Grangex: Updated DFS confirming viability to produce high-grade iron ore at Dannemora - Emergers

The announcement of the updated DFS for Dannemora showed, as expected, higher CAPEX and OPEX compared to the FS announced in December 2022, as a result of the general price increases seen in the past two years. Combined with the higher Iron Ore price, this meant only a slight adjustment of the Post-tax NPV (8%) from USD 205m in December 2022 to USD 200m now, thus confirming Dannemora's technical and economic viability to be a producer of high-grade magnetite concentrate. In our model however, we find it reasonable to account for a price premium from 65% up to 68%, which supports a Post-tax NPV of USD 247m. With a final project financing and investment decision as the next step, and a new plan for Sydvaranger, we see several triggers in the coming 12-24 months that should drive a revaluation of the share. Our NPVs include a high degree of uncertainty especially for Sydvaranger, but we now find support for a total rNPV-based fair value for today’s equity holders of SEK 73 (78) per share.