Nordic Mining acquires Finnish lithium project

Nordic Mining acquires 68% of Keliber Oy and confirms its strategy of
exploration and production of high-end minerals and metals. Keliber
has plans and permits for exploration and production of lithium
carbonate in Finland.

Keliber will be the first European producer of lithium carbonate,
scheduled to start production in 2010. One of the main applications
for lithium carbonate is for production of batteries to mobile phones,
laptops, electric vehicles, portable tools a.o. The increasing demand
for electric and hybrid cars is boosting production of lithium ion
batteries, indicating a positive forecast for lithium carbonate.

Keliber's production plant in Finland is expected to be cost
competetive with current production of lithium carbonate and has a
'green' profile with regard to both the process itself and the final
product.

'The realisation of the lithium project will give opportunities of
strategic and industrial importance for Nordic Mining', says Ivar S.
Fossum, CEO. Lithium is a mineral with advanced forward-looking
applications and is in particular attractive as a component in the new
generation of batteries. The shareholders of Keliber have build a
solid platform for further development in their preparations for the
first European production plant for lithium carbonate.'
Keliber's lithium project

Keliber Oy has mining concessions, permits and approved plans for
exploration of lithium minerals in Kaustinen in the Osterbotten region
in Finland.

In addition to mining concessions, the plans also includes a new
process plant for production of lithium carbonate. (Li2CO3).

Total investments are estimated to EUR 40 – 45 million. Keliber has
carried out project development for several years and the company is
ready to enter into contracts for civil work, construction and
erection once financing has been established. Nordic Mining will play
a key role in the financing of the project and will commence
preparations for this in the first half of 2008.

Production is scheduled to commence in 2010. Production will initially
be based on a resource of spodumene ore of approximately 3 million
tons with a grade of 0.92% lithium oxide. The spodumene ore also
contains economical grades of tantalumpentoxide and quartz-feldspar.
The planned production from this resource represent a sales value of
approximately USD 250 million at current market prices for lithium
carbonate. In addition, Keliber has exploration licences for two
spodumene deposits which at a later stage might be processed in the
same plant.
Increasing demand for lithium

Lithium has many industrial application areas and there are several
derivaties based on lithium, i.a. lithium carbonate. Lithium carbonate
is used for instance in the glass and ceramic industries, for
production of lubricants and in pharmaceutical products as well as in
various alloys. An important application area for lithium carbonate is
in batteries for mobile phones, computers, electric and hybrid cars,
electric tools etc.. Lithium has special properties as regards ability
to store electric energy, and the battery sector is an important
growth area for lithium carbonate.

Increased focus on environmental issues and CO2 emission have already
significantly affected the demand for electric and hybrid cars based
on lithium ion batteries. The large international car manufacturers
have development programs and focus which clearly indicate increased
relative importance of these car types in the coming years. Toyota, as
an example, has informed of plans to go 100% hybrid by 2020.