Good morning and welcome everyone to the third quarter interim presentation by Nordic Mining. My name is Ivar Fossum, I'm the CEO, and together with CFO Birte Norheim, we will host the presentation this morning. The presentation will last for 25-30 minutes, and to all of you following on the web, please note that you can send your questions in, and we will take them up in the following Q&A session after the presentation. I think we start. I need to leave you this with four seconds before we move on. We have a very traditional agenda. I'll give you a couple of highlights before we enter into the normal agenda, going through the figures, and then we will describe more the status about our project, the Engebø Rutile and Garnet, as well as our asset on lithium in Finland. First, a couple of highlights.
It's been an important quarter and fall with regard to authorities, both local but also national authorities with regard to operational license. The big highlight of today is that we are close to finalize the huge DFS study for the Engebø Rutile and Garnet project. We targeted to release this before Christmas, but we need to finally assess and quality assure all the final details in the study, and we will present the main results in January. We will do it by way of a presentation and a dedicated web host like this one in January, as well as an open day here in the office to give you sort of all the ins and outs of the DFS study, which is extremely comprehensive and, of course, of very, very high importance for the project and for our company going forward.
Having said that, we have started already the preparations for construction financing. We have met with institutional possible lenders, and also the due diligence process for some of these institutions has started, and we have had an introductory meeting with ECAs potentially bringing guarantees in the financing. With these very introductory remarks, I'll leave the floor to Birte, who will take us through the figures.
Thank you, Ivar. On the income statement, the operating loss for the quarter of NOK 21.3 million is more or less in line with what we have seen in recent quarters and reflects the continued high activity level on the DFS, which is now in the very final stages of completion. Valuation of Keliber has been made on the same basis as we have in recent quarters, which is on the basis of the share issue that Keliber executed in February, which valued our holding of 18.5% to EUR 12 million. However, due to the weakening Norwegian krone, we have recognized the currency gain of NOK 2.4 million, which brings the net loss for the quarter to NOK 19.1 million. On the financial statement, on the balance sheet, you will recognize the Keliber investment recognized as a financial investment of just shy of NOK 116 million.
Our cash balance as per end of September was NOK 17.3 million, but bearing in mind that we have executed a rights issue in October, which has strengthened the cash balance and also the equity by NOK 35 million gross. Still no debt on the balance sheet. As for the rights issue, we did issue 25 million shares at a subscription price of NOK 1.40 in October, bringing gross proceeds of NOK 35 million. We did see very solid participation from our existing shareholders, and the total oversubscription was more than 50%. The funds that we raised through that issue will take the company through the DFS and into the feed phase. As we have said before, we expect that the completion of the DFS, which represents a major milestone for the company, will form a solid basis for further financing of the company.
As Ivar mentioned, we are continuing the preparatory work on the construction, and the most important update since last quarter is that the bank's due diligence process has now just commenced. We have said before, and I will remind you again that the intention is also that offtake partners will contribute with a substantial portion of the construction financing.
Thank you, Birte. We will move on to the projects, and I will start with the Engebø Rutile and Garnet project. It's not really the time to give a lot of details, but I'd like to indicate a few highlights from some of the sort of technical and project development over the last months, which are of importance. First of all, we have seen continuous optimization of the open pit all the way up to now, which has resulted in more resources and less waste from the pit. As you know, we have a limitation by the local municipality with regard to the overall size of the pit, but within that limitation, there are extremely many parameters to optimize on how we actually extract the ore from the open pit, and that has been crucial to us.
We have had several rounds of optimization of the crushing and milling sequence, which goes straight into the rest of the process, which are now finalized. That work has also resulted in improved recoveries for both minerals, which is also extremely important in our project. We are doing now the final assessment of 80-90 sort of bid packages for putting together the financial parameters for the project. We see an increase in CapEx, but that is well offset, maybe even more than that, by some of these other variables in the project. As some of you may have noted, we are also helped by an improvement in the titanium prices, which we expect to continue in the future. I'll talk a little bit about authorities, regulation, and permits because this is comprehensive stuff in all jurisdictions, specifically in Europe and maybe specifically in the Nordic countries.
The approval of the detailed regulation plan, which we got in August, was very important for us. All the sort of the process area, the infrastructure, the supply of water, power, access roads, the whole mining area, the waste rock area, access roads to the mine itself, all those details, and also drainage of water, all these elements have now been approved and also approved in the detailed regulation. It is kind of a formality, but an extremely important one in our progress. The only remaining zoning plan or regulation of land is the tiny one for the freshwater pipeline coming from the neighboring municipality, which we hope will be resolved in the near future. To the operational license, which in Norway is given by the Directorate of Mining in Trondheim. We applied 1 February this year.
