Lappland Goldminers presents results of prefeasibility study for the Fäboliden mining project
Lycksele, Sweden January 9, 2006, The prefeasibility study that was compiled by Outokumpu Technology indicates that gold, in the base case alternative, can be produced at a cost of about 30% of the gold price per ounce. This means that 85% of the world’s gold production is produced at a higher cost, according to statistics from Raw Materials Group for 2005.
- The prefeasibility study shows that we have a very strong project with low operating costs and a fast investment payback. When we have a concentrator on site, with low operating costs, the potential for additional profitable projects increases, says Karl-Åke Johansson, Managing Director, Lappland Goldminers.
Outokumpu Technology, which has extensive experience of mining projects in Sweden, has compiled the study which also includes sections that were completed by the company’s personnel, as well a number of national and international resources.
A summary of the results from the base case alternative:
- Production of 5 million tonnes of ore per year.
- Gold production of 310,000 ounces (9.6 tonnes) of gold per year.
- Estimated investment of SEK 1,125 million before financing costs.
- Operating costs for gold production are USD $149 per ounce.
- Estimated payback period is less than 2 years.
- Accumulated cash flow of almost SEK 3 billion, including investment costs and reclamation costs, but excluding financing costs and taxes.
- Estimated mine life for the initial open pit mine is 4.5 years, with good potential for extending both the open pit and continuing underground.
- Planned start of operations 2008/2009.
The calculations are based on metal prices and exchange rates as of December 16, 2005, when the gold price was USD $504 per ounce, the silver price was USD$8.56 per ounce, and the exchange rate was 7.9 SEK : 1 USD. An ounce of gold equals 31.1035 grams.
The base case alternative is based on a mineral resource of 22 million tonnes, mined by the primary open pit, with an average gold grade of 2.2 g/t Au. The mineral resource is estimated using a lower cut-off of 0.4 g/t Au and with an enumeration factor of 50%. This is according to the company an adjustifiable increase based on the yet not fully completed verification program. That indicate preliminary an anticipated increase in the gold grade by 30 to 82%, as has been indicated by early findings of the yet not fully completed grade verification program. The gold grade of the mineral resource may be either lower or higher than 2.2 g/t Au, as currently estimated by the company.
Lappland Goldminers has also drilled a few holes under the planned open pit and the results indicate that the gold-bearing zone continues at depth and may have higher grades than the open pit. In the future, the mine may potentially continue underground.
Lappland Goldminers is now continuing its work to obtain the permits necessary to begin work at Fäboliden.
The deposit at Fäboliden is located along the Gold Line in Västerbotten. Lappland Goldminers has many interesting projects on the Gold Line that have good potential to be developed into profitable mines.
For additional information, please read the entire report: www.lapplandgoldminers.com/pdf/Pre-feasibility_ENG.pdf
About the company:
Lappland Goldminers AB is an exploration company with the goal of becoming a producing mining company. The shares of Lappland Goldminers trade on the stock exchange “Nya Marknaden”, under the symbol GOLD. The company has secured a number of gold deposits along the Gold Line in Västerbotten. The company’s strategy is to develop a profitable producing gold company with a centrally located concentrator that is supplied by ore from one or several mines.
Lappland Goldminers is a member of SveMin, the association for mines, mineral and metal producers in Sweden (formerly the Swedish Mining Association), and applies their reporting rules for public mining and exploration companies.
The technical aspects of this press release have been compiled under the supervision of Karl-Åke Johansson, Managing Director of Lappland Goldminers, and Leif Carlson, consulting geologist and Director, both of whom are registered as Qualified Persons (QP) by SveMin.
- Contact Information
- Karl-Åke Johansson
- Managing Director
- Lappland Goldminers AB
- Contact via E-mail
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