Finland is undergoing an unprecedented boom

Register to receive Mining Journal Breaking News three times a week at mining-journal.com/newsletter OCTOBER 18, 2013 29 Mining boom This attractive mining destination is aiming to be the leader in the sustainable extractive industry Worker examining core samples at the Sakatti drill site Toni Eerola and special correspondents Geological Survey of Finland Finland is undergoing an unprecedented boom in mining, as documented in 2012 s Mining Journal Nordic countries report. Having maintained a good position as a preferred destination for mining investments for several consecutive years, Finland achieved first place in the latest Fraser Institute Survey of Mining Companies. Several international players are exploring minerals and opening mines in northern and eastern Finland. With luck, this could give affected regions a much-needed economic boost, even though their efforts are fuelling fears about the effect of mining on the environment. At the same time, discussions on sustainable development and corporate social responsibility (CSR) have emerged in the wake of environmental problems at Talvivaara, Europe s largest nickel mine. Talvivaara s problems have sparked a national outcry against mining, and opposition groups have organised protests. Nevertheless, the minerals industry is recognised as an important contributor to the economy, particularly in remote rural areas. The Finnish government is committed to developing the sector, and related economic activities, in ways that sustainably address the inherent risks. Additionally, the push towards sustainable mining is coming from initiatives adopted by the European Commission. The European Union (EU) is aiming to become self-sufficient when it comes to mineral production. And it is eager to achieve broad public acceptance for the idea that mining is good news for the economy. Sustainability action plan The Finnish government has launched a series of initiatives to promote CSR, as well as help the industry earn the support of affected communities. During this year s March quarter, the government published Making Finland a leader in the sustainable extractive industry. The programme was Fast facts: Finland Concentration mills Gold Base metals Chromite Capital: Helsinki Population: 5.4 million Real GDP growth: -0.2% (2012 est) Currency: euro Producers of steel and base metals Raw steel Rolling mill Tube works Nickel, anode copper Cathode copper, copper products Zinc Aluminium Cobalt Electrolysis Agnico Eagle Mines Ltd Kittilä First Quantum Minerals Ltd Sodankylä Agnico Eagle Mines Ltd Sodankylä Boliden AB, Luvata Norilsk Nickel Harjavalta Nordic Mines AB Laiva Boliden AB Kokkola Outokumpu Oyi Pietarsaari FNsteel Oy Dalsbruk Outokumpu Stainless Oy Vaasa Outotec Boliden AB Harjavalta Turku Oulainen OM Group Kokkola Pulkkila Pyhäsalmi Pyhäjärvi Belvedere Resouces Ltd Nivala Cupori Oy Tampere Hämeenlinna Helsinki Lappohja Rovaniemi Outokumpu Chrome Oy Kemi Oulu Raahe Jyväskylä Kuusakoski Oy Heinola Kajaani Talvivaaran Kaivososakeyhtio Oyj Sotkamo Altona Mining Ltd Kaavi Endomines Oy Pampalo Oy Ovako AB Imatra Dragon Mining Oy Vammala Joensu Metallurgical and refinery plants in Finland: metal concentration mills and producers of steel and base metals Source: Geological Survey of Finland the brainchild of a joint-effort by government agencies, ministries, authorities, specialists, industry, non-governmental organisations (NGOs) and reindeer herders. The programme was formulated in a series of high-level roundtable and working group sessions that started last year. As a result of this process, led by prime minister Jyrki Katainen, a total of 35 of measures are under consideration. These include improving administration and education within the industry. Also, the upgrading of infrastructure, and improvements in transparency and communications. A number of different groups are responsible for implementing these recommendations, and everyone agreed progress towards achieving these objectives should be monitored to reassure interested parties. The action plan completed the goals established by the National Mineral Strategy, implemented in 2010. The initiative aims to make Finland a global leader in sustainable extractive industry practices by 2030. Mineral-industry cluster Finland s mineral-industry cluster is one of the strongest in the world, employing 30,000 people. It was first developed several decades ago around local mining operations and is based on the fruitful integration of mining, metals refining, technology, manufacturing and service supply. A clustered industry enhances the development of equipment and machinery, technology, services and ore-processing methods. Finnish companies such as Outotec Oyj, Metso Minerals, Normet Group and Paakkola Conveyers are world leaders in their sections in mining technology. Many Finnish companies offer high-tech products for exploration, process control, quality assurance and environmental measurements. A number of Finnish companies perform research and development linked to the management and purification of mine waters. Photo: Anglo American plc 29_31, 34_35MJ131018.indd 29

