Lassedalen
Location map

Location map

Old mineral dressing site

Old mineral dressing site

Old mine workings

Old mine workings

Landscape over Lassedalen

Landscape over Lassedalen

Lassedalen block model

Lassedalen block model

Schematic plan of stope layout

Schematic plan of stope layout

Schematic

Schematic

Schematic

Schematic

Schematic

Schematic

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Lassedalen

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Lassedalen Fluorspar project

The Company holds exploration permits at Lassedalen which 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 in 2010.

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 and 29 diamond drill holes were drilled at surface as well as a series of percussion drill holes underground.

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

Mineral Resource Estimate

In January 2012 SRK completed a maiden JORC compliant Mineral Resource Estimate for the Lassedalen Fluorspar Project. Further details may be found in the RNS dated 18th January 2012.

ClassificationMillion Tonnes(Mt)Fluorspar (CaF2)
Inferred4.0024.60

The Mineral Resource Estimate is based on a database which includes geological and other data from 29 surface drill holes drilled by Norsk Hydro A/S in the 1970s, historic assay data from 26 of these holes and more recent assay data generated by Tertiary Minerals plc from re-logging and re-sampling of 23 of the surface drill holes carried out in 2011.

By definition, a Mineral Resource must have reasonable prospects for eventual economic extraction and portions of a mineral deposit that do not have such prospects must be excluded from the estimate. The assay data from core-resampling and historic assaying was used for block grade estimation. To determine which parts of the mineralisation can be included in the final Mineral Resource Statement, the resulting blocks have been subjected to a Mineable Shape Optimiser (MSO) study (Datamine’s floating stope optimisation programme). The table below shows the assumptions applied to the MSO.

ParameterUnitChosen Value
Mining CostUS$/tonne20.00
Processing CostUS$/tonne11.00
G&A CostUS$/tonne4.00
Total Ore CostUS$/tonne35.00
CaF2 Price (Mine Gate)US$/tonne350.00
Process Recovery%89.00
Calculated Cut-Off GradeCaF2%11.00

A mine-gate fluorspar price of US$350/tonne is estimated by the Company to be roughly equivalent to US$380/tonne delivered (CIF) into Rotterdam. The CIF Rotterdam price in September 2012 was reported to be US$500-530/tonne published in Industrial Minerals Magazine.

Scoping Study Highlights

In August 2012 an independent Scoping Study was completed by Wardell Armstrong International Ltd (WAI). Further details may be found in the RNS dated 20th August 2012. The table below shows the key parameters of the financial model.

Total Ore Mined3,595,922 tonnes
Total Acid Grade Concentrate Produced662,685 tonnes
Life of Mine6.6 years
CaF2 Price (CIF Rotterdam)US$491/tonne
Initial CapexUS$77.8 million
Sustaining and Mine Closure CapexUS£9.1 million
Gross Revenue over Life of MineUS$325 million
Total Pre-Tax CashflowUS$95 million
Net Present Value (NPV) at 10% Discount Rate US$31.6 million
Pre-Tax Internal Rate of Return (IRR)20.20%
Payback34 months

Location

The Lassedalen fluorspar project is located in Southern Norway, 80km southwest of Oslo and 5km southwest of the historic silver mining town of Kongsberg. The project is located adjacent to the E134 highway which connects the project to the sea port of Drammen 50km to the east.

Mining

A mining rate of 543,000 tonnes of ore per year was used to attain a target output of 100,000 tonnes per year of acid grade fluorspar concentrate. The mining method chosen for the Lassedalen deposit is sub level open stoping and the mine would be owner operated. The mine will be a fully mechanised operation, utilising diesel powered load haul dumps and articulated haul trucks to haul the ore from the mine to a surface processing plant via an incline ramp.

Based on the SRK block model and assumptions of 10% mine dilution and 95% mine recovery, the processing plant will mill a total of 3.6 million tonnes at a head grade of 22.4% resulting in an initial mine life of 6.6 years.

Mineral Processing

WAI has carried out a programme of metallurgical testwork (bench scale) during which acid grade fluorspar concentrate has been produced. The testwork formed the basis of the mineral processing flowsheet used in the Study. The Lassedalen ore is envisaged to be processed using three stage crushing, ball milling, pre-flotation of the sulphide minerals and flotation of the fluorite to produce acid grade fluorspar concentrate assaying 97.5% CaF2.

The estimated recovery of fluorite in the process plant will be 80.3% with the plant designed to treat 543,000 tonnes per year of ore on a 24 hour, 5 days per week operating schedule.

Project Risks

The technical economic evaluation presented in the Study is based on an Inferred Mineral Resource classification and should be considered preliminary in nature and there is no certainty that the economic forecast will be realised. Capital and operating costs are also preliminary in nature and may vary once further metallurgical testwork is undertaken and quotations from suppliers are received.