GRANGEX: Striking renegotiation of Sydvaranger acquisition setting GRANGEX up for an eventful 2024 - Emergers

With a striking renegotiation of the final purchase agreement for Sydvaranger, reducing the initial payment from USD 1+19m to USD 1+0.5m, GRANGEX succeeds in avoiding both diluting existing shareholders and bringing in equity partners in Grangex Sydvaranger AS, as was the previous plan. Combined with issue proceeds and the finalized USD 17.5m offtake agreement with Anglo American, GRANGEX is now set for the next step where a Scoping Study and Feasibility Study will determine a new mining plan and a new tailings disposal method. With an updated feasibility study for Dannemora expected before summer, and final project financing and investment decision soon thereafter, and new plan for Sydvaranger, we see several triggers in the coming 12-24 months that should drive a revaluation of the depressed share. Our NPVs include a high degree of uncertainty especially for Sydvaranger, but we still find support for a total rNPV-based fair value for today’s equity holders upwards SEK 78 (55) per share.