen Olsson. Hello Kiruna and hello Jörgen.

Hello everyone and thank you so much for listening to us today.

It's great to have you back again. A lot is happening. Jörgen, before you introduce yourself, could you briefly give us your impression of the quarter?

Again, an incredibly eventful quarter. It's hard to mention some individual things, but let's mention that we were able to take our claim on August 1st and more on that during the report. But then not least this. our fantastic, successful prospecting bonings. We present the results on 24 September and it continues to be as successful and even more successful This is one of our new zones, the Abba Zone. I don't know if you can see it on TV, but it actually glitters with copper here. So it's incredibly fun, and more about that too. But also fun, of course, during the period, that we could write a collaboration agreement with the largest Sami village, Levas Sami village, so that we can show that we can cooperate and operate in coexistence with our businesses. Very fun. So it will be a content-rich presentation today.

Thank you so much, Jörgen. And without further ado, I just want to say that the Borgkärna was the most beautiful thing I've seen since I was born. But with that, Jörgen, please present the report.

Thank you so much, and a warm welcome again to the third quarter's report for Scania 2024. As I mentioned earlier, a lot of things have happened during the quarter. That is why I would like to take the opportunity to present some of my colleagues. Thomas Nordmark, our infrastructure and logistics manager, will present all the activities that are going on in the area now, after we took our status as a property management authority in application on August 1st. But regarding the prospecting surveys, of course, our geology chief, Karin Lindgren, will tell you more about them. And it's not just today's presentation. Karin will tell you that now it will be put on hold and we will continue to present prospecting results. And towards the end, Frida will take us through the figures as well. And then Frida and I will be available for a question and answer afterwards. Once again, it's a very active quarter for us. We received a commission in connection with our court on the 6th of May, but we couldn't apply for it on the 1st of August. And that's because of the so-called bird directive. As long as birds and animals, hedgehogs in trees and forest and nature, are not allowed to roost there. And it was released last July, so on August 1st we could be in full speed. But at 5 o'clock in the morning on August 1st, as many of us have seen already on social media that we put out, we started with 15 entrepreneurial machines and initially two crossers. Now we have three mobile crossers in the area and a lot of activity. We will return to that. We are working in very high speed to be able to present our sustainability study towards the end of the year, or the so-called feasibility study. And in connection with that, we will also present a resource update and also Vizcaya's first reserve. It is so that our resource, which is 93 million tons today, so far, when you do the sustainability study, the feasibility study, then a part of the 93 million tons will become a reserve. What is initially economically mindable, producable. And this is the first time, and there are much higher requirements when you specify what your initial reserve is compared to the resource. The resource also has to follow a reporting protocol, but this is the first time in the history of viscari that we specify a reserve. Very exciting. And we will also, in connection with this, i.e. in connection with the fact that we are presenting the study, the resource update and our reserves, have a larger geology presentation sometime in December. The date is not yet fixed, we will return to that. But all this combined, and not least one event that happened after the reporting period, namely here this week, when the Mark and Environment Commission reported that they did not want Thank you very much. be able to produce our first copper by the end of 2026. So very exciting. But with this, for the first time for you viewers, I invite our infrastructure and logistics director Thomas Nordmark up on stage and tell us a little. Thomas, please.

