GOLD EXPLORATION
AND MINING IN FINLAND
– AN OVERVIEW
28.12.2004
CONTENTS
PAGE
Introduction
3
I. Strong reasons to invest in the mining industry in Finland
3
II. Suurikuusikko / Riddarhyttan Resources AB
– a world class gold mining project
3
III. Agnico-Eagle Mines Limited – an investor’s perspective
6
IV. New technologies for the detox process
6
V. Mining in Finland
7
VI. Important players in mining
7
The Ministry of Trade and Industry (KTM)
7
The Geological Survey of Finland (GTK)
8
Finnish Industry Investment Ltd
9
Invest in Finland
10
2
Introduction
To call it a “gold rush” would perhaps be overstating the case. There is, however, no doubt
that gold exploration activity in Finland is booming, and with good reason. There are almost
two hundred known gold deposits in the country, a wide variety of information is available to
prospectors via the Internet – a unique exploration resource - and companies that have already
initiated operations are taking things very seriously.
This overview of gold exploration and mining in Finland starts by focusing on a specific
project, Suurikuusikko in the district of Kittilä in northern Finland, provides information about
this project and Riddarhyttan Resources AB, the operator concerned, then offers material about
mining in Finland and introduces some of the players in the industry: Finland’s Ministry of Trade
and Industry (KTM), the Geological Survey of Finland (GTK), Finnish Industry Investment Ltd
and Invest in Finland.
I. Strong reasons to invest in the Finnish mining industry
Put in the simplest-possible terms, there are good reasons: the geological potential, excellent
infrastructure and positive attitudes towards mining.
Finland offers the gold exploration industry a favourable investment and operating environment
with significant potential for new discoveries - many commodities are still very much underexplored. Present activity is concentrated in gold, platinum group metals, base metals, diamonds
and industrial minerals. Finland has excellent geological databases, good infrastructure, progressive
mining legislation and readily-available exploration services.
For companies considering gold mining, good infrastructure means real savings and makes
mining profitable in locations where wages are at European level. Finland has a mining tradition
and a qualified labour force. Interest on the part of municipal authorities and local residents is
high, and public-opinion surveys indicate that an absolute majority of residents are favourably
disposed towards mining. The Finnish government, regional, and local authorities are highly
committed to developing the mining industry. While legislation regarding mining is stringent,
Finland’s mineral-resources policy is well defined and a new fund for mining investment has
been established.
II. Suurikuusikko / Riddarhyttan Resources AB
The Suurikuusikko occurrence is located approximately 880 kilometres north of Helsinki near the
town of Kittila in Finnish Lapland. According to Riddarhyttan Resources AB, www.riddarhyttan.se, an
exploration company with operations in the Nordic region, “Suurikuusikko... is one of the largest, fully
permitted and unexploited gold deposits in the western hemisphere.” Kittila is serviced by daily flights
from Helsinki and the project has ready access to road, water, power and a skilled workforce.
The Suurikuusikko occurrence is said to be the company’s most advanced project. It is stated
that the tonnage amounts to 12.6 million tonnes (8.3 Mt indicated and 4.3 Mt inferred resources,
at 2.0 g/t gold as cut-off) with 5.4 grams gold per tonne (approximately 2.2 million ounces of gold).
3
On the 23rd June 2004, Riddarhyttan Resources announced that it has launched “an aggressive
exploration program” in Suurikuusikko, a 20,000-metre drilling programme that will continue
to test the downward extensions of the known mineralised zones within the detailed investigated
four-kilometre strike length.
During the second half of 2004, five diamond drill rigs will systematically test the down-dip
extension of open-ended zones of gold mineralization, exploring down to depths of approximately
600 metres with the intent of increasing the understanding and overall resource position. Further
exploration work is to be conducted within other areas of the more–than-18-kilometre-long
“highly-prospective” Suurikuusikko trend outside the main deposit area.
