jork – complying technical report
Transcript of jork – complying technical report
UPDATED REVIEW OF THE MINERAL POTENTIAL OF THE PIILOLA GROUP
OF LICENCES, EASTERN FINLAND
Report Prepared for:
Mineral Exploration Network (Finland) ltd
Report Prepared by
SRK Exploration Services Ltd ES7493
Registered Address: 21 Gold Tops, City and County of Newport, NP20 4PG,
Wales, United Kingdom. SRK Exploration Services Ltd Reg No 04929472 (England and Wales)
Group Offices: Africa
Asia Australia
Europe North America South America
UPDATED REVIEW OF THE MINERAL POTENTIAL OF THE PIILOLA GROUP
OF LICENCES, EASTERN FINLAND
Report Prepared for:
Mineral Exploration Network (Finland) Ltd 28 Fidlas ave.,
Cardiff, CF14 0NY,
UK
SRKES ES7493
SRK Exploration Services Ltd. 12 St Andrews Crecsent,
Cardiff, UK
CF10 3DD
Tel: +44 29 20 233 233 Fax: +44 29 20 233 211
[email protected] www.srkexploration.com
FILE REF: MENFin_2013_FINAL_20130221 FEBRUARY 2013
Report Authors Reviewed by:
Bill Kellaway Gareth O’Donovan
SRK Exploration Services Executive Summary Page ii
Executive Summary
This report serves to update previous reports written by SRK ES on the mineral potential of the
Piilola licence group held by Mineral Exploration Network Finland (MEN).
During the 2012 field season the company has significantly increased its land holding
Intensive soil and till sampling, ground geophysical surveys which has formed the bulk of the
exploration to date was augmented by shallow inclined diamond drilling. On one of previously
identified targets a total of 545 m of drilling was carried out from 14 boreholes.
A total of 7 significant intersections were recorded ranging from 1.15g/t over 4.96 m to 5.22
g/t over 0.41 m.
The study area is dominated by a north /south shear and northwest trending cross cutting
faults. Gold anomalies and occurrences are located predominantly at the intersection of these
two structures. It is thought that the mineralisation may plunge towards the north-west. In
addition to the shear zone hosted mineralisation, the influence of the central intrusion with its
hornfels margin on the mineralisation is thought to be significant; indeed the geological model
that is being used in current and future exploration is the Intrusion Related Gold System
(IRGS).
The work conducted in 2012 has enhanced the anomalies already identified in previous
campaigns and the positive drilling results have enhanced the potential of the area.
Results of exploration carried out by Mineral Exploration Network (Finland) demonstrated the
existence of a large scale mineralised system which merits further exploration. The estimation
of the mineral potential of the Piilola group of the licences, made by MEN (Finland) in the
range of 3-5 Moz continues to be considered reasonable.
It is recommended that further drilling is conducted in the coming field seasons in order to
follow up on 13 identified targets. A bigger drill rig will allow deeper holes to be drilled as
well as facilitating the use of orientated core. The latter is important as mineralisation is
obviously structurally controlled. A proposed phased drilling program totalling 27,000 metres
is considered to be adequate to the type and size of targets.
Expected results of the drilling program are:
Fine turning of exploration model;
confirmation of intensity and scale of mineralisation; and,
assessment of inferred/indicated resources on limited number of targets to a depth up
to 100 metres.
SRK Exploration Services Ltd Table of Contents Page iii
Table of Contents
1 Introduction 1 1.1 Scope of work 1 1.2 Qualification of Consultants 2 1.3 Disclaimer 2
2 Finland 3 2.1 General information 3 2.2 Mining Industry 5 2.3 Mining Legislation 5
2.3.1 Pre June 2011 5 2.3.2 Post June 2011 6
2.4 Taxation 7 2.5 Geological overview 8
2.5.1 Archean history of the Karelian craton 9 2.5.2 Early Palaeoproterozoic rifting of the Karelian craton 10 2.5.3 Early Proterozoic Svecofennian domain 11
3 Licence locations 14
4 General Geology of the licence area and Historical Exploration 15 4.1 General Geology of the Kuhmo greenstone belt 15 4.2 Historical Geophysical Work 16 4.3 Historical Geochemical Exploration 20 4.4 Known gold occurrences in the licences extent 21
4.4.1 The Palovara gold occurrence 21 4.4.2 The Timola gold occurrence 23 4.4.3 The Naurispuro gold occurrence 24 4.4.4 The Iso Aittojiirvi gold occurrence 24 4.4.5 The Jousijarvi gold occurrence 25 4.4.6 The Mujesuo gold occurrence 28 4.4.7 The Piilola gold occurrence 28 4.4.8 The Hetteilä gold occurrence 29 4.4.9 The Louhiniemi gold occurrence 29
4.5 Interpretations of the historical exploration drilling results 31
5 Methodology of the MEN (Finland) Ltd. field work 34
6 Results of MEN (Finland) field work in 2010-2012 40
7 Exploration Model and Targets selection 47
8 Mineral potential of the area 53
9 Suggested Exploration Programme 56
10 Conclusions 58
11 Recommendations 59
SRK Exploration Services Report Distribution Record 60
SRK Exploration Services Ltd Table of Contents Page iv
List of Figures
Figure 2-1: Location of the project area 3 Figure 2-2: Simplified geological map of Finland and surrounding areas 8 Figure 2-3: Geological map of Finland and location of the Piilola licences 9 Figure 2-4: Known gold occurrences and deposits in Finland and location of Piilola
licences 13 Figure 3-1: Location of the MEN Finland claims and ore prospecting permits
applications 14 Figure 4-1: Simplified geological map of the Kuhmo greenstone belt 15 Figure 4-2: Aerial Geophysical Survey (Apparent resistivity) 17 Figure 4-3: Aerial Geophysical Survey (Electromagnetic survey – Real
Component) 18 Figure 4-4: Aerial Geophysical Survey (Total magnetic field) 19 Figure 4-5: Results of the geochemical survey carried out by GFS 20 Figure 4-6: Simplified geological map of the licence area and locations of the gold
occurrences (http://geomaps2.gtk.fi/activemap/) 21 Figure 4-7: Gold Concentrations in till and weathered bedrock samples taken in
the Palovaara area 22 Figure 4-8: Drilling profile at Timola gold occurrence 23 Figure 4-9: Gold and arsenic concentrations in till and weathered bedrock samples
taken at a detailed stage of sampling and drill hole sites in the Iso Aittojärvi area, Kuhmo 25
Figure 4-10: Gold and arsenic concentrations in till and weathered bedrock samples taken at a detailed stage of sampling and drill hole sites in the Jousijärvi and Mujesuo areas, Kuhmo. (Arsenic has not been analysed in the area east of Lake Jousijärvi.) 27
Figure 4-11: Gold and arsenic concentrations in till and weathered bedrock samples taken at detailed stage of sampling in the Louhiniemi area. 30
Figure 4-12: Bore holes cross sections on Piilola occurrences (GSF) 32 Figure 5-1: Keenengineering rotary crusher 34 Figure 5-2: Mobile field laboratory 35 Figure 5-3: Generalised soil profile 36 Figure 5-4: Hand held "Cobra” drill 36 Figure 5-5: Man Portable Ingetrol Explorer Drill Rig 38 Figure 5-6: Drill core (Drill hole MEN 037) 38 Figure 5-7 Work done by MEN (Finland) in 210-2012 39 Figure 6-1: Simplified geological model with main prospecting results 40 Figure 6-2: Geochemical anomalies in soil 41 Figure 6-3: Results of ground magnetic survey with As anomalies (>30 ppm) 42 Figure 6-4: Results of ground electro-magnetic survey (IP and resistivity) 43 Figure 6-5: Results of basal till sampling 43 Figure 6-6: Drill Hole Locations 44 Figure 6-7: MEN Finland drill holes logs 45 Figure 6-8: Spatial relation of GSF drill holes and major gold anomaly in basal till 46 Figure 6-9: Simplified model of gold mineralisation studied by drilling. 46 Figure 7-1: Generalised model of Intrusion Related Gold System (IRGS) 48 Figure 7-2: Conceptual Exploration Model of central part of the Piilola project 50 Figure 7-3: Target selections 52 Figure 8-1: Long Section of Pampalo deposit 53 Figure 8-2: Long section of Kittila deposit 54 Figure 8-3: Comparison of geochemical anomalies of Piilola with known deposits 54 Figure 9-1: Suggested drilling programme (stage 1). 57
SRK Exploration Services Ltd Table of Contents Page v
List of Tables
Table 2-1: Operating Mines in Finland 12 Table 6-1: Significant gold intersects in GSF and MEN Fin drillholes 45
Registered Address: 21 Gold Tops, City and County of Newport, NP20 4PG,
Wales, United Kingdom. SRK Exploration Services Ltd Reg No 04929472 (England and Wales)
Group Offices: Africa
Asia Australia
Europe North America South America
MENFin_2013_FINAL_20130221.docx February 2013
UPDATED REVIEW OF THE MINERAL POTENTIAL OF THE PIILOLA GROUP OF LICENCES, EASTERN FINLAND
1 Introduction
SRK Exploration Services Ltd (SRK ES) has been commissioned by Mineral Exploration
Network (Finland) Ltd (MEN (Fin)) to review the gold mineral potential of the Piilola group of
licences and comment on the exploration programme completed to date.
