Our projects

Fäboliden Mining and Beneficiation Project

Fäboliden, which is situated 40 km west of Lycksele, is the Company's flagship and most important deposit. The Fäboliden gold deposit is presently the second largest deposit in Fennoscandia, and one of the largest in Europe as well. The company is planning to establish a central processing plant at Fäboliden to process the ores from The Gold Line.

Exploration

Diamond drilling has been progressing in stages in Fäboliden since 1993 and as of 2006 includes 204 drill holes totaling 34,458 m distributed between the open-pit position, the underground mine, Northern and Southern Fäboliden and grade verification. Drilling has continued after the end of the period on the underground mine, Southern Fäboliden and for the grade verification, and as of 2nd half of 2007 comprises 256 drill holes totaling 46,893 m. Completed and current drilling aims at consolidating the ore reserves and mineral resources for the open-pit and underground mine in Fäboliden, and to investigate the continuation of Fäboliden to the south.

An extensive geophysical structural interpretation has been carried out of the area close to Fäboliden in 2006, in order to discover ore carrying structures. This study will continue during 2007.

Mineral resources

Calculations of the mineral resources completed in November 2004 arrived at a figure of 25.6 million tons with a grade of 1.39 g/t Au in the open-pit position as a "measured and indicated mineral resource" and an additional "indicated" mineral resource under the open-pit mine down to 350 m of 15 million tons with a grade of 1.5 g/t Au.

Extensive work has been carried out during 2005 and 2006, to verify grades, and to achieve the standard required by SveMin's regulations.

On February 23 the company for the first time presented an ore reserve for the Fäboliden gold project following SveMin's regulations. The proven ore reserve is 20.74 million tons with an average grade of 1.43 grams gold per ton, equivalent to 29.6 tons of gold (0.95 M Oz.) Out of this it is estimated that 86 %, or 25.43 tons, will be possible to extract after losses in the mine and in the processing plant. In addition to the proven ore reserve, the Company has a previous indicated ore resource from a depth of 200-350 m of 15 million tons with an average grade of 1.5 g/t equivalent to 22.5 tons of gold, of which 19.4 is estimated to be extractable.

The ore reserve is based on diamond drilling with a spacing of 50x 50-60 m in 24 profiles with 180 diamond drill holes totaling 23,000 m and 14,000 analyses and test mining of 1000 tons, pilot beneficiation tests including detailed process tests and a prefeasibility study. The final feasibility study, which is being carried out by Outokumpu Technology Oy, is in progress and is estimated to be completed during the second quarter of 2007. The ore reserve has been calculated in full compliance with SveMin's regulations in accordance with the Canadian regulations NI 43- 101, in all aspects applicable to Swedish conditions.

Test mining and grade verification

19 The test mining during 2005 of 1000 tons of ore for test concentrating resulted in considerably higher grades than expected from the diamond drilling. Due to this an extensive program was initiated to verify the gold grades at Fäboliden, in collaboration with SRK Consulting Ltd., an international consulting firm. The work has progressed during 2005-2006 and in December 2006 it was confirmed that the higher grades found during the test mining (which indicated a higher grade than that shown by the diamond drilling) were correct. Despite this the Company has not used any upwards correction factor for the ore reserve or the mineral resource published in February 2007. The grade verification program has given much valuable information, which will be very helpful when mining at Fäboliden. At that point in time the actual distribution of the grade in the ore will become evident.