It has been very well received, that is our perception, and it has undergone a comprehensive hearing round by many institutions and by three different municipalities. They have, over the last couple of months, given broad support to the application. This is, of course, important when you know that you want to build an industry lasting for 40 years plus in the district in Norway. We expect the final approval of the operational license to come in the first quarter of 2020. I'll say a few more words about the operational license because people read many different things in that license or permit, if you like, and it's really not about if you are able to or allowed to open a mine or not, it's about how you extract the minerals, how you do your mining from day to day. There are three main focus areas.
It's first of all safety with regard to people, with regard to the integrity of the mountain and the mine itself. It has to do with tension in the rock, geotechnical calculation and stability. A lot of studies going into that because we are changing the shape of a mountain, and these things are extremely important, and that's why the directorate is focusing on that. Separately, it's also about how the resource is being utilized, in what sequence are we taking out waste rock compared to ore. Also on behalf of society, that we are having the end in mind when we do the mining in terms of taking out the resource in a good sequence and in a good manner so that we are not rushing to things, but doing it in an orderly fashion, to put it in brackets.
Finally, and equally important, it is about rehabilitation as we go along, but certainly when we have finalized. In that perspective, the open pit is one big chapter, and then you have the finalization of the overall mine, which is long into the future in our perspective. Timeline towards production, we are getting close to the DFS, which is sort of the next milestone, and that is the platform for getting our finance further. There are other elements. As you know, we are working with our industrial partners on offtake, important ingredients to back the financing for construction, and we will go into detailed engineering and preparation for construction in the feed phase. Financing our projects and greenfield is a comprehensive project, but that's why we are starting early and will work on this towards summer.
Hopefully, by third quarter, we are getting close to putting all of these construction financing packages together. I want to say a few words about ESG. We are going to be a vital player in a local community for many, many years, and our focus will be to be an open and transparent and an integrated employer and business player in the area, but also have a consciousness about the global environment we will operate in. That is why we would like to focus on the UN sustainability goals and pick some of those which are particularly relevant to our operation. That will be an inherent part of our focus and our strategy going forward as an industrial player. It will also be broadly described in the DFS study. Just to pinpoint a little bit sort of highlights on our thinking in this area.
We are in process of further building our team in Naustdal. We'll be at around 10 people when we start the construction of the project. That was the Engebø Rutile and Garnet. I'll say a few words about Keliber Oy and lithium in Finland. As you know, Keliber have had a long and fantastic journey, but also a transition. They have transformed from being a one-plant to a two-plant production operation. They have transformed from planning to produce lithium carbonate to lithium hydroxide, which we think was a good move. They have consistently explored, which has resulted in continuously increasing resources coming from somewhat low figures to start with.
You can see on this graph the development up till last year, which brings the resources up to 12.5 million tons of ore, a tremendous increase, also divided on the various mines, Rapasaari and Syväjärvi being the most promising one when we look at the results from the resource drilling in the previous years. A fantastic development, and Keliber will continue to explore even into the production phase of the project. It has been what I would say a downtime in the lithium prices, both for carbonate but also for lithium hydroxide. More dramatic on the carbonate side, there can be many reasons for that. The underlying demand for lithium as an ingredient in batteries for the automotives and many, many other applications are still fundamental. It's still strong. We recently saw Tesla's plans of making new plants in Europe.
We see many other initiatives in Sweden, in Norway, in Hungary, in Germany. There will be a huge capacity or production of lithium-ion batteries in Europe, which will need feedstock. We think that the prices for lithium are about to level out, and we expect them to come back at a certain level. Finally, as I have described sometimes before, Keliber is doing the sequence of things in the traditional fashion. They develop, and then they have sort of entered into the area of permitting towards the end. They have also realized that that has been maybe a more time-consuming process than anticipated, and they need several permits for several open pits and two plants, and that has taken longer than anticipated.
We think they are doing excellent work in preparing and consulting and communicating about these permits, and certainly they will get there. It has led to a time delay in when they can justify to move into the construction period for the project. They envisage that they may start construction in 2021, but it is still pending that they are getting progress on the permitting side. We will try to give you updates on this. Mining is extremely promoted by the Finnish authorities and by politicians. I think there is still a strong push to get Keliber finally permitted and into production in Finland. That was my presentation of the two projects. We leave the floor and also the people out there on web to post their questions, and we will try to do our best to answer. Okay.