1.1 Scope of work
Based on the results of historical exploration carried out by the Geological Survey of Finland
(GSF) and intensive geochemical and geophysical work executed by MEN (Fin) it is believed
that the Piilola group of licences has significant potential for gold mineralisation and deserves
further exploration.
MEN (Fin) provided SRKES with historical exploration data and with data collected during
the 2010-2012 field seasons.
The data includes:
GSF reports and open publications
GSF primary data
MEN (Fin) primary data and interpretations
This report reflects the independent opinion of SRK ES on the gold mineral potential of the
Piilola licences and a suggested exploration programme. The opinion is based on a desk top
data review and discussions with the MEN (Fin) representative as well as site visits in 2011
and 2012 field seasons.
SRK Exploration Services Ltd
12 St Andrew’s Crescent
Cardiff
CF10 3DD
Tel : +44 29 20 23 32 33
Fax : +44 29 20 23 3211
www.srkexploration.com
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1.2 Qualification of Consultants
SRK ES is part of an international group (“the SRK Group”) that comprises over 1600
professional staff offering expertise in a wide range of engineering disciplines.
The SRK Group‟s independence is ensured by the fact that it holds no equity in any project
and that its ownership rests solely with its staff. The SRK Group has a demonstrated track
record in undertaking independent assessments of Mineral Resource and Reserve estimates,
project evaluations and audits, competent person‟s reports and independent feasibility studies
on behalf of exploration and mining companies and financial institutions worldwide. This
report has been prepared by Exploration Geology consultants sourced from the SRK ES office
in Cardiff (United Kingdom).
Neither SRK ES nor any of its employees involved in the preparation of this report has any
beneficial interest in the assets of MEN (Fin). SRK ES will be paid a fee for this work in
accordance with normal professional consulting practice.
The individuals responsible for this report have extensive experience in the minerals industry
and are members in good standing of appropriate professional institutions.
SRK ES‟s project team comprised:
Mr. Gareth O‟Donovan MSc, FIMMM, FGS, CEng. Principal Exploration Geologist,
Mr. Bill Kellaway MCSM, Principal Exploration Geologist.
1.3 Disclaimer
This report is the result of a desk study using data obtained through MEN (Fin) and other
public domain sources. SRK ES‟s opinions within this document are based on the information
available, plus previous experiences of the personnel involved in similar areas and geological
domains in Fenoscandia and around the world. SRK ES does not guarantee the legitimacy or
accuracy of any information utilised in this report that has been obtained from secondary
sources.
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2 Finland
2.1 General information
Finland is a mining-friendly country within the European Union that offers the exploration
industry a favourable investment and operating environment. It has significant potential for
new discoveries; many commodities are still under-explored. Finland is also close to major
markets and has processing facilities for a wide range of minerals.
Figure 2-1: Location of the project area
Current activity is concentrated on gold, platinum group metals, base metals, diamonds and
industrial minerals. Finland has excellent geological databases, good infrastructure,
progressive mining legislation and readily available exploration services.
Finland has been a member of the European Union since 1995. It has an advanced industrial
economy based on exports, with the metals, engineering and electronics industries accounting
for 50% of export revenues and the forest products industry for another 30%. As a result of
this industrial base, infrastructure is well developed over the entire country, even though many
areas are only sparsely populated. Finland has 5.2 million inhabitants, but they are spread out
over a country that is the seventh-largest in Europe (338,000km2), giving a population density
of only 17 persons/km2. Some two thirds of the population live in urban areas whilst the other
third reside in the countryside.
Finland is situated in northern Europe between latitudes 60o and 70
o N. However, the climate
is mild and temperate due to the Gulf Stream – there are, for example, no tundra or permafrost
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areas in Finland. A quarter of its total area lies north of the Arctic Circle. Finland has common
borders with Sweden, Norway and Russia and faces Estonia across the Gulf of Finland. Forest
covers about 7% of the country‟s surface area, making Finland the most heavily forested
country in Europe, with 23 million hectares of forests. The approximately 190,000 lakes in the
country cover almost another 10% of the land area and include some 180,000 islands.
Finland has one of the best performing economies in the European Union. This has largely
been driven by the demand for mobile telephones (Nokia). Finland has enormous intellectual
capital in this field. The population is highly educated with a western entrepreneurial outlook.
English is now the second language in all Finnish schools and now most people in Finland
speak English, with varying degrees of fluency.
Country risk is minimal as Finland is a modern western country and an active member of the
EU. Finland is a stable democracy and is strongly pro- Europe. It was the only Nordic country
to join the „Euro‟ system on its initiation in 1999. Inflation is low (1.3% in 2004), corporate
tax rate is 26% and GDP is growing at 3.8% p.a. Industrial activity is focussed on
telecommunications, metals manufacturing and timber and paper manufacturing.
Finland is regularly in the top five of surveys of competitiveness of various national
economies. Finland tops global surveys as the world‟s least corrupt country.
Finland has a well developed mining act which is generally pro-mining. Infrastructure is
excellent with sealed roads to all country sectors and an extensive network of well maintained
logging tracks. There are also a number of well serviced regional airports.
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2.2 Mining Industry
Finland has a long history of mining activity and metals production. Mining commenced in the
16th century and since then about 270 metal mines have been in operation, the main
commodities being copper, nickel, zinc, cobalt, gold, chromium, iron and vanadium. Mining
has provided the raw material base for the country‟s metal industry. There are major
processing and refining facilities for copper and nickel at Pori and Harjavalta (Boliden AB and
Norilsk), zinc at Kokkola (Boliden AB), cobalt at Kokkola (OMG Inc), stainless steel at
Tornio (Outokumpu Oyj) and at Raahe (Rautaruukki Oyj).
The major industrial minerals mined in Finland are carbonates, apatite and talc with processing
plants for fertilisers, titanium pigments and coating carbonates. Finnish metallurgical
technology and manufacturers of mining equipment, (Larox, Metso, Normet, Outotec,
Sandvik-Tamrock) are well known throughout the international mining community.
Finland has a long history of mining, metal and mineral processing and mining technology
with the geology similar to Canada, Australia and South Africa. Prior to becoming part of the
European Union in 1995, foreign companies were prohibited from holding mineral rights in
Finland and mineral exploration and mining was largely dominated by the State controlled
Outokumpu company. Finland has therefore missed out on much of the competitive
environment of the mineral industry and the increased exploration activity that emerged in the
mid 1980‟s.
Outokumpu‟s withdrawal from mining and the entry of Finland into the EU has only recently
opened the country to foreign companies. The competitive landscape in Finland is now
changing rapidly with numerous international companies active; Inco, BHP Billiton, Anglo
American and Gold Fields. The number of junior Canadian, Australian and UK companies is
also increasing.
2.3 Mining Legislation
2.3.1 Pre June 2011
Piilola North and Piilola South claim applications are processed according to the “old”
Mining Act which was in force until June 10th 2011.
Rights under old Mining Law were granted to every Finnish citizen or corporate body, to any
resident of the European Economic Area (EEA) and to all foreign corporations and
foundations established according to EEA laws and regulations. The Ministry of Trade and
Industry also routinely granted rights under the Mining Law to individuals and corporate
bodies from outside the EEA.
There were three types of mineral licences; these are reservations, claims and mining leases.
Claim Reservations covered an area up to 9km2 where a company has an exclusive right to
peg mineral claims for 12 months. Reservations were not transferable. Once a reservation has
been made over an area, a further reservation could not be made for a period of five years once
that first reservation has lapsed.
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Mineral claims may be pegged during the reservation period or in their own right without a
reservation. They run for three years plus two one year extensions and have an annual rental of
16 Euro/ha with another fee of 10 Euro/ha to the land owner. Mineral claims are transferable
and give the holder all access and exploration rights.
Mining Leases could only be applied for and granted if there is an identifiable mineral
resource on the property and run for 10 years before extensions. An application for a mining
lease must be accompanied by an environmental review.
There are no minimum expenditure requirements on mining leases or mineral claims and no
royalties payable to the Finnish government, however a quarrying charge is payable to the
freehold land owner. The amount payable to the land owner is negotiable and may be up to 1%
of the value of the ore extracted though generally does not exceed 50c/t of ore.
2.3.2 Post June 2011
Piilola-2 and all other newer applications in Piilola group were processed according to the
“new” Mining Act came into force on June 10th 2011.
Rights under new Mining Act can be granted only to Finnish legal entity or resident of adult,
legal age who is not declared bankrupt and whose competency has not been restricted under
the Guardianship Services Act (442/1999).
There are three types of mining licenses; Reservation Notification, Ore Prospecting Permit and
Mining Permit.
A Reservation Notification can be granted for a period of 24 months. There is no limit in
terms of area. Reservation Notifications cannot be applied over an Ore Prospecting Areas,
mining or gold panning areas. They also cannot be located at a distance of less than one
kilometre from such an area, belonging to a party other than the applicant. In addition, the
reservation notification cannot cover an area that has previously been a reservation area until
one year has passed since the expiry or cancellation of the reservation decision. Payments for
Reservation Notification are as follows:
1) For areas less than 20 km2 – 700 Euros;
2) For areas 20-100 km2 – 1 200 Euros;
3) For areas more than 100 km2 – 2 000 Euros.
An Ore Prospecting Permit can be granted for a maximum of four years after the decision
has become legally valid. It may be extended for a maximum of three years at a time. In total,
the permit may remain valid for a maximum of 15 years. The Ore Prospecting Permit is
transferable and gives the holder all access and exploration rights.
