Nordic Mining suspends mining at Engebø amid stalled bond talks at 12.5% interest

Key Facts

Nordic Mining said on 26 October 2026 that its subsidiary Engebø Rutile and Garnet had decided to temporarily suspend mining operations at the Engebø project until further notice, pending the outcome of negotiations with the company’s creditors and the subsidiary. The company said the decision came amid continued uncertainty over the outcome of those negotiations and was intended to reduce costs and preserve liquidity until a solution is reached. The project is therefore suspending mining activity while financial talks remain open, with no date set for the resumption of operations. The company said the parties’ positions had diverged further since its previous announcement on 20 October, and no agreement had been reached on the proposed matters for bondholders. In its disclosure, it said the suspension was decided "in light of the continued uncertainty regarding the outcome of these negotiations, and in order to reduce costs and preserve liquidity until a solution is reached."

The talks focus on amendments affecting the subsidiary’s financing and its obligations to holders of its existing secured bonds, which carry annual interest of 12.5%. The proposals include obtaining waivers to allow the issuance of a separate series of short-term bonds with higher priority, as well as a further extension of waivers related to the minimum liquidity and minimum equity-to-book-value covenants. The company also requested a further deferral of the cash interest payment due under the terms of the existing bonds. These terms link the provision of new near-term financing with easing certain liquidity and capital requirements, alongside deferring cash payments. But the 26 October disclosure said the parties had not agreed on the proposed matters and that their positions had moved further apart than they were when the 20 October announcement was made.

On 20 October, Engebø Rutile and Garnet had asked creditors to approve the issuance of short-term bonds with higher priority worth $3 million, with an option to increase the issuance by an additional $3 million. It proposed that the new bonds carry annual interest of 17.5%, payable in kind at maturity. In that announcement, Nordic Mining said bondholders representing more than two-thirds of the bonds voted had expressed support for the proposals. However, the company and its subsidiary were still discussing them with the royalty facility provider, whose approval was also required. The subsequent disclosure shows that earlier indications of support from bondholders had not translated into agreement on the proposed matters by 26 October.

The negotiations follow the company’s second-quarter update, published on 18 August, which described limited liquidity and additional financing needs. In that update, it said its available liquidity headroom extended to 4 September and that it was working to secure an additional $10 million to $15 million to fund operations through November 2026. It reported that the project produced 1,262 tonnes of rutile and 10,127 tonnes of garnet in the second quarter, with production ramp-up progressing more slowly than planned and a liquidity gap. It also posted an operating result of negative NOK 154.3 million, with available cash of about NOK 150 million at quarter-end. The company recorded no recognized revenue during the quarter, while discussions continued over the quality of shipped products.

The mining suspension leaves the operating path awaiting a financial settlement, while the company’s 26 October disclosure announced neither a date for resuming activity nor an agreement with creditors. The proposals under discussion remain tied to short-term financing issuance, extensions of waivers from certain financial covenants, and a deferral of cash interest; according to the disclosure, no agreement has been reached on these terms. In its second-quarter update, the company had identified a need for additional liquidity to fund operations through November 2026, while it now says the suspension will remain in effect until the outcome of the negotiations becomes clear. Nordic Mining is scheduled to publish its third-quarter report on 3 November 2026. The report is the next announced milestone following the decision to suspend mining, as developments in the financial talks and the status of the Engebø project remain in focus.