30 OCTOBER 18, 2013 mining-journal.com @ miningonline 2012: Allocating 30 million (US$41 million) to finance the mining industry and related technology; and, 2013: Launching an action plan to develop a sustainable mineral-industry cluster. Photo: Nordkalk Oy AB Key projects All sections of the industry were involved in forming the 2013 action plan to develop a sustainable mineral-industry cluster in Finland under the umbrella of the Finnish government. Energy and environment The metallurgical industry, an important part of the mineral-industry cluster, employs around 17,000 people. It not only processes metal concentrates from local ore deposits, but also imports significant amounts of concentrates from abroad, especially iron, copper, nickel and zinc. Plants apply advanced energy-efficient technologies that produce low emissions into the environment in comparison with operations elsewhere. The metal-refining industry constitutes a 15% share of total exports from Finland. The Finnish government has taken a number of steps to develop the country s mineral-industry cluster. These measures include: 2008: Opting to support investments, education and training related to the mining industry; 2010: Establishing a new mineral strategy; 2011: Implementing a new Mining Act; 2011: Creating a Green Mining Programme designed to promote Finland as a beacon of eco-efficiency by 2020; 2011: Outlining plans to develop the mineralindustry cluster; Sustainable mining in Lappeenranta: The Nordkalk limestone quarry of Ihalainen is in harmony with a residential area The Finnish government is committed to developing the extractive industry and related economic activities in ways that sustainably address the inherent risks Below, left to right: Finland s Fraser Institute rankings (20072013); miners at a plant operated by Nordic Mines In 2012, 12 metal mines operated in Finland, producing a total of 19.6Mt of ore. More than 15Mt of industrial minerals were produced across 38 mines and quarries. The Geological Survey of Finland (GTK), in cooperation with the geological surveys of Norway, Sweden, and Russia, has published reports on critical metals and minerals in northern Europe. Recent joint efforts include a new version of the Fennoscandian Ore Deposits Database (FODD) and associated metal deposit map, as well as a new map of industrial minerals. GTK continues its mineral-potential mapping projects in Finland. The main focus is on areas that have old or poor bedrock data. Agnico Eagle Mines Ltd operates a gold mine in Kittilä in northern Finland. It produces roughly 160,753oz/y of gold. Open-pit mining at Kittilä ended in November 2012, so all mining is now underground. The life of the mine is projected to extend through to 2044. The expansion project, to be completed by the second half of 2015, should increase throughput capacity 25% to 3,750t/d. Dragon Mining Ltd has two gold mines in southern Finland: Orivesi and Jokisivu. Mining at Orivesi reached a depth of 850m in 2012 and planned development is due to reach 1,100m. Mineralisation in the Kujankallio area at the Jokisivu mine extends to at least 525mRL (vertical depth). The company s Juomasuo gold project in Kuusamo in northern Finland has moved towards a feasibility study and the development decision. Dragon Mining also has a number of other advanced gold projects in Finland. Endomines AB operates the Pampalo gold mine in eastern Finland. The 2013 production target is 800900kg (25,720oz-28,935oz). Capacity at the gold concentration plant was recently increased to 420,000t/y. 1 3 Ranking 5 7 9 13 15 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 29_31, 34_35MJ131018.indd 30 Photos: Nordic Mines 11