Thank you so much, Jörgen. Yes, as I said, my name is Thomas Nordmark and I am responsible for infrastructure and logistics here at Viskaria. A little about me. I'm Kiruna Bo. I have three adults and three children. I worked in the industry for 38 years. I started at ABB. I went out into the world and built some steelworks and some power plants. I came back to Kiruna in 1993. I worked at LKAB when LKAB took over manned transport and energy. I was involved in developing them to become Europe's most efficient transport. with among other things the world's strongest electric locomotive, the highest axle load, and more. I was LKAB's railway specialist for the last years. I stayed there for 21 years. Then County Siren started to help with getting their manned transports going. I helped them for three years until Jörgen heard about it and said, Thomas, can't you help start up Viskaria? And that was too much fun to say no to. Anyway, when you are going to To start a new mine or restart it, it's always good to have a plan, a vision of how you want it to look. It's important now that it should be attractive to work in a mining industry. We should be afraid of our environment and all that. We took the help of an architect's office to come up with a concept that we are trying to follow. And the keywords that you see in the picture are a combined palette of autumn colors and preserving the natural environment as far as possible. And a little inspiration from the flowers that you see in the middle of the picture, Viscari, Alpina, Neilika. Then we have In the beginning, as Jörgen said, on August 1st, we had to wait with all the machines. And we have this stage here that we called site stage 1. That is to say that we try to do so much in order to be able to empty the pit and clean the water before it shoots the recipient. And that is according to the factory regulations that we have. And these turquoise colors in the picture here show our industrial area here. If we start with what is a little in the middle of the picture, where it says WTP 1000, it stands for Water Treatment Plant 1000 cubic meters per hour. And then we have just started to build, yes, we have done the land work for that of course, and we start that directly on August 1st. But it is a pretty impressive building. It is 40 meters wide and 80 meters long. It contains a whole lot of process equipment. And here we have had the help of, or here we cooperate with a Finnish water cleaning company that is very good at cleaning just tap water. And it will take until next fall, it will be in operation. And as a little extra feature here, the part that is to the left in the picture, the square there, there we will produce our own drinking water. Before the water comes to the water treatment facility, we need to drill Both down to the existing ditches that are here in the A-zone. And here you can see the preparatory work that we have done here. Digging out slabs, setting up a tent, pulling in electricity. And the picture on the far right, where the electricity is, there it is now. About a week ago. a drill that will drill four holes 300 meters straight down there, where we will then lower the pumps to empty the mine. It will be exciting and the emptying of the mine will take about a year and a half. Let's move on to the next turquoise picture, the next one, but it's a little down to the left here, lay down area. What can that be? It's a 9,000 square meter large surface area. Here we will receive our building materials, all that will come with trucks, transport and so on, to be able to build the water cleaning facility, the water treatment plant and all other installations. Then Karin started. We have both prospected a whole lot, I think it was 60,000. meter just this year. And all these peat kernels must be stored somewhere. And then we put up this tent here that we had an enclosure here last week. If we go on to what we call Vizcaria Village, it is right next to our project office where we all sit, who are now working at Vizcaria. This is where our entrepreneurs should work. where they have to change, shower, have offices, meeting rooms and even overnights. And here we have also thought about trying to avoid such social problems as it can be with such larger establishments. So it's a bit of a feeling of the city where you see each other. You have an indoor garden where you can meet and have a meaningful leisure time with a ballpark. Stool stairs, grill places, yes, a bit of everything. So I think that will be a winning concept as well, because we will be an attractive partner to work with. If we go up to the turquoise area called Parking and Crusher, up here in the picture, as Jörgen said, we have We have taken the old Groberg's construction materials for production, construction materials for roads, buildings, plans and buildings. As you can see in the picture, we have taken a large part of this, so we have produced about 120,000 tons of building materials already. In the picture on the right, you can see the large parking lot that we need to have to be able to receive trucks, private cars to park there so that we don't get so much traffic into the area. And with a nice view over our friend LKAB on the other side. Electricity. Electricity is a very important part within the infrastructure so that we can be able to reopen Viskaria. And in this picture you can see that there are two 130 kV lines that go straight through our area. And here we have, together with Vattenfall, electricity distribution. planned, signed an agreement and have a consensus on how we are going to take down the power, distribute it and out to all consumers, irrigation plants, wells, pump stations, all kinds of things according to a one-line scheme at the bottom. And on the right you can see a little sketch of how these transformers will look. And there we have already ordered one of these transformers because it is so long. There is a time limit of 28 months, but we have ensured that we will get it in the spring of 2026. Then we come to the heart of logistics. How are we going to get our products, our copper concentrates and our nuclear magnetic concentrates out? And here we have worked together with the traffic agency. And the traffic agency is responsible for installing, shifting connections to the manned track here. One in the south, one in the north, so that we can choose if we should drive south down to Skellefteham, Smältverket there, north to Norvik and out to Europe there. And here I would like to show a short film that illustrates what it is supposed to look like. The direction here is that we come from the south, from Luleå. We have the LKAB area to the right. We have our area to the left with the old sand warehouse. Here we fly over our magnetic train, that is, magnetic with a bow in front of it. And in here at the loading hall, as you can see here, our copper train is standing here with the covered copper wagons waiting to be loaded. And that's about 30 to 34 wagons in these trains that we have designed. The red building above the cargo hall is here, where the copper concentrate and the iron man's concentrate comes out of the water and goes down to our warehouse. And here you can also see that we can also receive implements, added materials and so on via rail as well. And this is the same type of wagons, these man-wagons here for the iron ore concentrate that Kaunis Iron uses and that is produced locally here in Kiruna. So when we film out here, I just want to briefly summarize that I think we have had a lot since we started on August 1st. And we are also ready, as I want to show here, that as soon as we get a load of power under control, Då kör vi. Jag är helt övertygad om att vi kommer att hålla våran tidplan med start under 2026. Med de orden så lämnar jag över till Karin. Varsågod.

