Watchlist Update: Nordic Mining (NOM.OL)
Clarksons trims target but doubles down on long-term upside
📌 What’s new (Clarksons, 14 April):
Clarksons Securities has cut its target price from NOK 28.5 to NOK 26.0, citing updated FX assumptions, an operational delay, and the high-cost USD 33m tap issue. Despite this, they maintain a BUY rating, emphasizing that the long-term case remains intact.
Key highlights:
Garnet and rutile shipments delayed due to pump circuit design issues; replacements are underway
The tap issue adds costly debt (12.5% coupon), but helps secure liquidity buffer above USD 15m covenant
Ramp-up is now expected to reach steady-state by year-end, but there will be no revenue in Q1 2025
Target price: NOK 26, implying ~35% upside from current levels
If a lower discount rate (10%) were applied, valuation would be NOK 30/share
Execution remains key – and debt isn’t cheap
Clarksons acknowledges that the latest financing was expensive, but sees it as a necessary step to secure runway through ramp-up. Their update is supportive of Engebø’s long-term potential, while also noting that the operational complexity and cost base leave little room for missteps in the near term.
Bottom line:
The risk/reward remains intact, but the next 6–9 months are critical. Delivery on production volumes and timelines will determine whether the market begins to reprice the stock – or applies an even deeper discount.
Longer-term re-rating potential lies in refinancing the high-cost bond and initiating shareholder distributions.
Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. Always conduct your own research or consult a financial advisor before making investment decisions. The author may hold positions in the mentioned securities.