The primary areas of focus of the drill programme, during which 33 diamond-drill holes will
be completed, will include the Ketola, Etelä, Main, Southern Rouravaara and Northern Rouravaara
zones in which gold-mineralization continuity has previously been established down to maximum
depths ranging from 150 metres to 500 metres (in selected sections). According to Riddarhyttan,
the primary objective of the programme is to test gold-mineralization continuity at deeper levels
in the various zones in order to determine if there is justification to develop a more-robust bulk
underground mine than that previously envisaged.
Thus far the results of the drill programme have been positive. The Main Occurrence, which
was encountered with one hole at a depth of 500 metres, has proven to grade 4.4 grams of gold
per tonne and be 42 metres wide (including 10 metres with 9.7 grams gold per tonne). The hole
is one of the best so far intersecting the Western Zone.
Further exploration work is being conducted within other areas of the more-than-18-kilometrelong “highly-prospective” Suurikuusikko trend outside the main deposit area. One of these
areas is Iso-Kuotko situated in the northern part of the trend (approximately 10 km north of
Suurikuusikko). In order to investigate the four known gold-bearing zones and to identify new
zones with mineable grades and widths, possible to be mined in open pits and transported to
the planned process plant in Suurikuusikko, extensive exploration has been carried out within
this area during the summer and autumn of 2004.
Commenting on the activities at Suurikuusikko, Lars-Göran Ohlsson,
Riddarhyttan’s Managing Director, said “To date, with the drilling conducted
so far, we have established that the gold-bearing mineralized zones are
all entirely open at depth. With this exploration program focussed on
testing the upside potential on the deeper levels of the deposit, we will
increase our knowledge with respect to grade and continuity of these
zones.” He added, “This will serve to further lower the development risks
associated with the project while, hopefully, dramatically increasing our
resource and reserve base. We are pleased to have the support of AgnicoEagle Mines Ltd who recently acquired a 14% interest in Riddarhyttan
Lars-Göran Ohlsson
due to the similarities between the Cadillac-Bousquet Belt in north-western
Quebec, Canada, and the Suurikuusikko deposit in northern Finland.”
http://cws.huginonline.com/R/86971/PR/200406/950092_5.html
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Gold deposits in Finland
Source: GTK
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III. Agnico-Eagle Mines Limited
In the middle of May, Agnico-Eagle, www.agnico-eagle.com, a long established Canadian gold
producer with operations located in northwestern Quebec and exploration and development activities
in eastern Canada and the southwestern United States, announced the closing of its acquisition
of a 12.7 million common share block in Riddarhyttan Resources AB from the company’s largest
shareholder, the Swedish private company Dunross & Co. AB.
In an earlier press release (April 22 2004), Agnico-Eagle commented on what it termed Riddarhyttan’s
“principal asset”, a 100% interest in the Suurikuusikko gold deposit, saying that “Suurikuusikko
is an advanced exploration project located approximately 550 miles north of Helsinki near the
town of Kittila in Finnish Lapland”. According to Agnico-Eagle, “the Suurikuusikko property
has significant potential to host additional gold resources and if exploration and metallurgical
studies are successful, it also has the potential of hosting a mining camp similar to that in the
LaRonde-Cadillac area”.
See press releases in full: www.agnico-eagle.com
IV. New technologies for the detox process
On the 6th of July 2004, Riddarhyttan Resources announced that it has lodged a patent application for
an economically attractive and environmentally friendly detox process, the so-called “ROLB” process.
The new process removes WAD cyanide and thiocyanates from leach tailings and was developed
by Riddarhyttan personnel at the SGS Oretest Laboratory in Perth (Western Australia).
According to Riddarhyttan, the patent application resulted from extensive batch test work
followed by a continuous pilot plant test. In the pilot plant, the WAD cyanide concentration was
reduced from 1 000 mg/l to less than 0.25 mg/l and the thiocyanate concentration from 6 000
mg/l to less than 50 mg/l. The ROLB process is simple to operate and significantly cheaper than
alternate technologies. Estimates connected with exploitation of the Suurikuusikko occurrence
indicate that the cost of detoxing the cyanide leach tailing at will fall from USD 3-4 per tonne of
ore to USD 0.5-0.6 per tonne of ore.