Tack Tomas. Ja, det känns väldigt roligt att få stå här i Borgeskärnarkivet idag och få fortsätta presentera fantastiska prospekteringsresultat. Jag har mitt geologtid här med mig idag och de har jobbat oerhört hårt för att fortsätta följa upp de här resultaten som vi presenterade första gången i september i år. Idag kommer jag dels repetera lite grann de här senaste resultaten också berätta kring vad som har hänt since then and a little bit about the plans for the future. The joy is, as I said, that we can continue to confirm that we have a fantastic facility in Viscaria. We have nice meetings both in the D-zone and in the newly founded Abba-zone. And just today we have full speed with Pre-Diamant And just as Jörgen mentioned, we will also present the latest prospecting results in December this year. But what was it then that we presented and where are we now? We could then see from the latest results that Viscaria not only continues towards the depth, but also shows higher halts towards the depth. And since then, we have managed to continue to drill in that zone and we see that these results show the same again, that we have both a very thick mineralization and it tends to increase Vi har också följt upp ABBA-zonen, den här nya fyndigheten som ligger mellan A-zonen och B-zonen. Även där har vi kunnat följa upp ABBA-zonens laterala utbredning. Vi kunde också annonsera en väldigt tjockt paket om mineralisering på djupet, vilket vi misstänker kan vara en sammansmältning av alla tre zonerna på djupet. Där väntar vi med spänning på de senaste analysresultaten som kommer in här. And we have also followed up the results in terms of gold and silver. I was going to show a picture, a cross-section of Viscaria's mineralization, and here we see models of Viscaria, where we have the A-zone to the right in the picture, the B-zone in the middle and the D-zone to the left. We also see here in Viscaria. We have been drilling a lot this year, and the largest part of the drilling has been infill drilling, in order to ensure a safe start to the mine. In this picture, we can only see the latest prospecting drilling, which is also very expressive. De beigea förlängningarna är liksom beskrivning av förlängning av både D-zonen och B-zonen som vi har kunnat bekräfta. Och vi ser också den här ABBA-zonen som ligger väldigt nära infrastrukturen som finns i A-zonen. Det ligger alltså ungefär 200 meter under A-zonens infrastruktur, vilket är en väldigt positiv del för kommande gruvbrytning. Ja. In September we have continued to drill and we can confirm that the deep drilling of the zone also shows very thick mineralization with high halters. Today we will not present analysis results, but it will come in December this year. The focus has also been on the ABBA zone, where we can see how the ABBA zone extends laterally. When we have done so much digging, a lot of interesting thoughts open up about how this find could have occurred. What is it that makes it possible to have such a fantastic find in Viscaria? As a lot of new geological information, we have made a schematic picture of how we think that this find has actually come into place. And we see, as I said, that it's the same type of cross-section we're looking at here. We have the A-zone to the right, the ABBA-zone, and then the D-zone to the left. And we see that we have entered a very well-preserved, competent mountain where the D-zone shows very nice hits. We also encounter other types of mountain species in the depths. And this malleable encounter we had on the deep, where we think that the find can actually be connected to the deep, we want to illustrate in this way. And we also see from our latest geophysical studies that there is a trend with magnetic anomalies towards the deep. Really exciting. And what is the next step? We will continue full speed forward, increase our drilling capacity to five rigs. We plan to drill about 30,000 meters at the end of this year and start next year. We have also secured our drilling capacity that we have really powerful drilling rigs that reach down to 2,000 meters deep. And there will still be focus mainly on ABBA and the D-zone. Men vi vill också fortsätta vara väldigt kreativa så vi kommer komplettera våra borrningar med fysiska undersökningar för att förstå hur det här hänger ihop. Och vi ser väl mycket fram emot att få presentera de här senaste resultaten i uppdateringen här i december i år i samband med vår lönsamhetsstudie. Och med det skulle jag tacka för mig och lämna över till Frida. Mycket Karin.

