Source: GTK, Geological Survey of Finland
The Kittila mine is under construction on the Suurikuusikko gold deposit, located approximately 900 km north of Helsinki in the town of Kittila, in Finnish Lapland. Agnico-Eagle is comfortable operating in northern Finland, as the climate, topography, and geology are similar to the Abitibi region of northwestern Quebec where our current operations are. Production is expected to begin in September 2008. Kittila has probable reserves of 3.0 million ounces; 18.2 million tonnes at 5.1 g/t - open on strike and at depth.
The Suurikuusikko deposit was formerly owned by Riddarhyttan Resources, a Finnish mining company. In November 2005, Agnico-Eagle acquired the outstanding shares of Riddarhyttan that it did not already own. The acquisition is consistent with the company's strategy of creating value by leveraging its technical skills and building a larger, more diversified gold production base.
Construction is well underway on the Kittila mine (on the Suurikuusikko deposit) in northern Finland, approximately 900 kilometers north of Helsinki. The Kittila mine, named after the nearby community of the same name, will initially be extracted via open pit followed by underground mining via ramp access. The mining operation will feed a 3,000 tonne per day surface processing plant.
The feasibility study's base case projects an after tax rate of return of 15.0%, based on a gold price of $450 per ounce, and a US$/€ exchange rate of 1.20. Annual gold production is expected to average 150,000 ounces at total cash costs of $300 per ounce, with initial gold production occurring by the middle of 2008. The feasibility study anticipates capital expenditures of $190 million and incorporates minesite costs per tonne of $34 and sustaining capital expenditures of approximately $5 million per year. Current reserves are sufficient for an estimated mine life of 13 years.
Diamond drills are currently operating at the Kittila mine project and are focused on converting the large gold resource to reserve and on drilling the extensive land position along strike of the known gold reserve.
Riddarhyttan acquired the Suurikuusikko gold deposits from the Finnish government in 1998. Since then, the majority of the company's exploration ventures have been targeted in this area.
Unemployment in the district is high, making municipal leaders optimistic about future mining operations. The infrastructure in the region is good, with the road between Kittila and Inari passing through the southern section of the claimed area. The road can accommodate heavy transports throughout the year.
In January 2000, Riddarhyttan conducted a preliminary resource estimation ("inferred and indicated resources") in the Suurikuusikko field. The estimate amounted to 8.3 million tonnes with an average grade of 6.1 grams of gold per tonne. The positive results from rock chip samples in the southern section of the field led to additional areas being covered by claim reservations. By the end of the year, Riddarhyttan had 22 claims for gold within the Suurikuusikko field.
Agnico-Eagle acquired a 14% ownership interest in Riddarhyttan in 2004, and in May 2005, announced a bid for all remaining shares of the company.
The gold mineralized zones in the Suurikuusikko field are hosted by a Greenstone Belt which extends from the Norwegian coast, through northern Finland and into Russia. The bedrock, which is over 2 billion years old, is dominated by different varieties of volcanic rock.
click thumbs to view larger image:
The gold at Suurikuusikko is refractory, meaning that it is mainly found in the lattices of sulfide minerals (arsenopyrite and pyrite). About 75% of the gold is bound in arsenopyrite and 23% in pyrite. What remains is "free gold," which is manifested as extremely small grains in pyrite. Most of the free gold is found in the outer, oxidized or eroded sections of the ore. Small amounts of copper pyrite, pyrrhotite, sphalerite, galena, gersdorffite, tetrahedrite, jamesonite, bornite, gudmundite and rutile are also present. The gold mineral deposit is intersected at several locations by small massive bands containing the antimony mineral stibnite.
Kittila 2007 Mineral Reserves and Resources*
|
Gold
(g/tonne) |
Silver
(g/tonne) |
Copper
(%) |
Zinc
(%) |
Tonnes
(000's) |
Gold Ounces
(000's) |
| Probable Reserve |
5.12 |
|
|
|
18,205 |
2,996 |
| Indicated Resource |
3.03 |
|
|
|
5,416 |
527 |
| Inferred Resource |
3.39 |
|
|
|
10,832 |
1,181 |