Key information relating to the subsequent offering to be carried out by Nordic Mining ASA

Nordic Mining completed a NOK 200 million private placement by issuing 16,666,666 new shares at NOK 12.00 per share and proposes a subsequent offering of up to 10,833,333 shares at the same price to existing shareholders (raising up to ~NOK 130 million). The subsequent offering will allocate non-transferable pro rata subscription rights to eligible shareholders as of 15 January 2026 and is conditional on completion of the private placement, corporate approvals (EGM/board resolution), publication of a prospectus and the company's post-placement share price; the company may cancel the subsequent offering if shares trade at or below the subscription price at sufficient volumes. Clarksons Securities AS and Pareto Securities AS are managers for the placement.

Analysis

Market structure: The immediate winners are the private placement investors and the company (NOK ~200m raised) and, conditional on execution, existing shareholders able to exercise pro rata non-transferable rights in the Subsequent Offering (up to NOK ~130m). Losers are non-participating minority holders facing dilution and potential share-pressure if the market refuses the NOK12 subscription price; total new issuance could be ~27.5m shares (≈NOK330m) of fresh supply into float. This is a capital-raise-driven supply shock likely to depress free-float liquidity and weigh on near-term price discovery.

Risk assessment: Tail risks include (1) cancellation of the Subsequent Offering which would leave a visible overhang and trigger selling (low-probability, high-impact), (2) use-of-proceeds failing to de-risk the project leading to a refinancing need within 6–18 months, and (3) jurisdictional sales restrictions complicating take-up and secondary trading. Immediate (days) risk is post-placement volatility; short-term (weeks–months) is exercise and EGM outcomes; long-term (quarters) is project execution and cash runway after ~NOK330m raised.

Trade implications: Direct play: only take fresh long exposure if prepared to commit pro rata at NOK12 — otherwise avoid. Tactical short: establish a modest 1–2% portfolio short (or buy puts) to capture 10–25% downside if rights uptake is weak; stop-loss +10% above NOK13.5. Pair trade: long 1.5–2% in large diversified miners (e.g., BHP.L) vs short equivalent exposure in Nordic Mining to exploit idiosyncratic funding risk over 3–6 months. Options: buy 3-month put spreads (e.g., short NOK12/long NOK9 protection) to hedge existing long positions.

Contrarian angles: Consensus underestimates upside if proceeds fully de-risk project milestones — a successful subsequent offer + visible capex progress could re-rate shares >30% in 6–12 months; watch for a post-offer squeeze. The market may over-penalize the non-transferability of rights — historically Oslo junior rights issues trade at 15–35% discounts pre-exercise then recover after conversion. Unintended consequence: a cancelled Subsequent Offering could concentrate control with placement investors and trigger governance risk and further discounting.

Key Decisions for Investors

• If initiating or increasing a long position in Nordic Mining, size it 2–3% of portfolio only if you are ready to exercise pro rata rights at NOK12; commit capital within the offer window (expect prospectus and EGM in the next 30–60 days).
• If you will not subscribe, establish a tactical short of 1–2% of portfolio (or buy equivalent puts) targeting 10–25% downside over 1–3 months; set a hard stop-loss at +10% above NOK13.5 to limit squeeze risk.
• Implement a 3–6 month pair trade: long 1.5–2% in a large diversified miner (e.g., BHP.L) and short an equal notional in Nordic Mining to isolate idiosyncratic funding/execution risk; rebalance on EGM/prospectus publication.
• Buy a 3-month put spread to hedge existing Nordic Mining exposure (sell NOK12, buy NOK9) sized to cover 50–75% of position; unwind if 20-day VWAP exceeds NOK15 on sustained >1.5x average volume, or after delivery of positive capex milestones within 6 months.