Tertiary Minerals

Lassedalen Fluorspar project

The Lassedalen fluorspar deposit was mined on a small scale during World War II when it was developed to a depth of 40m below surface and fluorspar was mined from a 560m long drift for use in aluminium smelting.

The mine was dewatered in the 1970s by Norsk Hydro A/S when drilling was carried out from both surface and underground. Norsk Hydro estimated that the most intensively explored section of the steeply dipping Lassedalen vein contained 4 million tonnes of mineralisation, containing 1.2 million tonnes of fluorspar mineral at an average grade of 29% fluorspar (at a cut off of 20% fluorspar over minimum width of 2m). In March 2011 the fluorspar concentrate price for Chinese acid-spar (CIF Rotterdam) is US$460/tonne. Fluorspar mineral concentrate is currently priced at US$350-365 per tonne CIF Rotterdam. The tonnage was estimated from 25m below surface, allowing for a crown pillar, to an average vertical depth of just 200m below surface. Mineralisation is open at depth.

This tonnage-grade estimate was produced before the introduction of the Joint Ore Reserves Committee (JORC) standard classifications and was based on results from 28 diamond drill holes, which proved the vein over at least 2.7km strike length, as well as drill cuttings taken from holes drilled into the side walls of an underground mine level cut during World War II. This mine level, developed at an average depth of 40m below surface, was driven over a strike length of 560m almost entirely within the fluorspar vein. Assay plans are available for the drill cuttings and indicate, at the same 20% fluorspar cut-off, a 7m average width of fluorspar mineralisation along the full length of the underground drive. Significantly higher grade sections have been demonstrated - up to 6m grading 68% fluorspar- indicating the potential to define higher grade zones if required.

The Company holds exploration permits at Lassedalen that grant exploration rights to claimable minerals (those with a specific gravity of 5g/cm3 or greater) and the Company has secured exploration rights for non-claimable minerals (which includes fluorspar, specific gravity 3.2) from private land and mineral owners under new mining legislation introduced earlier this year.

The fluorspar exploration rights have been granted by the Norwegian Directorate of Mining and will expire at the end of 2016. There are no other ongoing costs to maintain the rights and no specific expenditure obligations.

This project has complementary characteristics to the Company's Storuman Fluorspar Project where a positive scoping study has been completed.

Where Storuman is a large low-grade deposit mineable by open-pit; Lassedalen is potentially much higher grade and would need to be mined by underground methods due to the surrounding steep topography. Subject to mineral processing testwork results, the Company believes the Lassedalen project may have potential to supply metallurgical-grade fluorspar for the European steel industry, a grade of fluorspar not targeted by the Storuman project, as well as acid-grade fluorspar.

Location

The deposit is less than 1km from highway E134 and approximately 40km from the nearest Norwegian port. It is well placed for European export markets as well as an important established market within southern Norway where fluorspar is used to manufacture aluminium fluoride for use in the large hydro-powered aluminium smelting and refining industry.

Mineralisation

In 2010 the Company located nearly 3.5km of drill core from 23 of the 28 diamond holes drilled at Lassedalen in the 1970s. This core will now be examined to determine if it can be re-sampled for further assay and metallurgical testwork with the objective to accelerate at low cost, the definition of a JORC compliant resource for the project and evaluate the suitability of the Lassedalen fluorspar for the different market sectors