The holder shall pay an annual compensation payment (ore prospecting fee) to the owners of
land included in the Ore Prospecting Area. The annual amount of the ore prospecting fee per
property shall be:
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1) 20 Euros per hectare for each of the first four years of validity of the permit;
2) 30 Euros per hectare per year for the fifth, sixth, and seventh year of validity of the permit;
3) 40 Euros per hectare per year for the eighth, ninth, and tenth year of validity of the permit;
4) 50 Euros per hectare for the eleventh and for further years of validity of the permit.
A Mining Permit after being granted remains valid until further notice. Such a permit can also
be granted for a fixed term, if this is justified in view of the quality and extent of the deposit,
the applicant‟s ability to meet the conditions for ensuring the commencement of mining
activities, and other factors that have emerged during processing of the application. A fixed-
term mining permit may remain valid for a maximum of 10 years after the decision has
become legally valid. It can also be extended for a further period, until further notice, or for a
maximum of 10 years at a time, insofar as it is still necessary in order to exploit the deposit,
and in consideration of other factors that have emerged in connection with handling of the
application. The Mining Permit holder shall pay annual compensation (excavation fee) to the
owners of land included in the mining area.
The annual amount of the excavation fee per property is 50 Euros per hectare. In addition, the
following shall be paid as an excavation fee:
1) 0.15 per cent of the calculated value of mining minerals included in the metallic mineral,
excavated and exploited during the year; considering the average price of the exploited metals
included in the ore during the year, and the average value of other products exploited from the
ore during the year;
2) Grounds influencing the financial value of the mining mineral, taking into consideration
reasonable compensation for excavated and exploited mining mineral other than metallic
mineral in accordance with:
a) An agreement between the property owner and holder of mining permit; or
b) Confirmation by the mining authority as applied for by the property owner or holder of the
mining permit.
2.4 Taxation
The Finnish tax system as it concerns MEN (Fin) is concerned with three types of tax:
1. Corporation taxes: The corporate income tax rate is 24.5%.
2. Value Added Tax (VAT) is levied at a standard rate of 23% (July 2010).
3. Dividend and Capital Gain Taxes: The income from dividends, rents, and capital gains
are taxed with investment income tax. The investment income is taxed at fixed rate of
30% or 32% for income that exceeds 50 000 Euros. The effective dividend tax rate
from publicly listed companies is 21% - 22.4% because of a tax credit of 30% for
dividends from listed companies. The tax credit for dividends from non-listed
companies varies depending on the corporate taxes paid. by the companies
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themselves and equity in the company. Part of the dividends may be taxed as earned
income in case the equity in a non-listed company is not sufficient.
2.5 Geological overview
Finland occupies the central part of the predominantly Neoarchaean and Palaeoproterozoic
Fennoscandian Shield, which is exposed over an area of more than 1 million km2. The bedrock
can be subdivided into three broad domains that have shared a common history since about 1.8
Ga. These three crustal units essentially comprise a Neoarchaean cratonic nucleus flanked on
both sides by Palaeoproterozoic mobile belts. The Kola–Lapland domain, to the NE of the
Karelian craton, records the amalgamation at around 1.9 Ga of several distinct crustal units of
both Proterozoic and Archean age, and is more characteristic of collisional tectonic processes.
In contrast, the Svecofennian domain, to the SW of the Karelian craton, is entirely
Palaeoproterozoic in age, and indicates relatively rapid formation and accretion of new crust
between about 1.97–1.80 Ga.
Figure 2-2: Simplified geological map of Finland and surrounding areas
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Figure 2-3: Geological map of Finland and location of the Piilola licences
2.5.1 Archean history of the Karelian craton
The Karelian craton is characterized by narrow northerly trending greenstone belts surrounded
by more extensive granitoids and higher grade gneiss domains. Although rocks up to 3.6 Ga
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are present throughout the craton, the earliest well-documented magmatic and metamorphic
event seems to have taken place at around 2.84 Ga. The lower metamorphic grade greenstone
sequences formed after this event, and were variably deformed and intruded by tonalitic to
granitic magmas between 2.75–2.69 Ga. The Kuhmo and Suomussalmi greenstone belts are
the most extensive and well preserved supracrustal units in the Archean of Finland, cropping
out over a strike length of nearly 200 km, though seldom exceeding 10 km in width. They both
contain abundant tholeiitic and komatiitic volcanic rocks, together with related intrusive and
subvolcanic cumulates, and lesser felsic volcanic and volcaniclastic units. In spite of complex
deformation, primary textures and stratigraphic relationships are widely preserved, permitting
detailed mapping and analysis of volcanic facies and hence providing a conceptual basis for
regional komatiite-hosted nickel exploration. The structures formed during and soon after the
ca. 2.70 Ga peak of the Neoarchaean orogeny host a number of orogenic gold occurrences in
all greenstone belts in Finland.
The Hattu schist belt, near the southwestern margin of the craton, in easternmost Finland,
represents a rather different kind of supracrustal sequence (compared to Kuhmo and
Suomussalmi) that records rapid crustal growth and deformation between 2.75–2.72 Ga. Felsic
volcaniclastic sediments in this belt, and lithofacies, as well as geochemistry of granitoids and
some basalts are consistent with a collision arc setting. Extensive, structurally controlled,
alteration systems have been delineated in the belt and found to contain numerous encouraging
gold targets.
Some indications have also been found for the presence of Zn and Ag mineralization within
felsic sequences, including the Taivaljärvi prospect in the Tipasjärvi greenstone belt,
immediately to the south of the Kuhmo greenstone belt. The overall potential for base metal
mineralization in late Archean supracrustal rocks of the shield has however, not yet been
adequately assessed. Soapstone deposits developed in ultramafic rocks also represent a
volumetrically minor but economically significant resource in several greenstone belts,
whereas the 2.6 Ga Siilinjärvi carbonatite, intruding the western edge of the craton, currently
represents Finland‟s second largest mining operation in terms of annual tonnage.
2.5.2 Early Palaeoproterozoic rifting of the Karelian craton
The northern part of the Karelian craton, particularly in Finnish Lapland, records a prolonged
and episodic history of sedimentation, rifting and magmatism throughout the Early
Palaeoproterozoic. The Lapland greenstone belt is the largest mafic-dominated province
preserved in the entire shield. A sequence of bimodal komatiitic and felsic volcanics dated at
around 2.5 Ga unconformably overlie the Archean basement and represent the onset of rifting.
Continued rifting of the Archean crust resulted in the widespread emplacement of gabbro-
norite layered intrusions between 2.45–2.39 Ga. These intrusions host the important Kemi
chromite mine, and also contain widespread PGE-Ni-Cu enrichment, which now are under
extensive feasibility studies. Terrigenous clastic sediments discordantly overlie these layered
intrusions, with further episodes of mafic magmatism recorded as sporadic lavas and sills
dated at around 2.2 Ga, 2.10 Ga, and 2.05 Ga. The latest stage includes the Keivitsa Ni-Cu-
PGE deposit and coincided with rifting and subsidence of the Karelian craton margin, recorded
by coarse clastic turbidites, carbonates, iron formations and finer-grained graphitic schists, the
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latter hosting the extensive, low grade Talvivaara nickel deposits. Mining started at Talvivaara
in 2007, and by ore tonnage it is now the largest mine in Finland. Rifting culminated in
extensive mafic and ultramafic volcanism within the Lapland greenstone belt and the
formation of oceanic crust at 1.97 Ga, fragments of which were subsequently thrust back onto
the Karelian craton as the Jormua and Outokumpu ophiolites, the latter being best known for
its Cu-Co-Zn deposits and chromian skarns.
2.5.3 Early Proterozoic Svecofennian domain
The plate tectonic paradigm has been widely applied in interpreting crustal growth,
deformation and metallogenesis in the Svecofennian domain. Northeast-vergent emplacement
of the Outokumpu ophiolite onto the Karelian craton foreland is inferred to record the initial
collision with Palaeoproterozoic micro continents and oceanic island arc(s), generating
primitive tonalites from a low-K tholeiitic source. Continued volcanism within the arc(s) at
1.92–1.90 Ga led to the formation of volcanic- hosted massive sulfide deposits, including the
Pyhäsalmi Zn-Cu mine, with hydrothermally altered host-rocks subsequently being
metamorphosed to distinctive cordierite-orthoamphibole lithologies. Reversal of subduction
polarity following collision, or a further arc-arc collision is invoked to explain the most
extensive phase of volcanism, magmatism and deformation in southern and western Finland
between 1.89–1.86 Ga. Ultramafic intrusions within reduced sedimentary sequences provided
an important setting for nickel mineralization, including the Vammala and Kotalahti nickel
belts. The gold potential of this region is also being increasingly recognized, with the currently
operating Orivesi mine possibly representing a metamorphosed high-sulfidation epithermal
deposit, whereas other, vein-hosted gold occurrences go into the orogenic category, and are
closely associated with major shear zones in the region.
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2.6 Gold in Finland
The main Au provinces in Finland are the Archaean greenstones in the east of Finland, Palaeo-
proterozoic Karelian greenstone belts in Lapland, and the Palaeo-proterozoic Svecofennian
schist belts in central and southern Finland. Refer to Figure 2-4
About 200 hard-rock gold occurrences are presently known. The currently operational mines
and deposits close to production shown at the Table 2-1 below.
