Storliden ramp reaches first ore

A few months later than expected, the ramp at the Storliden copper-zinc project in Sweden has reached its destination, stretching 960 metres to provide access to the 1.8-million-tonne deposit.

The project owner, Swedish-based North Atlantic Natural Resources (NAN), which, in turn, is held 38% by each of Boliden (BLS-T) and South Atlantic Resources (SCQ-V) says the ramp entered the West zone orebody at a vertical depth below surface of 120 metres on March 22.

Mining and stockpiling of ore from the West zone will begin next week.

Development at the Storliden deposit aimed at cutting the high-grade ore of the Central zone in May continues, with commercial mining operations slated for start up by June 2002.

Ore from both the West and Central zones will be stockpiled at the mine site for subsequent processing at the Boliden mill just outside the town of Skelleftea, 90 km to the east.

The US$2.3 million in modifications to the Boliden mill, required for processing the high-grade Storliden ore, are on schedule and ready for testing in May 2002. Production is anticipated to build to a rate of 25,200 tonnes of zinc-in-concentrate and 11,150 tonnes of copper-in-concentrate annually over six years.

Capital costs are estimated at US$13.9 million, of which US$2.3 million will be used to modify the mill. Boliden is providing the financing and will be repaid out of 75% of the first year’s revenue.

Life-of-mine net profits are projected at US$59 million, two-thirds of which will accrue to NAN and the rest to Boliden. NAN is also entitled to a bonus of US$1 million and intends to recover US$5 million in exploration costs.

All financial estimates assume a copper price of US70 per lb., a zinc price of US40 per lb. and an exchange rate of Kr10.2 per US$1.

The first stream of revenue is expected to start rolling in during the third quarter of this year from the sale of copper concentrates to the Boliden Ronnskar copper smelter located near the port of Skelleftea and the sale of zinc concentrate to European zinc smelters.

Underground resources at Storliden are pegged at 1.8 million tonnes grading 10.3% zinc and 3.43% copper, plus 0.25 gram gold and 24 grams silver per tonne.

Boliden is acting as the project’s principal contractor during the construction phase and will operate the mine once it reaches production.