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Norrliden Polymetallic Deposit (Zinc, Gold, Copper, Silver, Lead)
The Norrliden Polymetallic Deposit is located in the politically secure mining jurisdiction of Sweden. It was acquired from North Atlantic Natural Resources AB, a wholly-owned subsidiary of Lundin Mining Corp. in May, 2008. A 90% interest in the property was purchased for 3 million Gold-Ore common shares. If a production decision is reached, Gold-Ore will pay an additional CDN$2.5 million in cash and CDN$2.0 million equivalent in shares.
The model for developing Norrliden relies on transporting the ore to a nearby processing plant thus negating the need for building a plant at the site. The three operating mines in the district all ship to one central plant. This key feature will allow us to develop a very low capital cost mine.
Location and Access
The Norrliden deposit is located in the central portion of the world-class Skellefteå mining district in northern Sweden. The deposit is 75 km west of Skellefteå and 47 km west of our operating Bjorkdal Gold Mine.
Norrliden is surrounded by active mines, past-producing mines and numerous advanced-stage prospects. This proximity to excellent infrastructure and a skilled labour force in a mining culture will provide a distinct advantage in developing Norrliden.
Project History
Geophysical surveys carried out by the Swedish Geological Survey (SGU) in 1958 - 1959 detected gravity and electromagnetic anomalies in the Norrliden vicinity. The first diamond drill hole was drilled by the SGU in 1960 and it cut the mineralized horizon under a mantle of glacial till. All of the mineralization at Norrliden is blind (covered by glacial debris).
In the last 48 years the following drill campaigns have transpired:
| YEARS |
OPERATOR |
NUMBER of HOLES |
METRES DRILLED |
| 1960-1973 |
SGU |
67 |
14,194 |
| 1986-1987 |
Boliden |
11 |
1,159 |
| 1998-1999 |
Lundin |
42 |
6,431 |
| 2006-2007 |
Lundin |
18 |
3,842 |
| |
TOTALS |
138 |
25,626 |
Lundin/North Atlantic has generated pre-feasibility reports covering most aspects of the project. These include:
- Mineral resource estimations
- Financial models -- economic analysis
- Underground mine plan and production scheduling
- Ore transport studies
- Environmental -- hydrology, water discharge and reclamation
- Metallurgical testwork
- Environmental, health, safety and socio-economic issues
- Capital and operating costs
Project Ownership
Gold-Ore purchased a 90% interest in the project from North Atlantic Natural Resources AB, a wholly-owned Swedish subsidiary of Lundin Mining Corp. The acquisition was made by issuing 3,000,000 common shares of Gold-Ore. When a production decision is made, a second payment of CDN$2,500,000 plus CDN$2,000,000 equivalent in Gold-Ore shares will be paid to North Atlantic.
The remaining 10% interest in Norrliden is owned by IGE Nordic AB, a Stockholm-based exploration company that trades on the Oslo Axess Stock Exchange. The interest held by IGE is carried to a production decision. If IGE Nordic declines to fund their 10% share of development costs, then this interest reverts to a 1.5% Net Smelter Royalty (1.5% NSR). Aside from Norrliden, IGE also owns a quality portfolio of exploration stage properties in Sweden and Norway.
Regional Geology
The Norrliden deposit is located in the prolific Skellefteå Field Mining District. Exploration in the district commenced in the 1910's and since then 100 massive sulfide deposits of VMS affinity with Zn, Cu, Au, Ag and Pb have been located. Over 25 of these deposits have been placed in production with a total pre-mining tonnage of 161 million tonnes at an average grade of 1.9 g/t Au, 47 g/t Ag, 0.7% Cu, 3.0% Zn and 0.4% Pb. The belt covers an area 150 km by 50 km and is Europe's biggest gold belt.
The Skellefteå mining district is in the 1.9 billion-year old Svecofennian Province of the Baltic or Fennoscandian Shield. The district is dominated by volcanic rocks (mainly felsic) and is regarded as a volcanic arc that formed between a sedimentary basin to the south and a continental landmass to the north. Most of the massive sulfide deposits occur within the upper part of the felsic volcanics typically close to the overlying sedimentary units.
Local Geology
The Norrliden deposit is a massive sulfide deposit hosted by suite of rhyolites, greenstones, tuffites and minor pyroclastic rocks. Narrow dikes and sills intrude this assemblage. All of the lithologies have been regionally metamorphosed to greenschist facies.
The polymetallic deposit consists of sub-vertical lenses of massive sulfide up to 30 metres thick with an east-west strike length of 400 metres and a depth extent of at least 300 metres. The deposit is open at depth and to the east. As is typical in these types of deposits, a zone of Cu-rich stringer mineralization underlies the massive mineralization.
Resources
Gold-Ore commissioned Adam Wheeler C.Eng., Eur.Ing., an independent qualified person to conduct a NI 43-101 compliant mineral resource on Norrliden in May 2008. Adam is very familiar with the deposit and conducted resource calculations for Lundin Mining in March 2004, April 2006 and again in September 2007, each time to reflect available drillhole data and the most recent price parameters.
The latest resource calculation was accomplished by creating a three-dimensional wireframe of the mineralized lenses which controls the generation of blocks. Geostatistical analysis (variograms) defined the search radius. Gold was capped at 5.0 g/t and silver at 700 g/t. Three metre wide sample composites were created. Ordinary kriging methods were used for Cu, Pb, Au and Ag. A combination of ordinary and multiple indicator kriging was used for Zn.
The resultant resource summary shown below was classified according to the JORC code.
Norrliden Resource Summary
Resource
Class |
Tonnes |
Zn % |
Cu % |
Au
g/t |
Ag
g/t |
Pb % |
Measured +
Indicated |
1,476,000 |
3.54 |
0.74 |
0.63 |
50.8 |
0.36 |
| Inferred |
867,000 |
1.87 |
0.72 |
0.40 |
30.9 |
0.19 |
The above resource conforms very closely with the global average grade for the Skellefteå Mining District: 161,000,000 tonnes @ 3.0% Zn, 0.7% Cu, 1.9 g/t Au, 47.0 g/t Ag and 0.8% Pb.
Work Plan - 2008
Lundin Mining/North Atlantic Natural Resources developed a work program for moving the Norrliden deposit through development and into exploitation. Gold-Ore engineers are reviewing that plan prior to implementation. The program is described below:
Test Pit
A 15 metre deep test pit will recover a bulk ore sample from the West Zone of the deposit. This sample will be sent to a nearby concentrating plant for custom milling. This sample will form the basis of a feasibility study.
The test pit requires the removal of 85,000 cubic metres of soil/till and the blasting of 165,000 tonnes of waste and 65,000 tonnes of mineralized material.
Revenues generated by this test pit are expected to cover the costs of extracting the sample.
Commercial Mining
An underground mining plan that anticipates a mining rate of 1,000 tonnes/day using sublevel stoping methods has been proposed. Mining and transport of the ore to the nearby processing plant would be carried out by contractors.
The total capital investment is small due to the proximity of Norrliden to a nearby processing plant. The main capital requirement is for the underground development and minor surface facilities that include office, dry and service garage. The low capital required and near-term production provides for rapid pay back and early free cash flow.
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