Table 2-1: Operating Mines in Finland
Deposit (alternative name
in brackets) Ton
Au
g/t Other metals
Status of
development
Hannukainen 4.5 Mt*
166.2
Mt**
0.95
0.065
0.88 % Cu
35.1 % Fe, 0.17 % Cu
Mine, closed
Under exploration
Haveri 1.56
Mt*,
7 Mt***
2.8
1.47
0.39 % Cu Mine, closed
Deposit area under
exploration
Hosko (Valkeasuo) 0.13 Mt 9.9 Under exploration
Jokisivu 1.85 Mt 5.7 Mine, active
Juomasuo 0.86 Mt 5.2 0.15 % Co Test pit, under
exploration
Kivimaa 0.022
Mt 5.3 1.87 % Cu
Mine, closed; Under
exploration
Kopsa 25 Mt 0.57 0.18 % Cu Preliminary
feasibility study
Kuotko 0.29 Mt 3.6 Under exploration
Kutemajärvi (Orivesi) 1.2 Mt 5.7 Mine, active
Kaapelinkulma 0.18 Mt 4.1 Under exploration
Kutuvuoma 0.068
Mt 7.3 0.1 % Cu
Mine, closed, under
exploration
Laivakangas 16.9 Mt 1.6 Mine, active
Muurinsuo 0.923
Mt 1.4 Under exploration
Osikonmäki 2.2 Mt 3.1 Preliminary
feasibility study
Pahtavaara 3.5 Mt 2.92 Mine, active
Pampalo (Ilomantsi) 1.3 Mt 2.9 Mine, active
Pirilä 0.3 Mt 6.6 Under exploration
Saattopora 2.163
Mt* 3.3 0.24 % Cu Mine, closed
Kiitilä 35 Mt 4.7 Mine, active
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Large parts of Finland are still under explored, and new deposits are being discovered every
year. Essentially, many areas, both in the Archaean and Proterozoic domains of the country,
are still practically virgin regarding gold exploration.
Until 1990, only 40 gold deposits had been discovered. For example, the first signs of gold
mineralisation in the Oijärvi Greenstone Belt were discovered as recently as 1996.
Orogenic mesothermal mineralisation is the dominant type of gold occurrence in Finland.
Other genetic types include: 1) skarn or FeOx-Cu-Au, 2) metamorphosed epithermal, 3)
intrusion-related (non-skarn), 4) palaeoplacer, and 5) placer deposits. Orogenic lode-gold,
skarn or FeOx-Cu-Au and metamorphosed epithermal deposits have been mined. In addition,
placer occurrences are undergoing very small-scale exploitation activities.
Investment in gold exploration in Finland was very modest in the past. Increased exploration
activity since the 1990's has led to the discovery of more than 200 occurrences and the opening
of three mines. In addition, several deposits currently already in production, the most notable
of these being Kittila (Suurikuusikko) in central Lapland.
Presently, some of the gold deposits and prospects are held by mining and exploration
companies. However, there also are number of prospects and large prospective areas without
any licence holder.
Figure 2-4: Known gold occurrences and deposits in Finland and location of Piilola licences
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3 Licence locations
MEN (Finland) had applied for the Mineral Claims called Piilola-North and Piilola-South and
Ore Prospecting Permits called Piilola 2, Palovaara, Naurispuro, Yala-Vieksi and Teerisuo.
Refer Figure 3-1.
Figure 3-1: Location of the MEN Finland claims and ore prospecting permits applications
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4 General Geology of the licence area and Historical Exploration
4.1 General Geology of the Kuhmo greenstone belt
The Kuhmo greenstone belt is the largest Archean greenstone belt in Finland, being up to 10
km in width and more than 100 km from north to south, within the rural municipalities of
Suomususalmi, Hyrynsalmi and the city of Kuhmo.
Figure 4-1: Simplified geological map of the Kuhmo greenstone belt
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Based on isotopic and structural evidence, the felsic, intermediate and mafic volcanic rock
units at the margins of the Kuhmo greenstone belt may correlate with the 3 000 - 2 800 Ma
Luoma Group of the Suomussalmi greenstone belt. In contrast to the Suomussalmi greenstone
belt however, the oldest rocks in the Kuhmo succession are predominantly tholeiitic basalts
that have been metamorphosed to banded amphibolites (Figure 2-1). Felsic and intermediate
volcanics are associated with these early stage volcanics in the Ruokojrirvi and Vuosanka
areas. Contacts with surrounding granitoids and younger units of the greenstone belt are
tectonic or intrusive.
The central part of the Kuhmo greenstone belt consists of 2 800 - 2 750 Ma tholeiitic basalts,
tholeiitic layered sills, komatiitic olivine (+ pyroxene) cumulates and lavas, komatiitic basalts
and Cr-basalts. The most complete and best-preserved stratigraphic sequence is in the
Siivikkovaara and Ronkaperri area; elsewhere it is more difficult to correlate rock sequences
due to the effects of intense deformation.
Homogeneous, massive, NW-SE trending mafic dykes transect the Archean rocks of the
Kuhmo greenstone belt with sharply discordant contacts, which thus constrain the deformation
of the greenstones to late Archean time.
One of the most significant outcomes of the latest investigations was the recognition and
delineation of a major deformation zone transecting the greenstone belt from north to south,
accompanied by hydrothermal alteration and associated with numerous gold prospects
including, from north to south, Tammasuo, Palovaara, Timola, Iso Aittojiirvi, Pieni Aittojerui,
Jousijiirui, Mujesuo and Louhiniemi. In addition to the occurrences listed above, extensive
carbonation and disseminated sulfide mineralization is observed within a NW-SE trending
deformation zone passing through Petajaniemi, Poukama, Katajalahti and Hietaperri indicating
significant structurally focused fluid flow and gold mineralization potential.
4.2 Historical Geophysical Work
Various types of geophysical techniques have been effective in delineating rock units,
structures and hydrothermal alteration associated with mineralization. Airborne geophysical
data has been particularly important in defining the major N/S trending deformation zone
transecting the Kuhmo greenstone belt, which has a distinct spatial association with gold
(Figure 4-2 to Figure 4-4).
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Figure 4-2: Aerial Geophysical Survey (Apparent resistivity)
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Figure 4-3: Aerial Geophysical Survey (Electromagnetic survey – Real Component)
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Figure 4-4: Aerial Geophysical Survey (Total magnetic field)
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4.3 Historical Geochemical Exploration
Systematic geochemical surveys conducted by GFS in the Kuhmo greenstone belt delineated a
conspicuous, sharply defined anomalous zone for arsenic and more diffuse and discontinuous
gold anomalies which can be traced from north to south along the entire greenstone belt. This
anomalous trend was previously recognized in several places. Geochemical mapping showed
the continuity of this anomalous zone along the entire Kuhmo greenstone belt (Figure 4-5).
The detailed till geochemical surveys in the Kuhmo greenstone belt revealed numerous areas
that are potentially prospective for gold which deserve further exploration.
Figure 4-5: Results of the geochemical survey carried out by GFS
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4.4 Known gold occurrences in the licences extent
There are nine known gold occurrences in the licences extent; these are shown in the Figure
4-6 below. According to the Geological Survey of Finland, to be called an occurrence gold
mineralisation should be established in at least one borehole with intersection of 1g/t or more
for not less than 1 m or 0.5 g/t over 5 m.
Figure 4-6: Simplified geological map of the licence area and locations of the gold occurrences (http://geomaps2.gtk.fi/activemap/)
4.4.1 The Palovara gold occurrence
The Palovara gold occurrence was discovered during zinc exploration. The first indications of
zinc potential in the Palovaara area were found in 1987, when disseminated sphalerite was
noted in felsic volcanic intercalations within a predominantly mafic volcanic sequence. At the
same time, compact pyritic horizons with elevated gold concentrations were discovered within
banded iron formations in the same general area. Regional till geochemical surveys were
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undertaken from 1987 - 1989 after which, in 1990 and 1991, more detailed sampling was
carried out at Hannankyla and in the area between Palovaara and Kelosuo, as shown on the
map of gold distribution in till (Figure 4-7). The zone is represented by number of gold
anomalies. In 1990, four holes were drilled, with a total length of 289.1 m, with the aim of
determining the extent of anomalous gold contents in banded iron formations (BIF). The
highest gold contents analyzed from drill core (4.6 g/t and 3.1 g/t) were within the banded iron
formation. The BIF horizon can be traced by its geophysical signatures for a distance of more
than 10 km.
Figure 4-7: Gold Concentrations in till and weathered bedrock samples taken in the Palovaara area
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4.4.2 The Timola gold occurrence
The Timola gold occurrence is situated northwest of the city of Kuhmo, a kilometer south of
Harmankyla, to the east of the main road from Kuhmo to Hyrynsalmi. Tholeiitic volcanics
dominate in this area and are strongly deformed, commonly mylonitic, with a foliation trend
almost N-S (010° - 190°), which is sub-parallel to the general trend of the greenstone belt.
Nine diamond drill holes were drilled in 1995, totalling 582.50 m in length. A further twelve
holes (R374 - R385), totalling 915 m were drilled with the RC technique in 1997.
The dominant rock type hosting the mineralization is a mylonitic tholeiitic basalt which
usually shows evidence of intense hydrothermal alteration in the form of biotite, chlorite,
quartz, carbonate, sericite and less commonly, epidote. The more highly strained rocks tend
also to be more strongly altered, containing abundant biotite. Tourmaline is very common
within fracture networks and at the margins of quartz veins but also within the tholeiitic
basalts. Scheelite and fuchsite also occur sporadically within the altered rocks, though have
not been observed in direct association with gold.
