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Nordic Mines' gold deposit in Laiva mine continues to grow and now corresponds to another two full years of production
Translation from Swedish
One of the largest gold deposits ever to have been found in the Nordic region is continuing to grow. Drilling performed during 2011 at the Laiva mine in Finland indicated that ore reserves are 4 million tonnes larger than the previously reported estimate. This corresponds to another two full years of production. Proven and probable ore reserves now amount to 16.9 million tonnes with an average gold content of 1.60 grams per tonne, corresponding to 27,000 kilos of gold.
The current report covers drilling results up to year-end 2011. The underlying mineral resource above cut-off 0.8 grams of gold/tonne now totals 20 million tonnes with an average content of 2.04 grams of gold per tonne or more than 40,000 kilos of gold. The greater part of these mineral resources is included in the currently reported ore reserve. The updated ore reserve takes into account developments since the feasibility study was conducted in the spring of 2010. During this period the price of gold stabilised on a considerably higher level and increased exploration drilling has indicated that the deposit is much larger than the deposit known by Nordic Mines at the time, although certain costs have also risen sharply during the period, such as costs for diesel fuel and reagents. As a whole, this has led to much longer operating times and a higher total cash flow from the Laiva mine, despite the somewhat lower average content. At the current price for gold, the effect was further strengthened.
"The increase in the ore reserve in combination with the further expansion of mineral resources, builds the platform for boosting production more," commented Michael Nilsson, CEO of Nordic Mines, in a statement.
Continuing investigations of the Laiva mine are being planned toward the depth and to the east where the deposits are still completely open, but also in nearby identified gold mineralisations.
The ore reserve currently amounts to 16.9 million tonnes with 1.60 g of gold per tonne, compared to the previously reported figures of 12.9 million tonnes with 1.85 g of gold per tonne. This indicates that the Laiva mine, located outside Raahe in central Finland, is one of the largest gold deposits in the Nordic region.
The updated ore calculation is based on core drilling work carried out during 2011. Thirty new holes were drilled during the year, while eight older drill holes were extended. The new drilling covers a total of 10,017 metres. The calculation includes a total of 76,244 metres of drilling.
The reported ore reserve is based on a gold price of EUR 750/oz, which is approximately 40 per cent below current levels.
The international mining consultant group CSA Global ( www.csaglobal.com ) / Malcolm Titley, member of the Australasian Institute of Geoscientists, AIG, and the Australasian Institute of Mining and Metallurgy, AusIMM, has been responsible for the calculation of the mineral resources and the ore reserves. The calculations have been performed according to the guidelines specified in the JORC code. Production costs and other technical parameters are in line with current costs and conditions at the Laiva mine.
The May 2012 model includes adjustment of the resource classification boundaries. A comparison between the May 2012 and August 2011 MRE is presented in Table 7, in the CSA report, available on Nordic Mines homepage. The increase in overall tonnes is a direct result of the additional drilling. The increase in M&I is due to improved confidence resulting from the improved granite waste interpretation and infill drilling. The reduction in grade in the MRE at the 0.8 g/t gold cut-off is primarily due to updated parameters used in the grade estimation. The updated parameters include: 1) the use of variograms derived from the past 10 months of mine production grade control drilling; 2) additional surface mapping data resulting in adjustments to the orientation domains used to control the mineralisation directions; and 3) improvements to the geostatistical modelling technique to take into account minimum mining widths and in-situ dilution. This has resulted in some increases in the 'mixing' of high and lower grades, which has resulted in an overall grade decrease at the 0.8 g/t gold cut-off, in average with 0,17 g/t.
Attachments:
Summary Report R215.2012 - Mineral Resource and Ore Reserve Update 6 May, 2012
Go to www.nordicmines.se/bolagsinfo/rapporter/1171105-rapporter
This press release has been examined by Peter Kuiper, appointed as a Qualified Person by SveMin and employed as the Head of Development at Nordic Mines.
For further information contact:
Michael Nilsson, Chief Executive Officer of Nordic Mines, phone: +46 18 84 34 501.
E-mail: mille@nordicmines.se
Nordic Mines in brief
Nordic Mines is a Nordic mining and exploration company with the goal to become one of the leading gold producers in Europe and serve as a role model in respecting the environment. At the end of summer 2011, the company began mining gold in Laiva, outside Raahe in central Finland. The gold deposits there are among the biggest in the Nordic region, with ore reserves of 16.9 million tonnes and a gold content of 1.60 grams per tonne. Exploration is being conducted in Finland and Sweden. Nordic Mines was founded in 2005, and as of December 31, 2011, the Group has an equity of SEK 377 million. The Group currently has 88 employees and its head office is in Uppsala, Sweden. The Nordic Mines share is traded on the Nasdaq OMX Mid Cap exchange in Stockholm. For further information about the company and its operations, visit our website www. nordicmines.se .
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