Northland Resources to fast-track Swedish iron-ore project

June 30, 2008

June 30th (Mining Weekly) – Vancouver-based Northland Resources, which last week published the findings of preliminary studies into its three most advanced iron-ore projects, plans to bring its Tapuli project, in Sweden, into production first, president Buck Morrow said on Monday.

With the highest internal rate of return and lowest capital cost of the three, at an estimated €146,6-million,“Northland believes Tapuli is the shortest route to production,” Morrow told investors on a conference call.

With the preliminary economic assessments complete for Tapuli, as well as the Stora Sahavaara project, in Sweden, and the Hannukainen iron ore deposit, in Finland, the company will now focus on securing the necessary permits for the operations, complete bankable feasibility studies and optimise the mining, processing and logistic plans for the mines.

Northland also expects to grow its resource base over the coming months, and plans to publish updated NI 43 101-compliant resource statements for each of the projects before the end of the year.

Based on the preliminary studies, the company hopes to eventually be producing at least 13-million tons a year of iron-ore, comprising of 3-million tons a year of iron-ore concentrate from Tapuli, 5-million tons a year of blast furnace-grade pellets from Stora Sahavaara, and 5-million tons a year of direct reduction-grade pellets from Hannukainen.

The company is also investigating a number of optimisations, including studying alternative transport methods to haul trucks for moving ore out of the open pits, using autogenous mills rather than the grinding rolls and ball mills envisaged in the preliminary assessments, and investigating the possibility of finding customers for pellet feed, rather than pellets, which would save it having to build one or more of the planned pellet plants.

The firm is also considering developing a complementary port at Kalix, in Sweden, which is a natural deep water port, Morrow said.

Capital costs for the mines will be lower than for many other new mines, because all three deposits are within 20 km or less of existing rail infrastructure and will be using the same transport infrastructure, he pointed out.

Northland originally published the results of the base-case preliminary economic assessment on June 18, but retracted the findings a day later, after a shareholder enquiry resulted in the discovery of errors in the economic model.

After some intensive number crunching, the firm republished the amended results on June 23.

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