The highest gold content analysed from drill core was 2.82 g/t and five one meter intervals had
Au concentrations >1.0 g/t. There was no obvious visible correlation between gold
concentration and rock type, intensity of deformation or degree of alteration. Arsenopyrite is
almost always present where gold is anomalous although because of its fine grain size it often
remains unnoticed. Arsenic also forms a distinct geochemical halo around the mineralization
and the Timola area is clearly anomalous with respect to arsenic in the regional till
geochemical survey data. Even economical gold mineralisation was not discovered yet there is
still potential for exploration within the cataclastic and mylonitic deformation zone, both to the
north and south of Timola.
Figure 4-8: Drilling profile at Timola gold occurrence
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4.4.3 The Naurispuro gold occurrence
During detailed geochemical surveying in 1996, 344 samples were obtained from the
Naurispuro area, including l22 samples from till, 210 samples of weathered bedrock and 12
samples of weathered material in till. The highest metal abundances analyzed were Ni = 1 580
ppm, Cr = 2 760 ppm, Zn = 1 390 ppm and Au = 956 ppb. A number of other samples yielded
Au concentrations of several hundreds of ppb or more, suggesting that the Timola anomalous
zone may indeed continue for several kilometres southwards to Naurispuro. The five holes
drilled at Naurispuro (total length 355.5 m) intersected mafic volcanics for the most part, with
sporadic intercalations of sulfidic and graphitic phyllites and cherts. The phyllitic units are
generally less than 5 m thick, with one exceptional unit at the bottom of one hole being 15 m.
Thin felsic units, possibly volcanic in origin, were also locally present. A single 2 m interval of
carbonated ultramafic rock was present in the upper part of one hole. The entire rock sequence
is dipping steeply eastwards (85°) or vertical. The prominent EM anomalies and the western
magnetic anomaly trend may both be attributed to sulfidic and graphitic phyllites. Sampling of
drill holes had returned following grades 3.73 g/t, 2.8 g/t, 1.9 g/t 1.9 g/t of gold for 1 metre
samples.
4.4.4 The Iso Aittojiirvi gold occurrence
Investigations into the gold potential of the Iso Aittojiirvi began in the early 1990's, when a
mylonitic deformation zone was found on the eastern shores of the lake, characterized by
quartz tourmaline breccias in strongly sheared chloritic schists, with local abundant
arsenopyrite. Two exploration trenches were excavated by GSF across this zone, with detailed
sampling. Three holes were drilled at the northeastern end of the lake and a further two to the
southeast of the nearby lake Pieni Aittojiirvi (Tenhola and Niskanen 2001).
Till geochemical surveys were conducted in 1994: out of a total of 233 samples, 112
represented till and 119 were from weathered bedrock and weathered till material. Anomalous
gold values were distributed extremely erratically and the highest value obtained was 174 ppb.
In contrast, arsenic abundances defined a distinct, sharply defined anomaly, along the eastern
shore of Lake Iso Aittojiirvi (Figure 4-7). Arsenic contents exceeded 80 ppm in many samples,
the highest value being 10800 ppm.
Six deep diamond holes were drilled in 1993 and demonstrated the extensive nature of the
hydrothermal alteration, characterized by biotite, chlorite and tremolite in mafic volcanic rocks
and an abundance of talc-carbonate veins typically 1-5 cm wide. Tourmaline was present in the
mafic volcanics as well as in the quartz breccias. Arsenopyrite was found both erratically and
abundantly in almost all rock types intersected. The drilling to the southeast of Pieni Aittojrirvi
revealed that felsic volcaniclastic rocks predominate in that area, alternating with carbonated
ultramafic rock intercalations. Arsenopyrite and tourmaline were also relatively common. Gold
and tellurium contents in drill core were however generally low, the highest values being Au:
395 ppb and Te: 262 ppb. Arsenic concentrations were high throughout the entire section
drilled; the highest value obtained being 26400 ppm. The highest Cu value analyzed, of 4580
ppm also occurred within this anomalous arsenic zone.
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Figure 4-9: Gold and arsenic concentrations in till and weathered bedrock samples taken at a detailed stage of sampling and drill hole sites in the Iso Aittojärvi area, Kuhmo
4.4.5 The Jousijarvi gold occurrence
The Jousijarvi area seems likely to represent a continuation of the Iso-Aittojarvi As and Au
anomalous zone, especially given the similarities in rock types and the nature of geophysical
anomalies between the two areas. A single hole was drilled beneath the lake (Pajunen 1990)
and intersected chlorite-biotite schists, amphibolites and more felsic schists and gneisses. As at
Iso-Aittojervi, intervals several meters thick of carbonated ultramafic rocks, and talc schists
were present. Tourmaline was widespread in quartz breccias as well as in both felsic and mafic
rocks. It is therefore apparent that a continuous anomalous zone extends from Iso Aittojiirvi
through Pieni Aittojdrvi to Jousijdrvi. The drilling was originally planned for clarifying
lithological relationships so no analytical data is available.
Geochemical sampling was done in two stages, to the east of Jousijarvi in 1991 and to the west
in 1994.The total number of samples obtained was 254, of which 172 were till samples, 58
were from fresh and weathered bedrock and the remaining 16 from weathered till material.
Metal abundances were abnormally low, which is partly due to the relatively small proportions
of bedrock and weathered bedrock and till material (only 22.8 % of the total number of
samples). This in turn was due to the stony and compact nature of the till in this area, which
made drilling to and sampling from the bedrock interface technically demanding. Despite this,
there is a clearly discernible N-S trending arsenic anomaly between Iso Aittojiirvi and
Jousijrirvi. The highest arsenic concentration analyzed was 6180 ppb. Gold abundances also
define a distinct anomaly to the east of Jousijarvi, with the highest value measured being 1020
ppb (Figure 4-8).
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During 1993, five holes were drilled and in 1996, four holes, making a total drilled length of
382 m. The holes were sited to the east of the main arsenic anomaly that passes through
Jousijzirvi, with the aim of intersecting the gold anomalies identified in till sampling. The
main rock types intersected were tonalite and felsic to intermediate volcanics, with occasional
garnet-bearing mica schist intercalations. Disseminated iron sulfides are common, but compact
sulfide bands are also present. Arsenopyrite is however, only occasionally present.
In one drill hole there was a 3 m intersection, in garnet-bearing intermediate volcaniclastic
rocks with a weak sulfide dissemination, in which gold abundances varied from 1 440 - 3 820
ppb. The highest arsenic content in this interval was 1 300 ppm.
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Figure 4-10: Gold and arsenic concentrations in till and weathered bedrock samples taken at a detailed stage of sampling and drill hole sites in the Jousijärvi and Mujesuo areas, Kuhmo. (Arsenic has not been analysed in the area east of Lake Jousijärvi.)
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4.4.6 The Mujesuo gold occurrence
The impetus for gold investigations in the Mujesuo area came from a mineralized sample
submitted to the GSF by Viljo Heikura in early 1993. The rock was a tremolitic quartz vein
which not only had an exceptionally high Au content of 850 ppm, but also anomalous Ag (25.4
ppm), Cu (1 500 ppm) and Pb (911 ppm). Visible gold was present in the sample, especially
along fractures.
Geochemical surveys were made in 1993 and 1994, with a total of 381 samples collected, of
which 204 represented till and 58 were from bedrock and weathered bedrock. Till stratigraphy
and clast transport and provenance was studied in detail in 1994, concluding that the till was
particularly sandy, and extremely compacted, and in places was formed as ablation moraines.
Gold abundances were very low, the maximum value being only 51.7 ppb. Arsenic values
were also low (Figure 4-8). Nickel abundances define a prominent and continuous anomaly
trend along the eastern edge of the survey area, with a maximum value obtained of 2050 ppm.
During 1994 and 1995, 77 holes were drilled at Mujesuo with a total length of 996.7 m. The
main rock types intersected were intensely chloritized mafic volcanics and amphibolites, and
some granitoids in the western parts of the area. Talc-carbonate schist intercalations within the
mafic volcanics were common, especially in the eastern part of the area. Tremolitic chlorite
schists were present in many drill holes, but no tremolitic quartz rock, equivalent to the gold-
bearing sample which had originally been submitted to GSF, was found. Both pyrite and
pyrhotite were abundant and chalcopyrite was sporadically present; arsenopyrite was however
absent.
Gold abundances in drill core at Mujesuo were generally low, although a single one metre
interval in one hole had a value of 9.06 g/t. This mineralized section consisting of radiating
crystal of tremolite and actinolite with chlorite and disseminated iron sulfide and chalcopyrite,
as well as rare grains (0.1 x 0.5 mm) of visible gold. Arsenic and tellurium abundances were
low throughout; the deformation zone containing abundant arsenopyrite and tourmaline that
can be traced from Iso Aittojiirvi to Jousijdrvi does not pass through Mujesuo itself, but is
located some 700 m to the east.
4.4.7 The Piilola gold occurrence
The study area is located in late archaean Kuhmo greenstone belt, 40 km NW of Kuhmo town.