Yes, this picture is our timetable for reopening the Viskaria mine. We see that we succeeded in 2024, i.e. that we kept the environmental conditions in line with the operation regulations. The complainant of environmental conditions did not receive a test condition. our infrastructure work towards the demolition of the underground mine next year. This creates conditions so that by 2025 we can continue with other facilities and buildings according to the plan, so that by the end of 2026 we reach our goal of having a first copper concentrate from our own facility. So this time plan remains, it is fixed. I will present the financial situation for the third quarter. To summarize the report and the quarter as a whole, it is characterized by these positive messages. We have taken the environmental condition into account through the project management. Our financial reports also show that we have deducted the first part of the post-treatment plan, correspondingly 60 million SEK, on a total post-treatment plan of 344 million SEK, and all this according to the environmental judge. During the quarter, we also entered into a cooperation agreement with Levas Samerby. we have followed up on. And we have also been informed by the Ministry of Land and Environment, as late as this week, that the testing status will not be given, which we are incredibly happy about. And all these events in themselves are important and make us get closer and closer to a real production start, which will give us a profitable production for many years to come. If we go into a little detail on financial Då har vi aktiverade utgifter för prospekterings- och utvärderingstillgångar på 104 miljoner för kvartalet. Och för hela perioden, i januari till och med september, uppgår den till 253 miljoner. Vi ser då att den är något högre än föregående år, och det är också precis enligt våran plan att vi har en högre kostnadskostym när vi är så pass nära uppstad. Tittar vi på rörelseresultaten, And if we look at the period's result, it's a little better than the movement's result. It goes up to minus 6 million per quarter and minus 29 million for the whole period. And why the period's result is better than the movement's result is because we have a positive financial net. If we look at the period's cash flow, it goes up to minus 129 million per quarter. We have had a lot of And if we look at the whole period, we have a positive cash flow of 118 million. And why is it positive? It is mainly because of the new emission that took place in June, If we go over to the balance sheets, then we have again this sheet, prospecting and evaluation opportunities, and it now amounts to approximately 1.2 billion, compared to 836 million last year. And that means that since September last year, we have added another 377 million to the sheet. And in these figures, there is also the deduction I mentioned earlier, of 60 million, i.e. the first part of our post-treatment plan. We also have a post-opening new building that will go up to 73 million. And here it is mainly these early infrastructure investments that are here within the permanent water cleaning, but also electricity and preparations for kindergarten work, as Thomas has mentioned. If we take a closer look at our big post, prospecting and valuations, how active expenses look, basis from 2021 until today. And then we see that we have moved from a situation where we, during 2021, had activated expenses on a yearly basis of about 100 million to have gone to the situation we are in now, 2024, where we for the first three quarters have activated expenses corresponding to about 250 million. If we take a closer look at 2024, we see that it is the mining, analysis and additional costs that make up more than half of the year's active expenses. This work is being done both for the upcoming mining start, but also in preparation for the completion of as high a quality FF as possible. We have, of course, a lot of preparatory work in all other areas of the business, which also generates a lot in these figures. Also mine planning takes a lot of preparatory work to be able to do and lay as optimized a mine plan as possible before the start. We also work with process tests and different types of analysis towards the enrichment side in order to prepare and be able to build as good an enrichment plant as possible. Then again, we have infrastructure and site preparations, as Thomas has shown earlier. And there are also posts in the pre-projecting for the kindergarten building here. All these parts are according to plan, what we need to do to reach and be able to complete our FF, our profitability study at the end of this year. And after that, to be able to move on to the construction phases in a good way. And with that, I'll hand it over to Jörgen again.

