Background
The Svartliden Gold Mine is located 700km north of Stockholm and south west of the world class Skellefteå Mining District, in an area that is developing into a gold rich mineral province commonly 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. It operates continuously throughout the year.
Svartliden has produced 230,363 ounces of gold in total as at 30 June 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 30 June 2010.
| December 2005-2007 | December 2008 | December 2009 | June 2010* | Total | ||
|---|---|---|---|---|---|---|
| Ore Mined | tonne | 885,399 | 333,555 | 347,031 | 176,409 | 1,742,394 |
| Waste Mined | tonne | 4,085,510 | 2,367,813 | 2,227,939 | 858,799 | 9,540,061 |
| Ore Milled | tonne | 869,661 | 280,062 | 337,945 | 170,396 | 1,658,065 |
| Head Grade | g/t | 5.07 | 5.36 | 3.90 | 3.84 | 4.76 |
| Recovery | % | 90.96 | 92.19 | 88.00 | 92.60 | 90.76 |
| Gold Produced | ounce | 129,007 | 44,495 | 37,400 | 19,461 | 230,363 |
| Cash Costs (including smelter costs) | USD/oz | 420 | 530 | 584 | 608 | 483 |
* Year to date
Outlook
Production in 2010 is expected to be 40,000 ounces of gold and 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 the second half of 2010 and allow for a seamless transition from open pit mining to underground mining during 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.
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 metres @ 17.81 g/t gold, 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.
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 currently restricted by the limits of drilling, the deposit remains open to the east and down dip.
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 the second half of 2010. This would allow for a seamless transition from open pit mining to underground mining during 2011. A permit for 1,000 metres of decline and 100,000 tonnes of test mining has already been obtained. Negotiations are being conducted with mining contractors, the contractors submitting bids in June. A decision to commence the underground development is expected in September.
Dragon Mining has now embarked 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 from March 2010, targeting areas east and down dip of the existing resource.
Drilling has been completed on the East Zone Open Cut Extension area. This 32 hole, 4,524.6 metres campaign has returned a number of significant intercepts, including intercept highlights 10m @ 14.87 g/t gold, 2m @ 27.56 g/t gold, 14m @ 3.21 g/t gold, 8m @ 3.25 g/t gold, 10m @ 2.91 g/t gold, 6m @ 3.03 g/t gold and 6m @ 3.01 g/t gold.
Svartliden Resource Target Panels
With the arrival of a second diamond core drill rig at Svartliden, both rigs are now drilling on the 25 hole, 4,645 metre Western Zone Depth Extension 80-200 campaign to further examine the western portion of the deposit below and adjacent to the existing underground Indicated and Inferred Resource. The first results from this campaign are expected in August.