Geophysical measurements were performed and a total 2741m were drilled in 34 POKA-drill
(combination of percussion and diamond drilling) holes during the years 2003-2005. The
bedrock of the study area consists mainly of graywackes, mica schists, mafic volcanics and
muscovite granite and dolerite dykes. The tectonics of the area is characterized by at least two
folding phases and prominent N-S shearing. The mineralized zone, associated with the shear
zone, is altered, silicified and sericitized. It contains arsenopyrite, tourmaline and iron
sulphides. The highest gold content were 17.3 g/t (exceptionally 0.5 m), 7.5 g/t, 6.6 g/t, 4.3 g/t
and 3.8 g/t in split drill cores 1 m in length. Gold content > 0.5 g/t was observed in 12 drill
cores. Some visible gold was observed in two drill holes. In northern part of the area, Likasuo,
a 20 m thick skarn horizon, consisting of quartz, wollastonite, grossularite and vesuvianite,
was found by drilling. Arsenopyrite bearing mica schist, in contact with the skarn, contains
sporadic gold 1-5 g/t.
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4.4.8 The Hetteilä gold occurrence
Hetteilä gold occurrence had been found as a by-product of the nickel exploration in 2006.
Gold mineralisation is controlled by a 5-9 m thick BIF unit and banded amphibolite in a
sequence of metasedimentary and tholeiitic to komatiitic metavolcanic rocks of the Vuosanka
area. The best gold grade was established at the BIF contact returning 1.6 g/t over 1 metre
4.4.9 The Louhiniemi gold occurrence
The prospecting studies at Louhiniemi gold occurrence began because of gold bearing
boulders (Au 2.800-5.06 g/t) were found on the western bank of the lake Kuivajärvi. Arsenic
values were also highly anomalous, corresponding concentrations being 16 000 ppm, 15 900
ppm and 42 000 ppm. These boulders were highly deformed and silicified amphibolites with
disseminated arsenopyrite, pyrrhotite and pyrite. All samples were located along the same
trend that controls the Iso Aittojarvi, Jousijarvi and Mujesuo gold occurrences. Ground
geophysical measurements, electromagnetic and IP, were carried out in the area. Till,
weathered bedrock and bedrock samples were collected from. 459 points by percussion drills.
Gold concentrations were low throughout, although a weak NW-SE trending anomaly was
discernible to the north of the Korkealehto farm, extending as far as the adjacent lake (Figure
3.2.1.8a). In contrast, arsenic abundances were highly anomalous, the maximum value being
1680 ppm and a prominent anomaly trend was defined along the eastern shores of the lake
Kuivajarvi. Seven drill holes were drilled in the area. Main rock types intersected by drill holes
were granite rich mica schists, metavolcanics and in the most eastern part serpentinites. N-S
trending arsenopyrite bearing zone was noticed to exist “under” the eastern part of the lake
Kuivajärvi. The highest gold concentration, of 6 200 ppb, with As 16 600 ppm in the same
sample interval, was in intensely sheared mafic volcanics, containing disseminated
arsenopyrite and chalcopyrite as well as pyrrhotite. The next highest anomalous value, of
0.938 g/t (with As = 11 200 ppm) was in a quartz porphyry dyke impregnated with pyrrhotite
and arsenopyrite. Elevated gold abundances were found throughout the drill core, in many
places being in the range 20 -100 ppb. On the basis of drilling, it is evident that the rock units
that can be traced through Kuivajarvi are consistently enriched in arsenic, and sporadically
contain high gold concentrations. The occurrence at Louhiniemi can be regarded as the
southwards extension and continuity of the anomalous Au and As zone at Jousijarvi and
Mujesuo gold occurences. The limited amount of drilling did not allow adequate assessment of
the significant magnetic and IP anomalies that can be traced as far as Kuivajarvi. It was
recommended to focus the follow up investigations on the south eastern part of the complex
geophysical abomalies.
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Figure 4-11: Gold and arsenic concentrations in till and weathered bedrock samples taken at detailed stage of sampling in the Louhiniemi area.
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4.5 Interpretations of the historical exploration drilling results
The Geological Survey of Finland (GSF) placed drill holes based on the results of geophysical
and geochemical surveys. Core diameter was 46 mm or less and half core was used for the
samples In most cases drill holes intersected mineralisation zones and occasionally returning
gold grade 1-5 g/t . It can be seen that almost all gold anomalies are well correlated in space
with arsenic anomalies. Arsenic anomalies are the same width as the gold anomalies or wider
and not all arsenic anomalies are correlated to gold anomalies. On the following diagrams
Figure 4-12 the spatial relation of the gold and arsenic grade is shown.
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Figure 4-12: Bore holes cross sections on Piilola occurrences (GSF)
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The absence of gold in some arsenic anomalies could be interpreted as absence of gold or poor
sampling quality due to lack of material. However the arsenic anomalies are highly
informative as indicators for the gold mineralisation and could be used to trace gold bearing
zones.
Unfortunately not all drill holes were sampled and a few drill holes were not sampled for the
full length.
The limited amount of surface geochemical sampling and drilling may not have fully assessed
the mineral potential of the area but it has provided enough information to warrant further
exploration.
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5 Methodology of the MEN (Finland) Ltd. field work
In May 2010 MEN (Finland) carried out a reconnaissance visit and general landscape
assessment of the Piilola group of licences and test sampling on the known gold occurrences.
Test sampling included boulder sampling and soil sampling the different soil horizons.
Test boulder samples have been sent to the Labtium laboratory (Kuopio, Finland) for gold
assays. Samples returned anomalous gold grade around the Piilola gold occurrences. Almost
50% of known gold occurrences in Finland were found by boulder and outcrop sampling. Thus
boulder sampling was accepted as a first pass prospecting method in the locations considered
to be prospective based on the exploration model, to prioritise detailed geophysical and
geochemical work. Boulder samples were crushed by a Keenengineering rotary crusher
(Figure 5-1) and analysed by portable XRF in the mobile field laboratory (Figure 5-2).
Figure 5-1: Keenengineering rotary crusher
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Figure 5-2: Mobile field laboratory
Test soil sampling was conducted over the gold occurrences at Pillola and Jousijarvi on
different soil profiles. Sampling was done on A, B and C horizons. Based on the results of the
orientation work a decision was made to use B horizon sampling (Figure 5-3)
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Figure 5-3: Generalised soil profile
After a reconnaissance visit and test sampling on the known gold occurrences and due to poor
outcrop, a decision was made to sample the “B” horizon with soil sampling followed by Basal
till sampling with a hand held “Cobra”drill.
Figure 5-4: Hand held "Cobra” drill
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Soil sampling was done on a grid 50-100 x 10 metres, basal till sampling on a grid 50-100 x 5-
10 metres. The high density of sampling is a function of high dispersion of the elements in the
glacier sediments and locates anomalies with a higher degree of reliability. Boulder sampling
was also conducted when they were encountered.
The results of previous exploration work concluded that arsenic is a very good indicator of the
gold mineralisation in the area although it is known that gold mineralisation does occur
without arsenic anomalies on the Mujesuo gold occurrence. All soill samples had been
analyzed in the field using a portable XRF analyzer INOVEX-ALFA.
All basal till samples after been analyzed in the field using a portable XRF analyzer were send
to external laboratory (LABTIUM) to analyze Au, Bi, Sb and Te.
The locations of samples were recorded with hand held GPS units (GARMIN 60CSX and
GARMIN 62). Based on control measurements, the sample location accuracy is approximately
5-12 metres. All information was transferred into data bases at the end of each day. Results
from XRF analyses were also ready the next day. All data was visualized using the desktop
mapping system MapInfo.
Geochemical surveys have been supplemented by ground magnetic surveys on grids 50 x 5
metres. Ground magnetic surveys significantly improve the resolution of the aerial magnetic
survey.
The most prospective areas selected as combination of soil geochemical anomalies and
interpretations of ground magnetic survey were covered with ground IP and resistivity surveys
with line spacing 50 metres.
Selected anomalies were tested with inclined diamond drill holes up to depth a of 60 metres.
MEN (Finland) used INGETROL EXPLORE portable drill rig (Figure 5-5) with core diameter
36 mm (Figure 5-6). Despite the small core diameter the decision was made to sample only
half core so that the other half core is available for futurel reviews by interested parties. Due to
the small samples size the results of gold assaying should only be considered as an indication
of gold mineralisation and may not be used for quantitative resource estimation.
Field work carried out during 2010-2012 seasons included:
Geological and landscape mapping
Boulders and outcrop sampling - 752 samples
Soil sampling at grid 50-100 x 10 metres– 50412 samples (including control samples)
Ground magnetic survey at grid 50 x 5 metres – 523 line kilometres
Ground electro-magnetic survey -97 line kilometres
Till sampling with handheld percussion drill “Cobra” with aim to test soil anomalies –
2038 samples
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Inclined diamond drilling (545 metres) with man portable drill rig Ingetrol Explorer
Figure 5-5: Man Portable Ingetrol Explorer Drill Rig
Figure 5-6: Drill core (Drill hole MEN 037)
The following figure (Figure 5-7) shows the distribution of the work done by MEN (Fin) in the
Piilola group of licences.
All basal till samples and selected soil samples have been analysed in the former GSF
laboratory “Labtium” (Kupio, Finland). Core cutting, core sample preparation and analysis has
been carried out in the ALS Geochemistry laboratory (Outokumpo, Finland). All analysis were
are subject to repeats and included the insertions Certified Reference Materials or standards.
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Figure 5-7 Work done by MEN (Finland) in 210-2012
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6 Results of MEN (Finland) field work in 2010-2012
The main output of the field work carried out was the delineation of complex geochemical
anomalies (Figure 6-1) in the subsoil horizon “B”. It is controlled by the fault zone on the
boundary of the greenstone belt and crosscutting structures NW orientations (Figure 6-1).