Commenting on the patent application for the ROLB process, Riddarhyttan said that to date
no objections have been received and that a number of mining companies have expressed interest
in obtaining a license to use the ROLB process.
http://cws.huginonline.com/R/86971/PR/200407/951967_5.html
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V. Mining in Finland
Mining activity in Finland dates back to 1540 when iron-ore mining commenced, and some 270
metal mines have now been in operation with the main commodities being Cu, Ni, Zn, Co, Cr, Fe,
V. Well-established mineral processing and refining plants already exist in Finland for Cu, Ni, Zn,
Co, Cr & Fe ores as well as for phosphorus fertilisers, titanium pigments & coating carbonates.
In geological terms, northern Finland is dominated by a greenstone belt that stretches from
the Norwegian coast through Tornedalen in Sweden, into Finnish Lapland and then into Russia.
Potential for the existence of gold deposits is high as the greenstones are of the same age and type
as those in the large goldfields of Australia, North America and Africa.
For companies that are considering gold-mining activity in the northern Finland/Lapland region,
KTM, Finland’s Ministry of Trade and Industry points out that in contrast to comparable gold
regions in Africa, Australia and North America, where deposits may be situated many hundreds
of kilometres away in the wilderness, the supporting infrastructure in the area is very good. This
in turn means that mining costs will be low relative to production costs in areas where heavy
capital expenditure is necessary to make deposits accessible.
Summarising the situation regarding gold exploration and mining in Finland in September
2004, the ministry said:
• there is one gold mine in production (Pahtavaara)
• there are 461 valid gold claims, and some 400 claims for gold panning in Lapland
• there are several advanced projects which will probably become new gold mines
(Suurikuusikko, Jokisivu, Pampalo)
• that a number of new international companies have initiated exploration activities in
Finland in 2002-2004, and
• that political support (for a gold-mining industry) is strong.
VI. Important players in mining
Ministry of Trade and Industry
The Ministry of Trade and Industry, www.ktm.fi, grant reservations for claims, claims and mine
concessions. The environmental permits required before mining operations can begin are handled on
a case-by-case basis by environmental authorities. The principles on which this part of the process
is carried out are cooperation, client service, and flexibility. Compliance monitoring is intended to
halt pollution and eliminate harmful effects as quickly as possible.
Environmental legislation in Finland is strict, but can be coped with. Environmental permits are
valid for some years, and must be regularly updated via the submission of new applications.
The diagram below shows how non-ferrous exploration activities in Finland have increased over
the last eight years while global investigation has declined:
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Non-ferrous Global Exploration, in Sweden, and in Finland 1995–2003
Finland and Sweden left scale, Global right scale
million euros
million dollars
50
6000
5000
40
4000
30
3000
20
2000
10
0
1000
1995
1996
1997
1998
1999
2000
2001
2002
2003
0
For further information, contact
Krister Söderholm, Chief Inspector of Mines,
Technology Department, tel. +358 9 1606 3727, e-mail: krister.soderholm@ktm.fi
http://www.ktm.fi/index.phtml?menu_id=12&lang=3&fs=10
For an introduction to Finnish mining legislation, visit:
http://www.gsf.fi/explor/eco_legis_frame.htm
GTK (The Geological Survey of Finland)
The Geological Survey of Finland, www.gtk.fi, operates under Finland’s Ministry of Trade and
Industry. A modern research organisation that provides geoscientific information and services
essential for assessment of raw materials, environmental studies, construction and land-use
planning, one of GTK’s primary duties is to promote mineral exploration and mining in Finland.
Involved in projects of all sizes, GTK acquires data concerning prospects which is sufficient to
encourage further evaluation by the private sector. All prospects are tendered to the private sector
through the Ministry of Trade and Industry.
GTK has a staff of some 700 people and is internationally recognized for its pioneering in
granite research (since the organisation’s foundation in 1885), airborne geophysical surveying
(1951), chemical analyses of the first lunar samples (1970), regional geochemical mapping (1970s)
and application of geophysical methods for monitoring environmental impacts (late 1980s).