Thank you so much, Frida. And so, in summary, again, a fantastic, intense quarter. We continue our preparation work in full swing. Vi har en enormt spännande tid framöver här, där ni kommer få regelbundna rapporter och återkopplingar på inte bara projektet, men inte minst de här fantastiska, spännande prospektutmaningarna. Även om jag fick beröm innan, så hörde jag också att man inte såg allting så tydligt på våra fina borrkärnor, så då kan man göra så här att man kan fukta lite på det här, så ska ni se vad som händer, att man ser det. even more clear and beautiful and this is so high degree of copper and what you heard Karin say here we can make visual judgments here but we want to be transparent and serious and stable according to the market so Karin said that we are waiting for the analysis results of these pears and go to the laboratory where you cut the pears exactly in half to a fine powder and then you do a complete chemical analysis. We don't know exactly what copper contains. We also know what other substances are contained there and to what size. An exciting autumn and we look forward to doing this geological presentation in connection with the sustainability study in December. Very exciting. But with that, over to the studio and for questions.

Thank you very much, Jörgen, Thomas, Karin and Frida. It's very interesting to have this broader presentation. I'll start by asking a question about these infrastructure investments. There's a lot to be done and it takes some time, but cost-wise, when it comes to energy, electricity, power, railways and water cleaning, You need to spend a lot of money on this, but do you get anyone to share the investment?

No, you could say that. We haven't held any subsidies yet, and we don't expect to hold any bigger subsidies in the future, even if we hold a strategic raw material, namely copper. It is defined as a strategic raw material in the EU. But this is not an innovative new business. It's both boring and fun. Fun in the sense that it's very predictable. It's a traditional mine that's going to be opened, a traditional copper mine. We're screaming for copper in Värmland, but there's nothing new. We're going to pay for all this ourselves through our shareholders and banks who lend us money. But it's a good product that has a good pricing on the market and has a lot of positive price performance in the future.

Thank you. We are still in the economy and you are working on this profitability study. I have a question. With these new findings, will this profitability study be delayed or will you keep the planned deadline?

No, but we will do our profitability study with the old results, if I may say so. It is so that the results that are included in the profitability study, they are only until the last of July this year. Because it takes so long process them according to the reporting requirements that exist. It should go into block modeling in geology, it should go into block modeling in the mine, chemical analysis results should be confirmed, it should go to independent financial calculations. So all new crop results will be presented as a separate resource story. But it is as exciting as it is. And we will of course link it with the feasibility study and show how long it takes before we can break our new vulnerabilities and how it can be connected to the old plan. But it will not delay the solution study.

Thank you, it will be an interesting continuation of that in the future. When you do such a profitability study, how have you calculated the development of the copper price?

No, but so far we are with the 9,000 dollars per tonne that we have calculated. We have today, despite an worrying value, a copper price of 9,500 dollars per tonne. And it is actually the case that the future outlook points towards a higher copper price. We are now discussing internally which copper will be used in the sustainability study. We will get back to that in December.

It is one of the mega-trends, or several of the mega-trends. It is the transition from fossil fuels and electrification as part of it. So it could be an interesting development. I have also received some questions regarding the financial. How does it look regarding financing? As an owner, can you expect targeted emissions or will you be more or stronger financial partners than those perhaps smaller actors who are shareholders today?