Figure 6-1: Simplified geological model with main prospecting results
The individual elemental anomalies are shown in Figure 6-2
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Figure 6-2: Geochemical anomalies in soil
The structures are clearly seen on the ground magnetic map (Figure 6-3) and results of IP and
resistivity surveys (Figure 6-4).
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Figure 6-3: Results of ground magnetic survey with As anomalies (>30 ppm)
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Figure 6-4: Results of ground electro-magnetic survey (IP and resistivity)
Verification of selected anomalies has been done by basal till sampling with the handheld
percussion drill (“Cobra”) (Figure 6-5) on lines across the main N/S trend.
Figure 6-5: Results of basal till sampling
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Results of basal till sampling delineated intense gold anomalies. Distribution of pathfinder
elements As, Bi, Sb and Te demonstrate clear zonation that could be related to the plunging of
gold mineralisation in the NW direction.
Figure 6-6: Drill Hole Locations
As MEN Finland had set up drilling department just in July 2012, prospecting drill holes of the
summer 2012 season had been placed to intersect gold mineralisation established by the
Geological Survey of Finland drilling programme with the aim to check quality of MEN
Finland drilling, compare MEN Finland results with GSF results and establish continuation of
gold mineralisation along the strike (Figure 6-6).
Results of the MEN Finland drilling returned encouraging results with gold grade comparable
with previously established by GSF. Each drill hole placed along mineralisation zone returned
gold grade more than 1g/t (Table 6-1) making strike established part of the gold mineralisation
zone about 300 meters (Figure 6-8). Gold mineralisation zone is represented by share zone
over different lithologies (Figure 6-7) with intensive pyrrhotite- arsenopyrite disseminated
mineralisation. Gold mineralisation is pinching out in southern direction. In the northern
direction mineralisation is still open. Mineralisation is open to the dip as well.
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Drill hole MEN 040 returned gold grade 3.7 g/t over 1.7 metres outside main mineralisation
zone. Gold mineralisation is associated with quartz veinlets in heavily altered granodiorites.
This mineralisation could be interpreted as sheeted veins similar to the intrusion related gold
systems (IRGS)
Figure 6-7: MEN Finland drill holes logs
Table 6-1: Significant gold intersects in GSF and MEN Fin drill holes
Company HOLE_ID FROM Metres Au g/t GTK R330 31.05 2.55 2.61 GTK R470 66.9 0.50 17.30 GTK R468 19.4 1.00 5.05 GTK R331 11.2 2.00 1.06 MEN MEN034 23.85 0.41 5.22 MEN MEN035 30.02 1.17 1.18 MEN MEN035 50.04 2.70 1.27 MEN MEN036 7.35 4.65 2.26 MEN MEN037 12.35 4.96 1.15 MEN MEN037 37.59 3.64 1.90 MEN MEN040 51.58 1.70 3.24
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Figure 6-8: Spatial relation of GSF drill holes and major gold anomaly in basal till
GSF drill holes where placed based on the limited results of basal till sampling but were
successful in the discovering gold mineralisation. The basal till sampling carried out by MEN
Finland in 2010-2012 has demonstrated that the gold anomaly is bigger than the original GSF
drilling showed and therefore presents more drill targets.
Figure 6-9: Simplified model of gold mineralisation studied by drilling.
Indeed further gold mineralisation could be discovered in the relation to the more strong gold
anomalies highlighted in the basal till and in the soil sampling conducted during 2012.
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7 Exploration Model and Targets selection
It is suggested that a Intrusion Related Gold System (IRGS) in combination with the
previously applied orogenic share zone hosted exploration model could be applied to the area
of study.
Intrusion-related gold systems (IRGS) are a relatively newly defined class of economically
important gold deposits based largely on well-studied examples in the Tintina Gold Belt of
Yukon/Alaska. Intrusion-related gold deposit models have been attributed to deposits in
Archean orogenic gold camps. These include Wallaby and some of the Golden Mile orebody,
both in the Eastern Goldfields province of the Yilgarn craton. Archean intrusion-related
mineralization is also noted to be associated with syenitic intrusions in the Abitibi belt of
Canada, and has long been considered by some workers to be related to felsic porphyries
throughout the Superior Province.
IRGS systems are characterised by a range of mineralisation styles, both proximal and distal to
the mineralising intrusion, as illustrated on Figures 1. These include:
sheeted veins and stockworks;
breccias;
disseminated structurally controlled deposits;
skarns;
replacements; and
distal base metal bearing fissure veins.
Despite the fact that the IRGS model is still evolving, the following distinguishing
characteristics, derived from well-understood deposits, can be used to differentiate it from
other gold deposit models:
Zoning-thermal gradients surrounding cooling plutons are steep, which results in concentric
metal zones that develop outward for a few kilometres, or just beyond the thermal aureole, of a
central mineralizing pluton. Orogenic gold deposits show little zoning, with the exception of
Hg- and Sb-rich zones in their epizonal parts.
Diverse deposit styles-fluids exsolving from cooling plutons are opportunistic and cool
quickly depositing metals in numerous available geological settings resulting in veins,
stockworks, skarns, replacements etc, characterized by a wide range of gold grades, but with
bulk minable volumes
present at sub-gram grades (e.g., Fort Knox). Sheeted veins-the most distinctive style of gold
mineralization in IRGS are sheeted arrays of parallel, low-sulphide content, single stage quartz
veins found over 10s to 100s of metres preferentially located in the pluton‟s cupola.
Metal associations –significant copper is lacking, associated plutons generate scheelite-rich
hydrothermal systems, but gold doesn‟t correlate with tungsten in the gold deposits.
Associated and gold-correlative Bi and Te geochemical signatures characterize intrusion-relate
mineralization, but are also a feature of numerous hydrothermal deposit types and thus are not
distinctive.
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The sheeted vein deposits are generally located on the margins or roof zones of small elongate
equigranular granodioritic to granitic plutons. These intrusions are typically metaluminous to
weakly peraluminous, calcalkalic, and subalkalic with inferred oxidation states straddling the
boundary between ilmenite-series and magnetite series (Lang et al. 2000).
It is suggested that pluton phases likely to exolve mineralizing hydrothermal fluids display a
number of the following characteristics: porphyritic textures, presence of aplite and pegmatite
dykes, quartz and tourmaline veins. Associated dykes of aplite and pegmatite, as well as
numerous mafic phases including lamprophyres, are common. . These deposits do not
commonly have extensive hydrothermal alteration systems surrounding them and are typically
restricted to narrow sericite-carbonate-feldspar alteration halos on the quartz veinlets.
However peripheral deposits and occurrences and hornfels zones in the mesozonal
environment can display a predictable distribution pattern (Figure 7-1). This pattern
significantly expands the exploration footprint of these deposits.
There is considerable, but predictable variation in the styles of mineralization and the
elemental associations of gold occurrences surrounding any individual pluton. These include:
intrusion-hosted sheeted and rarely stockwork auriferous quartz veins
(Au±Bi±W±Te). The intrusion-hosted ore assemblage contains high fineness gold
intergrown with bismuth- and tellurium-bearing phases, which locally are associated
with scheelite.
proximal, thermal aureole-hosted replacement, disseminated, and fracture controlled
mineralization occurs in metasedimentary or metavolcanogenic rocks (Au-As±Sb);
and fissure veins vary outward from Au-As to Au-As-Sb to Pb-Zn-Ag.
Figure 7-1: Generalised model of Intrusion Related Gold System (IRGS)
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The largest of IRGS are typically characterized as low grade bulk mineable sheeted vein
deposits such as Fort Knox (8 Moz) and Vasilkovskoe (12 Moz). Gold in these deposits is
generally free milling, non-refractory and associated with bismuth minerals. Tellurium and
tungsten are also common element associations. These sheeted vein deposits are generally
located on the margins or roof zones of small elongate equigranular granodioritic to granitic
plutons. These intrusions are typically metaluminous to weakly peraluminous, calcalkalic, and
subalkalic with inferred oxidation states straddling the boundary between ilmenite-series and
magnetite series(Thompson et al., 1999; Lang et al., 2000; Hart et al., 2000, 2002) .
Results of intensive geochemical exploration on Piilola project demonstrate very close
similarity to IRGS generalised model because of the following features:
a metal assemblage combining Au with Bi, Te, As, Sb with a low sulphide content
(<5%) and reduced ore mineral assemblage typically comprising arsenopyrite,
pyrrhotite and pyrite and lacking magnetite or hematite;
geochemical zoning centred on a central mineralising intrusion (Figure 7-1);
spatial relationship with moderately reduced intrusions;
restricted zones of hydrothermal alteration
Figure 7-2 shows conceptual exploration model of the central part of the Piilola project
demonstrating close similarity to the IRGS model.
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Figure 7-2: Conceptual Exploration Model of central part of the Piilola project
Based on the results of field work and conceptual exploration model thirteen individual targets
(Figure 7-3) have been selected for more detailed investigation based on the following criteria.
Gold anomalies in the basal till and soil
Intensive arsenic anomalies in soil and basal till
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Greenstone boundary and share zones reflected in the magnetic field
Crosscutting structures reflected in geophysical and geochemical fields
Nearby GSF drill holes with intercepts showing gold mineralisation
Mineralised boulders
Targets 1-7 form central “core” part of the project and selected as first priority targets.