31 Register to receive Mining Journal Breaking News three times a week at mining-journal.com/newsletter OCTOBER 18, 2013 Pampalo lies on the 40km-long Karelian gold line, where the company has several exploration targets. The company has begun removing overburden at the Rämepuro satellite mine and begun industrial-scale test mining of the ore. Full-scale mining should start in early 2014. Lappland Goldminers AB operates the Pahtavaara gold mine in northern Finland. Production totalled 18,486oz of gold in 2012. The company s drilling campaign has shown that both the mine and its surroundings have ore potential. However, after the mine experienced difficulties in meeting its production targets this year, operations were briefly suspended while the company underwent a corporate reorganisation. Gold production at the mine resumed on August 6. On October 8, the company announced that its application for an extended reorganisation period until December 27 had been approved. Nordic Mines AB owns the Laiva gold mine in the west of the country. Production launched last year with an initial output of 29,964oz of gold. Proven and probable reserves are 16.9Mt, grading at an average of 1.6g/t Au. Although still below target, production during 2013 s March quarter climbed to 11,027oz. Mawson Resources Ltd has continued with its gold-uranium project in northern Finland. The Rompas-Rajapalot project is focusing on a recent discovery in northern Finland of high-grade gold Silver Photo: Agnico Eagle Agnico Eagle s open-pit Kittilä gold mine in Finland and uranium within an area of about 100km2. The first drilling programme at Rompas in 2012 produced positive results, included 6m at 617g/t of Au in one drill hole. This confirmed the significance of hundreds of bonanza-grade surface occurrences channel-sampled during 2010 and 2011. Since 2010, UK-based junior Mineral Exploration Network Ltd has been exploring for gold in the Continues on page 34 INVEST IN SOTKAMO SILVER Approximately 20 million euros has been spent on project development All necessary mining licences and environmental permits received Underground mine access and ventilation shaft down to 350m below surface are completed Total amount of surface and underground drilling is 53,000m Technical mine planning completed, including a Full Feasibility Study JORC classified mineral resources and proven and probable ore reserves During the first 3-4 years mining the silver grade of the plant feed will be ca. 120 g/t silver An additional exploration target is more than 20Mt mineral-resources Production could start within 12-14 months Good quality concentrates attainable via standard flotation method Positive Environmental, Health and Safety Review (Equator Principles Assessment) received Low technical and geological risk ISIN-code for Sotkamo Silver: Shares = SE0001057910 and ticker SOSI (NGM Stockholm) / SOSI1 (NASDAQ OMX Helsinki) Warrants = SE0004635290 and ticker SOSI T03 (NGM Stockholm) Sotkamo Silver AB Hovslagargatan 5B, SE-111 48 Stockholm Tel: +46 8 30 49 20 Fax: +46 8 611 47 30 E-mail: timo.lindborg@silver.fi 29_31, 34_35MJ131018.indd 31

34 OCTOBER 18, 2013 mining-journal.com @ miningonline Photos: Outokumpu Oy The Kemi chromite mine (left) with large ore reserves is closely integrated with the Outokumpu Tornio stainless steel production plant (right). The Kemi chromite mine has been operating since the 1960s The only full service laboratory in Northern Europe Sample preparation and analytical services based on international best practices Geochemical packages Precious metal exploration Base metal exploration Uranium and iron ore exploration Industrial minerals Accreditation iso/iec 17025 finas T025 All laboratory and testing services for mining from the same laboratory Grade control samples Process samples, concentrates and side products Laboratory design, staff training and outsourcing Environmental monitoring Soil, vegetation and water samples aba-tests and standardised leaching tests www.labtium.fi Espoo Kuopio Rovaniemi Outokumpu Sodankylä Jyväskylä 29_31, 34_35MJ131018.indd 34 www.mining-journal.com Continued from page 31 greenstone belts of eastern Finland on occurrences that were initially identified by GTK. The company has performed detailed geochemical and geophysical surveys and light-weight diamond drilling. Studies show major extensions to known gold occurrences. More drilling and resource definitions are planned for 2013 in the Piilola area. Sotkamo Silver AB has developed the Taivaljärvi silver project in eastern Finland. An environmental permit was granted for the project in April 2013, and mining is due to begin at the end of 2014, with Get the latest in Breaking News on our website estimated annual production is between 11,253Mt and 14,468oz. It is an open-pit deposit and reaches depths of 550m. Talvivaara Mining Company plc produced 12,916t of nickel and 25,867t of zinc from its Talvivaara mine in 2012. Summarising a tough year, the company said: A shortfall in production combined with weak trends in the price of nickel burdened Talvivaara s liquidity in 2012 and the water balance issues and the discovery of a leak in the gypsum pond in November caused a major setback to production and environmental development work. Altona Mining Ltd started production of copper, gold, and zinc at the Kylylahti underground mine in the east of the country in 2012. The project includes a processing plant, and mill throughput now exceeds 550,000t/y. In