Background
The Svartliden Gold Project is located 700km north of Stockholm and west of the world class Skelleftea Mining District, in an area that is developing into a gold rich mineral province, referred to as the "Gold Line".
Svartliden ore is processed through a conventional comminution and leach (CIL) plant, with the design capacity of 300,000 tonnes per annum, which operates continuously.
Svartliden has produced 220,270 ounces of gold in total as at 31 March 2010.
Operation
Svartliden was brought into production in March 2005 and was the first integrated mine and treatment plant to be developed under the new Swedish Environment and Mining Acts.
The following table represents the Svartliden statistics for the project to 31 March 2010.
| December 2005-2007 | December 2008 | December 2009 | March 2010 | Total | ||
|---|---|---|---|---|---|---|
| Ore Mined | tonne | 885,399 | 333,555 | 347,031 | 74,223 | 1,640,208 |
| Waste Mined | tonne | 4,085,510 | 2,367,813 | 2,227,939 | 350,095 | 9,031,357 |
| Ore Milled | tonne | 869,661 | 280,062 | 337,945 | 84,193 | 1,571,861 |
| Head Grade | g/t | 5.07 | 5.36 | 3.90 | 3.73 | 4.79 |
| Recovery | % | 90.96 | 92.19 | 88.00 | 92.90 | 91.05 |
| Gold Produced | ounce | 129,007 | 44,495 | 37,400 | 9,368 | 220,270 |
| Cash Costs (including smelter costs) | USD/oz | 420 | 530 | 584 | 620 | 479 |
Outlook
Production in 2010 is expected to be 39,000 ounces of gold from 353,000 tonnes of ore at a head grade of 3.8 g/t and recovery of 91%. All ore will be sourced from the open pit.
An internal study has confirmed the viability of an underground mine operation, the objective to commence the portal and decline in mid-2010 and allow for a seamless transition from open pit mining to underground mining during early 2011.
An application for a new operating licence including the future underground mining operation and more rational environmental limits is being finalised and it will be formally lodged in the second quarter of 2010.
Development
Efforts continue to be directed towards defining the depth extensions of the Svartliden deposit, with view to proceeding to underground mining in 2010.
A further 35 diamond core drill holes and one re-entry diamond core hole were completed during 2009 for an advance of 7,840 metres. Numerous high grade intercepts including 5.00m @ 22.25 g/t gold, 6.00m @ 8.81 g/t gold, 11.00m @ 9.83 g/t gold, 5.00m @ 11.24 g/t gold, 8.00m @ 15.59 g/t gold, 5.00m @ 8.67 g/t gold and 5.00m @ 12.85 g/t gold were received, predominantly from the North Lode at the western end of the deposit.
In addition, drilling activities along the eastern strike extensions yielded very promising results, including an intercept of 5 metres @ 17.81 g/t gold. This intercept is located 65 metres below the planned limit of the current final open pit design in an area previously not drill tested, continuing to highlight the potential for higher grade mineralisation below the open pit.
An Indicated and Inferred Mineral Resource, reported above a 3 g/t gold cut-off grade, of 312,000 tonnes grading 7.1 g/t gold (71,400 ounces) for the western depth extensions was estimated by independent consultants Runge Limited, the result of a series of successful drilling campaigns undertaken since 2006. The underground resource is restricted by the limits of drilling, the model extending over 500 metres between local grid profiles 1375 and 1850 and includes a 150 metre vertical interval from the 410mRL to 260mRL, approximately 195 metres below surface.
The deposit remains open to the east and down dip and further drilling is planned to test for extensions.
Svartliden Gold Mine - Planned and Proposed Developments
A preliminary underground mine design and internal study has been completed. The study confirms the potential to mine and process 320,000 tonnes at a head grade of 4.3 g/t resulting in 41,000 ounces of recovered gold.
Further detailed work is now being performed with the objective to commence the portal and ramp decline in mid-2010. This would allow for a seamless transition from open pit mining to underground mining during early 2011. A permit for 1,000 metres of decline and 100,000 tonnes of test mining has already been obtained, and the application for a new operating licence that includes underground operations and revised environmental limits will be submitted during the second quarter of 2010. Negotiations are being conducted with mining contractors.
A resource update for the open-pit portion of the Svartliden deposit was also completed by independent consultants Coffey Mining Limited. This update returned an increase of approximately 35% in tonnes and ounces for the material above the defined sub-horizontal surface that divides open-pittable and underground material. This increase was largely derived from a minor increase in tonnes in the northwestern domain and an increase in tonnes in the eastern domain. As at 31 December, the open pit Mineral Resource for Svartliden, reported at a 1.3 g/t gold cut-off grade totalled 0.89Mt @ 3.20 g/t gold (92,200 ounces), inclusive of Reserves.
Sustained higher gold prices and better than expected grades in the eastern portion of the deposit has resulted in pre-stripping commencing for an extension of the open pit. This extension adds 145,000 tonnes of ore 2.5 g/t to the Reserve inventory.
Dragon Mining will now embark on an aggressive drilling campaign with the aim to significantly increase the Svartliden Resource and Reserve inventory and extend the mine life. It is planned for 22,000 metres of drilling to be completed over 12 months, targeting areas east and down dip of the existing underground resource. Drilling has commenced on the East Zone Open Cut Extension area, with a 4,600 metre drilling campaign. Programs further targeting the depth extensions of both the Main and Northern Lodes between 80 and 200 metres below surface will immediately follow.
Svartliden Resource Target Panels