Targets 1, 3 and 5 classified as potential share zone hosted (disseminated and fracture
controlled) mineralisation and characterised by intensive As soil anomalies as well as Au, Te,
Sb and Bi anomalies in basal till. Locations of anomalies are controlled by structures clearly
seen in geophysical fields – intersection of share zone on greenstone boundary with
crosscutting structures of NW orientation. Intersection of the structures and areas in close
proximity to intersections could control high grade gold mineralisation. These targets could
represent mineralisation similar to Pampalo and Kittila mines. Presence of gold mineralisation
at Target 1 is confirmed by drilling carried out by GSF and MEN. The fact that gold grade
could reach 3-5 g/t and up 17 g/t highlight potential for high grade mineralisation forming
steep dipping ribbon (pipe) stile mineralised bodies. Such type of high grade mineralisation
(Pampalo and Kiitila mines as example) has relatively small footprint and could be assessed
only by close space drilling. Targets 3 and 5 have geological, geochemical and geophysical
signatures similar to Target 1 making them very prospective for discovery of gold
mineralisation. Spatial extend of geochemical anomalies over Targets 1, 3, and 5 is
compatible with geochemical footprint of Kittila mine making exploration potential of the
targets and the level of several millions ounces of gold.
Targets 2 and 4 classified as potential sheeted veins mineralisation similar to Fort Knox
deposit and characterised by intensive Au-As anomalies in basal till and scheelite in rock and
till heavy minerals samples. Presence of gold mineralisation at Target 2 confirmed MEN
drilling. Drill hole MEN040 had returned gold grade 3.24 g/t over interval 1.7 meters. Gold
analysis for drill holes MEN041-MEN046 are pending. Expected style of mineralisation is
sheeted quartz veins and veinlets. Special attention should be paid to core recovery as gold
bearing veinlets could be subject of selective crushing that could lead to the low gold
recovery. Spatial extend of gold and As anomalies over Targets 2 and 4 is compatible with
footprint of Fort Knox deposit. It makes exploration potential of the targets at the level several
millions ounces of gold.
Targets 6 and 7 are represented by intensive Au, As and Zn anomalies in soil and basal till and
classified as potential Au-Ag-Pb-Zn veins. There were no historical drilling done in the extend
of the Targets 6 and 7. It is early stage to assess potential morphology and intensity of
mineralisation but the fact that area of the geochemical anomalies over targets 6 and 7 are
even larger than over targets 1-5 make its exploration potential very high.
Targets 8-13 are discovered at the end of the 2012 field season and required more geochemical
and geophysical studies that are planned for the beginning of the 2013 field season. The
surface area and intensity of geochemical anomalies in soil allow suggests that exploration
potential of the Targets 8-13 is comparable with potential of the Targets 1-7.
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Figure 7-3: Target selections
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8 Mineral potential of the area
MEN (Fin) have based their assessment of the gold mineral potential of the Piilola group of
licences by comparison with known gold deposits in Finland and based on the conceptual
exploration model outlined in the previous section.
One of the known orogenic share zone hosted gold deposits in Eastern Finland is Pampolo,
which is located in the central part of the Karelian Gold Line, Ilomantsi Greenstone Belt, and 5
km north of the village Hattuvaara(Figure 8-1).
Outokumpu Mining carried out some test mining in the deposit, first in 1996 as an open pit and
later in 1998-1999 to a limited extent underground, down to a depth of approximately 100
metres. The mined ore was transported 400 km to both Vammala and Pyhäsalmi for
beneficiation. The mining totalled 114,372 t with the average gold content of 15,3 g/t. The
produced amount of gold was 1,755 kg.
The gold anomalies around Pampolo deposit are comparable in size and intensity with
anomalies at the Piilola group of licences.
Figure 8-1: Long Section of Pampalo deposit
An estimate of mineral resources in Pampalo deposit, carried out in 2009, resulted in 225 000
oz measured, indicated and inferred mineral resources with average grade 4.5 g/t of gold.
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The biggest known orogenic gold deposit in Finland is Kittila mine. Kittilä mine in northern
Finland achieved commercial production in May 2009. Proven and probable gold reserves
total approximately 4.9 million ounces from 32.7 million tonnes grading 4.6 g/t.
Figure 8-2: Long section of Kittila deposit
Comparing the size of mineralisation of known orgenic gold deposits with the type of
geochemical anomalies of Piilola group of the licences it could be concluded that Piilola
mineral potential is comparable to one „Kittila‟ deposit or to three „Pampalo‟ deposits.
In addition, according to conceptual IRGS model, it is thought that the Fort Knox deposit
could serve as a comparator.
Figure 8-3: Comparison of geochemical anomalies of Piilola with known deposits
The Piilola group of licences could contain disseminated and veining zones of gold
mineralisation with average grades of approximately 1-2 g/t and a limited amount of localised
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higher grade mineralisation with gold grades up to 10-15 g/t. Grade assessment is based on
results of drilling performed by GSF and MEN Finlad as well as on analogy with other
deposits with similar genesis.
Thus the preliminary estimated mineral potential of the Piilola is between 3 – 5 Moz, and
could conceivably be much higher. This assessment based on the scale of geochemical
anomalies, compareson with similar known gold deposits and the limited but significant
drilling results.
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9 Suggested Exploration Programme
Due to the fact that outcrop is limited and most of the area is covered with glacial sediment the
only way to establish the presence of economic gold mineralisation and therefore properly
assess the gold potential is by drilling.
The exploration programme for the next stage (2013) includes the following. Refer to Figure
9-1.
Conduct ground magnetic and IP/resistivity survey on the Targets 9-13.
Conduct “Cobra” sampling on the Targets 8-13.
Conduct systematic inclined diamond drilling to the depth 100 m along profiles across
the anomalies on the Targets 1-7 with profile spacing of 160 -320 metres. In total it is
planned to drill about 12 000 metres.
Infill incline diamond drilling to bring line spacing to 40 metres in the most
mineralised areas. In total it is planned to drill about 10 000 metres
Drilling to the depths 300-400 metres in selected locations to confirm extension of the
mineralisation. A total of 5000 metres is planned.
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Figure 9-1: Suggested drilling programme (stage 1).
All boreholes should be drilled at NQ (63mm) diameter. After core splitting, logging and
photographing half core will be crushed and samples will be sent for fire assay and multi
element analysis. At the same time crushed duplicates will be taken for heavy minerals
analysis and determination of the size of gold particles in order to establish the best sampling
practice.
The requirements of quality assurance and quality control (QA/QC) will necessitate the
permanent presence of geologist supervising the drill rig, logging and sampling The latter
will include the insertion of blanks and standards according to the best international practice.
During drilling and sampling the drill site will be visited by independent consultants.
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The outcome of the proposed exploration programme will be the assessment of the mineral
potential of the central part of the Piilola project and if results are positive and can be
correlated, the assessment of inferred mineral resources of selected targets.
The estimated budget for the first stage drilling programme is around 6.000.000 Euros. It
includes contract drilling at 100 Euro per metre, sample preparation and analyses at 40 Euros
per metre, geological support, transport and accommodation.
10 Conclusions
The results of the 2012 field season have been encouraging The applied exploration methods
are considered to have been cost effective and informative.
High density soil sampling has proven to be effective prospecting tool in the terrain found in
the Piilola project area. Soil sampling provided invaluable information on scale of
mineralisation and the structural controls. In 2012 MEN Finland significantly increased licence
holding and hence soil sampling coverage. The increase led to better understanding of the
mineralised system, scale of mineralisation and review of exploration model. The application
of the Intrusive Related Gold System model has highlighted the potential of shallow gold
mineralisation represented by sheeted quartz veins in the central intrusion of in the hornfels
This increases the exploration potential of the project.
High density soil sampling compensated for high variability of distribution of the elements in
the glacier sediments. The key factor in its success in application of soil sampling is quick
turnover in terms of the analytical services. Till sampling with motorised hand held percussion
“Cobra”drill further delineated the mineralised zone. Detailed ground magnetic and electro-
magnetic (IP/Res) surveying provided valuable structural and lithological information. In 2012
shallow incline diamond drilling served to confirm and delineate gold mineralisation. A man
portable drill rig producing 36mm diameter core was used and proved adaptable to the
sometimes difficult ground conditions.
Results of exploration carried out by Mineral Exploration Network (Finland) demonstrated
existence of large scale mineralised system that deserves further exploration. The estimation of
the mineral potential of the Piilola group of the licences, made by MEN (Finland) in the range
of 3-5 Moz continues to be considered reasonable.
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11 Recommendations
Exploration should continue at the property.
Further diamond drilling of the 13 targets identified in this report is justified.
Diamond drilling should be done using a bigger, more powerful drill rig producing larger core.
Orientated core and downhole deviation survey should be used in the next drilling stage so
that the structures can be correlated and interpreted better.
For and on behalf of SRK Exploration Services Ltd
William F Kellaway,
Principal Exploration Geologist,
SRK Exploration Services Ltd
Date: 21/02/2013
Gareth O’Donovan,
Principal Exploration Geologist,
SRK Exploration Services Ltd
Date: 21/02/2013
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SRK Exploration Services Report Distribution Record
Report No. ES7493
Copy No. FINAL
Name/Title Company Copy Date Authorised by
Alexander Mikhailov MEN Finland 1 21/02/2013 G. O‟Donovan
Alexander Luzhin Bamburg 1 21/02/2013 G. O‟Donovan
Approval Signature:
This report is protected by copyright vested in SRK Exploration Services Ltd. It may not be
reproduced or transmitted in any form or by any means whatsoever to any person without the written
permission of the copyright holder, SRKES