Northland Resources SA announced that the independent engineer Royal HaskoningDHV as well as the trustee have confirmed Northland’s fulfilment of its second Cost to Complete test. Northland is now entitled to execute the second draw down of about USD 90 million from its USD 350 million bond loan facility.

In February 2012 Northland issued a corporate bond of USD 350 million. The funds are available on an escrow account with Norsk Tillitsmann ASA as the trustee. Northland Resources is entitled to draw down from the escrow account only after a Cost-to-Complete test performed by Royal HaskoningDHV (formerly known as Turgis Consulting Ltd) has been conducted. The purpose of the Cost to Complete tests is to ensure that Northland has sufficient funds available to complete the Kaunisvaara project.

Mr Karl Axel Waplan president & CEO of Northland Resources said that “We are pleased with the results of Royal Haskoning’s visit and analysis of the rapid development of our project. Their report and the sign-off by Norsk Tillitsmann will allow us to do the second draw down. Following this drawdown Northland will have enough funding to start production.”

Norsk Tillitsmann, in agreement with Northland, has appointed Royal Haskoning to act as independent engineer to monitor Northland until maturity of the bond in 2017. Since Royal Haskoning now has confirmed the satisfactory results of Northland’s second Cost-to-Complete test, Northland is entitled to its second draw down of about USD 90 million. The first draw down of USD 150 million was announced on July 2nd 2012.

The Northland bond has a 13% coupon rate which is payable in semi-annual installments. As per the bond agreement, the first installment on the bond was paid in September 6, 2012.

Source - Northland Resources

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