addition, some 80,000t of cobalt-nickel concentrate will be produced each year and held in temporary storage. Meanwhile, Mustavaaran Kaivos Oy is leading a project to reopen the Mustavaara vanadium-irontitanium mine, which originally operated between 1976 and 1985. When the mine reopens in 2017, it will focus on exploiting both vanadium and iron. Plans include the construction of a smelter on the west coast. The planned ore production is 3.25Mt/y, which would produce 450,000t of concentrate. FinnAust Mining plc, an exploration subsidiary of Australian-based nickel sulphide explorer and producer Western Areas Ltd, has reportedly dropped exploration for Talvivaara-type polymetallic deposits. The company is now focusing its attention on conventional volcanogenic massive sulphide ore deposits (VMS) and nickel deposits in the east of the country. The main targets to be drilled in 2013 are on the depth extensions of the Hammaslahti copper-zinc deposit and near the town of Outokumpu. The targets are largely defined by old data and recent ZTEM surveys. First Quantum Minerals Ltd (FQM) operates two mines in Finland. At 1,500m, the Pyhäsalmi copperzinc mine is the deepest in Europe and produces copper, zinc and pyrite concentrates. The copper and zinc concentrates are sold under long-term contracts to smelters in Finland. Pyrite is sold under contract to customers in Europe and Asia, as well as on the spot market. Pro-

35 Register to receive Mining Journal Breaking News three times a week at mining-journal.com/newsletter OCTOBER 18, 2013 duction in 2012 was 12,600t of copper, 25,600t of zinc and 891,700t of pyrite. The mine is scheduled for closure in 2019. FQM s Kevitsa mine is seeking to exploit a large NiCu-PGE deposit in the north of the country. Open-pit mining began in 2012 and ore production is expected to reach 10,000t/y of nickel and 20,000t/y copper. The mine s estimated life is 32 years. FQM is looking at possibilities to scale-up annual production to 7.5-10Mt. The company has discovered sulphide occurrences to the west and north of the Kevitsa mine. The nickel content in the new discoveries is as high as 2.4%. Anglo American plc has launched the Sakatti project, which is based on a 2009 discovery in the same area as the Kevitsa mine. Sakatti is a significant Cunickel-platinum group metals (PGM) deposit, geochemically similar to the neighbouring Kevitsa deposit. The current exploration programme is focused on delineating the ore body. Vuorokas Oy, a new entrant to the market, plans to reopen the Otanmäki mine in eastern Finland. The Otanmäki mine operated from 1949-1985 and has around 40Mt in mineral resources. Photo: Metso Mining Oy Grinding by Metso s ball mill at the Endomines (Pampalo) processing plant Northland Resources SA is seeking to develop the Hannukainen deposit in northern Finland. The Hannukainen iron-oxide copper gold project aims to produce approximately 2Mt/y of iron-ore concentrate and an average of 35,000t/y of Cu/Au concentrate. Nordic Mining ASA s subsidiary Keliber Oy owns one of Europe s largest lithium spodumene deposits. Keliber has concessions and permits to start mining operations, and plans to be the first company to produce lithium carbonate in Europe. Keliber is carrying out drilling and metallurgical tests and preparing a feasibility study. Norwegian-based chemical company Yara International ASA is overseeing the US$1 billion Sokli apatite mine project. It is the largest on-going mining project in Finland, and planned phosphorus production should reach 1.5-2.0Mt/y. The final investment decision should be made this year. The project would also require considerable investment in infrastructure. Cove Resources Ltd is leading the Koivu project to develop ilmenite resources in the Kokkola and Halsua areas in western Finland. The business plan calls for producing a high-quality titanium feedstock for Finnish and European markets. Toni Eerola is a senior specialist at the Geological Survey of Finland (GTK). Other contributors to the article include: Hannu Makkonen (chief of mineral exploration, GTK), Pasi Eilu (senior scientist, GTK) and Timo Ahtola (geologist, GTK), as well as Kirsti Loukola-Ruskeeniemi (head of department) and Maija Uusisuo (development manager) from the Mining Sector of the Ministry of Economic Affairs Exploring and exploiting the true potential of the Karelian Goldline Positioned for Growth! Invest in Sustainable Mining Strong portfolio of gold assets in Finland Pampalo Gold Mine in production since February 2011 Controls all known gold deposits on the Karelian Gold Line in Finland Modern and environmentally sustainable technology and production process Endomines is listed on NASDAQ OMX Stockholm and on NASDAQ OMX Helsinki www.endomines.com 29_31, 34_35MJ131018.indd 35