Now we have very large, strong financial partners, to be honest. We have six large Swedish institutions and we have in our top 20 list a lot of large, strong family offices and private individuals. that are financially strong. But we are working hard with both our own capital side and also the loan side and are in the starting block for all of them. We are still waiting for the law to be strong. But it is of course so that a large emission will be a preceding emission, which is equal rights for all existing shareholders. And those processes are in full swing. And the trigger is the legalized state of power. And in parallel with that, we carry out negotiations regarding loan financing.

When it comes to loan financing, are there banks or are you also looking at bonds and that type of alternative?

We actually look broadly, but there is a lot of banking discussions. Thank you.

And this high-end copper that you have found in these expanded mines, could you develop it? What does this mean in the long run for you?

In December, we will develop more details. It would not be very serious of me to tell you about it today. But we have used a rubricization both in the press release from September 24 and also in today's quarter's report. The press release in September 2024 is reported according to PIRC 2021. We use the word as exceptional results with more. We have visual copper degrees that are largely in double the degree of halting compared to what we have in the existing zones. This is just as I write in the VD word in today's quarter report. This is the start of a whole new era in the history of Viscaria.

This is huge. You also mentioned in the report a Tier 1 mine. Could you describe how you define Tier 1 here?

It is important to see it as a future. And we will define it a little more in December. The hits that we have now indicate much larger types of orders than Karin visually could show on the market today. It's a completely different character, completely different degrees. And we also say that this is one of the fastest growing copper currencies. And that's why the results from last autumn have given us a crutch in the back to now do a very focused prospecting campaign. We have never sowed so much prospecting spawning in these four and a half years, because we have been focused on having this predictable mining opening. But it's just that we have an enormously exciting time ahead of us to see how these resources will grow. And that's why we have dared to take these words and put them down on the fence.

Thank you. I understand that this report was very exciting when it came to your status. Could you tell us a little bit about the process and the Raw Materials Act that was carried out in the EU, where Sweden was the leading country? Have you noticed any difference because of that?

Yes, we think so. But it's very difficult to decide what the chicken and the egg is. And what do I mean by that? Yes, of course, what is it that has made us have such a relatively quick process? Is it because we have a brownfield project? I mean, there has been a mine there before. Is it because we, as we ourselves think, have been very, very serious? We put down 120 million kronor on our permit application that we sent in March 2022. Or is it a combination of all these factors, including the Critical Environmental Act, that makes the process go a little faster? It is difficult to determine exactly what it is, but we can note a few things. We submitted the environmental status application in March 2022. We got the status on May 6, 2024, that is, almost two years later. It is very fast from a historical perspective in Sweden. The accusation after the May 6th trial, the developed accusation on the largest counterpart, was released as late as August 15th. And less than three months later, the Markum Ljö Overdomstolen, this accusation, was revealed. It must also be considered, I think, a record in the Swedish crude industry on the state of affairs side. But I also deserve to point out that the welfare side is a complex process. You have a detailed plan from the municipality, you have a land permit from the county council, you have reworking construction from the state of Bergen, you have a land permit from the state of Bergen, you have an investigation from the state of Bergen, you have environmental status from the environmental department, different authorities, complex processes. We think this has gone relatively well. It should have been difficult to open the pit.

How confident are you that you will get the cleaning work in place and will be able to start in 2026 with the pit itself?

I'm of course jealous when I talk about my organization, but I hope that you have, of course, a little when you see here today, I'm blessed to have a group of fantastic professionals who are enormously motivated and very routine around us. We are more than 35 full-time sellers and have about 30 full-time, more or less full-time, engaged consultants. All of them are full-blown professionals in this industry. It is almost as if I am sitting as a hiatus leader on the days. Everyone is incredibly motivated. It is almost difficult to take in how much has happened in our area since Thank you very much.

Tack också till er som har tittat. Ni ser oss igen om tre månader.