Outokumpu Copper Project
The Outokumpu Project is 100% owned by Altona and is situated within Finland’s premier mining district that gave rise to the major steel and process technology companies, Outokumpu Oy and Outotec Oy. The area has 100 years of mining history with three past major base metal mines in the area producing from 1914 to 1989.
Outokumpu lies some 400km northeast of Helsinki. Finland is a well performing euro zone economy and is one of the world premier mining investment destinations ranking ahead of most Australian and Canadian provinces in recent surveys.
The project has declared resources of 15.9 million tonnes of copper dominant polymetallic base metal mineralisation (copper, gold, nickel, zinc, cobalt) (including Kylylahti, Saramäki, Vuonos, Hautalampi and Riihilampi deposits) containing some 156,200 tonnes of copper and 32,300 tonnes of nickel.
A Definitive Feasibility Study was completed in August 2010 and construction of the project has commenced with first production envisaged in early 2012.
The initial development comprises the development of a new underground mine at the 8.4Mt Kylylahti copper-gold-zinc deposit with trucking of ore 43km to the Luikonlahti regional processing hub 100% owned by Altona. The established Luikonlahti Processing Plant treated Outokumpu type base metal ores for over 15 years and refurbishment of the plant has commenced.
Resources
Approximately 150,000 metres of diamond drilling has been completed and forms the basis for Resource estimates. For detailed Resource Estimates click here. The Kylylahti deposit and surrounding deposits (Saramäki, Vuonos, Hautalampi and Riihilahti) contain:
- 156,200 tonnes copper
- 27,800 tonnes cobalt
- 32,300 tonnes nickel
- 79,100 tonnes zinc
- A minimum of 183,600 ounces gold which was not always assayed
The deposits have unique geology being hosted in highly altered ultramafic rocks that have been subject to high metamorphic grades and polyphase deformation and as a consequence are much changed from their original configuration. A detailed description of the geology of the deposits is given in a report by Asko Kontinen of the Geological Survey of Finland (click here).
The Luikonlahti Processing Plant
The Luikonlahti processing plant was constructed in 1968 to process ore from the Luikonlahti copper-cobalt-nickel-zinc deposit. It processed 7.7Mt of copper-cobalt-nickel-zinc ore virtually identical in grade and metallurgical characteristics to the Kylylahti deposit for 15 years, until the mine was exhausted. It subsequently treated talc ores producing both talc and nickel concentrates prior to being placed on care and maintenance in December 2006.
The plant will be configured as a primary rod mill and two secondary pebble mills, which will provide a throughput of 550,000tpa. The plant can be reconfigured as a primary ball mill and two secondary ball mills to provide a throughput of 1 million tonnes per annum. Valuable metals occur in coarse grained sulphide minerals which are easily recovered by flotation.
The plant is on national grid power, has all water supply for its requirements, sealed road to the plant gate, rail to the concentrate loading facility (the last 1.5km require refurbishment). The plant is permitted with an environmental security deposit facility lodged. A number of minor amendments to the current permit are required and are expected to be in place in early 2011.
Luikonlahti is located 43km on sealed public roads from the Kylylahti Mine and was purchased from a bankruptcy estate in January 2010.
Definitive Feasibility Study
The Company completed a Definitive Feasibility Study for a 550,000 tpa underground mining operation at Kylylahti and the refurbishment of the Luikonlahti plant in August 2010. A summary of the study can be accessed by clicking here. The study is an update of a 2008 study by SNC Lavalin and the Company on a stand-alone mine and new processing plant at Kylylahti
Ore Reserves
Ore Reserves at Kylylahti total 4.3 Mt grading 1.6% copper, 0.7 g/t gold and were estimated by consultants Optiro.
A 550,000 tonne per annum underground mining operation is being constructed. Access will be via a 5m by 5.5m decline tunnel and mining will be via drill and blast long hole open stoping with voids filled by cemented waste rock. Ore will be initially transported to surface by modified road trucks to a pad where road trucks will transport ore to Luikonlahti for processing.
Processing
Altona is in the process of completing detailed engineering work for refurbishing the Luikonlahti Plant. The major areas of refurbishment include electrification, automation, slurry piping and tailings dam earthworks. Letting of these works have commenced.
The flowsheet chosen is similar to that employed when the plant treated Luikonlahti base metal ores and the suitability of the plant to treat Kylylahti ore has been assessed based on extensive metallurgical testing and process engineering undertaken for feasibility Studies and the prior operating history of the facility. The plant will produce the two concentrates for sale to international or domestic markets:
- 30-35,000 tonnes per annum of copper-gold concentrate grading 24% copper and 9g/t gold containing an average of 8,000 tonnes per annum of copper and 8,400 ounces per annum of gold
- 3,200 tonnes per annum of zinc concentrate grading 50% zinc containing an average of 1,600 tonnes per annum of zinc
In addition some 80,000 tonnes per annum of cobalt-nickel concentrate will be produced and held in temporary storage. The concentrate grades 1.2% cobalt and 0.57% nickel and contains an average of 940 tonnes per annum of cobalt and 450 tonnes per annum of nickel. Studies are in progress to investigate the production of a marketable high value product from this low grade concentrate.
Other Deposits: Hautalampi
The Hautalampi Project tenements cover the historic Keretti mine near the town of Outokumpu.
The deposit is 1km long, 100-150m wide and up to 30m thick. The bulk of the deposit is 70 and 120m below surface and there is potential to significantly increase the size of the Resource.
The best drill intercept is 30.4m at 0.62% nickel. The deposit represents the deformed low-grade halo to the main Keretti deposit which produced 28Mt at 3.4% copper, 0.9% zinc from 1913 to 1989.
Whilst the deposit is low grade, it is close to the Luikonlahti Mill and produces excellent concentrates of:
• A copper-gold concentrate grading 25% copper, 10 g/t gold
• A nickel-cobalt concentratae grading 8.0% nickel, 2.3% cobalt
Blending of Hautalampi ore feed with Kylylahti ore feed may improve the expected revenues of Kylylahti nickel-cobalt concentrates.
A feasibility study was completed by a prior owner on mining at Hautalampi concluded that:
• Pre-production capital costs would be approximately €6.5m (A$10.5m)
• Mobile equipment for mining approximately €5m (A$8.1m)
• Operating costs around €21.40/tonne (A$34.5/t)
Following an update and review of the Kylylahti DFS, Altona will consider bringing the Hautalampi Project into production at nickel prices in excess of US$8.50/lb and in year two to three of the Kylylahti operation.