Commenting on gold in Finland, GTK summarises the position as “great potential – still
under-explored”. Expanding on this, GTK says “Gold deposits occur in Finland in both Archaean
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and Proterozoic domains, in all orogenic belts and in nearly all possible geological settings of
the igneous-metamorphic terrains. The main Au provinces are the Archaean greenstone belts in
eastern Finland, Palaeoproterozoic Karelian greenstone belts in Lapland, and the Palaeoproterozoic
Svecofennian schist belts in central and southern Finland. More than 150 hard-rock gold deposits
are presently known.” According to GTK, large parts of Finland are still under-explored for gold.
Up to 1990, only 40 deposits had been found and the first signs of gold mineralisation in the
Oijärvi Greenstone Belt were discovered as recently as 1996.
Established, maintained and continuously expanded by GTK, the FINGOLD database presents
data on all deposits in Finland where gold is the main commodity. It contains information on
location, holding, resources, exploration, ore mineralogy and composition, structure, alteration
and geological setting. There are more than 150 drilling-indicated deposits, which include 38
undeveloped deposits with a preliminary resource estimate, three deposits with pilot mining
(Juomasuo, Pampalo, Suurikuusikko) and five past producers
A unique feature of gold exploration and mining in Finland is the fact that the FINGOLD
database is published on the Internet and accessible to all at no charge.
For further information, please contact
Pekka Nurmi, Research Director, tel. +358 20 550 2325, e-mail: pekka.nurmi@gtk.fi
http://www.gsf.fi/explor/
http://www.gsf.fi/explor/eco_gold_frame.htm
Finnish Industry Investment Ltd
Finnish Industry Investment Ltd, www.industryinvestment.com, is a government-owned
investment company which engages in equity capital investment and invests in venture capital
funds, private equity funds and directly in selected target companies. Finnish Industry Investment
Ltd is administered by the Ministry of Trade and Industry and funded using the proceeds accrued
from the privatisation of state-owned companies.
The main objectives of Finnish Industry Investment Ltd are: to encourage more efficient functioning
of the venture capital investment market; to promote the productization and commercialization
of innovations; to promote regional venture capital investments; and to use direct investments
to enable major investments in corporate development, corporate restructuring and the launch
of new industrial projects.
To date, direct investments by Finnish Industry Investment in the development of mineral
resources have been of a limited nature. Recently, an initiative to pool institutional investments in a
new private equity fund has been undertaken with a view to meeting an increasing market appetite
for a wider range of funding avenues in the mining and minerals sector in northern Europe. The
operational launch of such a fund is envisaged for early 2005, with a primary investment focus
on Finland and Sweden. A broad range of metallic ores and industrial minerals will be covered,
with a clear investment focus on the upstream natural resources sector.
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Invest in Finland at your service
Invest in Finland, www.investinfinland.fi, is an expert service organisation promoting foreign
direct investment in Finland. With over a decade of experience in investment services we offer
an effective link between your company and the Finnish mining industry.
In addition to offering practical assistance in establishing operations in Finland, we provide you
with professional advice and support, including all the relevant information required to expand
your mining business into Finland. We have an extensive network of contacts and unique, indepth knowledge of local business sectors. We can help you find and contact the right commercial,
municipal and national organisations. Naturally, our services are free of charge and always tailored
to meet your specific needs.
If you have any questions regarding establishing a mining business in Finland, please contact
Taneli Saari, tel. +358 9 6969 2527, taneli.saari@investinfinland.fi.
Invest in Finland, Aleksanterinkatu 17 P.O.Box 800, FIN-00101 Helsinki, Finland.
Telephone +358 9 6969 125, telefax +358 9 6969 2530, e-mail info@investinfinland.fi, www.investinfinland.fi
The content of this paper has been supplied by a number of expert organisations. The Invest In Finland can not be held responsible for the accuracy of the information.
For further information, contact
Tuomo Mäkelä, Project Director, tel. +358 9 6803 6833
e-mail: tuomo.makela@teollisuussijoitus.fi