We have received some questions by email from the video audience, but I suggest that we start with possible questions from the audience in the meeting room here. Anybody? Yes? Morton? You introduce yourself, please.
Morton Woodman, Carnegie. I start with a nasty question. You mentioned broad support, but what really happened in the Sunnfjord Council the other day? You nearly were voted down.
That is a good question. We were also taken a little bit back by especially the Labour Party, which had been supporting us since day one in 2007, and we started the regulation process. I think it is important to remark that Sunnfjord is a new municipality consisting of four municipalities being merged together with one.
The Naustdal municipality is one of these four municipalities, and I think it's fair to say that there is quite a bit of politics and symbolism in that voting. I'm not coming back to my explanation about operational license. I'm not quite certain to what extent they really are aware of the status of the project and what they actually voted about. I have experienced very, very solid support from the Labour Party, sort of from national, regional, and local level, and we expect that to continue. Are there other questions from the participants here in Oslo? Yes?
Yeah. Could you talk a bit about the offtake agreements that you have in the process you're in with that? And especially, is it more volume-fixed or price-fixed or both?
I can start with the last part of the question.
It certainly will be both, and I cannot give any details on that apart from that we have constructive dialogue with these parties. It is many steps in how you develop these agreements. Normally, you have sort of an initial step when you agree the main terms, and then you go into a quite comprehensive. As the Oslo audience is considering some more questions, we can start with what has been received by email. First, we have a handful of questions from Mr. Jukku Jakula. I'll take them one by one. When do you release DFS? In January 2020. Is there any permission still missing? Yes. There is the operational license with regard to production, but in order to build the plant, we're only missing the tiny regulation plan for the freshwater pipeline. Then he asked, what is your plan regarding postponed Keliber divestment?
I don't think I will comment that sort of very much in detail. We consider our stake in Keliber as a very valuable one. We are impressed with the good work which is going on in Keliber, but we also acknowledge that things are taking more time, specifically related to the permitting process. How will you finance the CapEx? I suggest that he means the Engebø CapEx. We may assume that, and there is no change in that. We will consider all possible elements in that, but we are embarking on the traditional financing route, which is debt financing and equity financing backed by offtake agreements, but also backed by ECAs. Thank you. The last question from Mr. Jakula. Why are you delaying the approach of investing decision while the market of rutile and garnet is improving all the time?
This is only to we would like to move forward as fast as we can, but being a relatively small mining company, we have to build a sound basis for financing, and the DFS is exactly that. We are pushing forward and have no intention to delay as such. Okay. We have a question from Mr. Joakim Jensen. When is the startup of the smolt monitoring program, the migrating smolt, I presume he's hinting to, when is it starting? That will start the coming summer. Summer 2020. Summer 2020. Correct. A question from Mr. Gunnar Gytri. The AMR company claims that, and it's a bit difficult-worded, that they have the state property. I don't know what is actually meaning, but please say some words about it, the relation between what AMR claim that they have the right to and what we have. Yeah.
AMR are claiming and have claimed a lot of things. We have sort of the exploration rights for the whole Engebø mountain for the state mineral. We expect to get an operational license for the whole area. The last question from Mr. Bjørn Eirik Heiberg, who came a bit late into the presentation, but he asks, have you prepared anything for further processing, logistical transport out from the various areas of, I presume he means products? How have you planned the logistics? Okay. Anticipating his question a little bit, and he may ask us again, but all the products will be shipped out by boat from our own quay at Engebø. We will have an offloading system to be able to offload both products, and we will have storage facilities for both products.
We have a quay and a logistical setup that can sort of take any ship size from 2,000 up to 45,000 tons. He had some additional questions, but your answer covered also those questions. There are no more questions received here. Are there additional questions in the room? Yes? Thank you. Seabed minerals, can you talk a bit about that? Is that something within the next five years, or is it more past beyond five years from your perspective? It depends if that question is related to us or in general. In general, I think things are moving quite rapidly, but not so fast in Norway, but on a global scale. We see an increasing amount of activity. With regard to our strategy, I think it is beyond five years for certain.
But we are very, very happy to see the engagement, not only by Norwegian politicians, but also by the scientific communities around this area. Yes, we have one more question here in Oslo.
David Andersen, iCarry. A question about the offtake agreements. Do you have any idea how much percentage of the construction costs you think that will cover?
No, I can't comment on that presently, and it's not the right time to do it here. I will come back to that. We have not received any more questions from the web audience. It appears that there are no more questions here in the room for the time being. So then I guess that we close this session and thank everybody for the participation. Thank you.