KUUSAMO
Kuusamo Gold Project
In northern Finland, 700 kilometres northeast of Helsinki, the Kuusamo Gold Project covers 117km²of the highly prospective Palaeoproterozoic Kuusamo Schist Belt, a metamorphosed volcanic and sedimentary sequence that is well endowed with gold and cobalt mineralisation.
This project is an integral part of Dragon Mining’s plan to significantly increase production in coming years, with the company seeking to capitalise on the excellent potential. The project comprises five known gold deposits, with a combined Indicated and Inferred Mineral Resource of 460,700 ounces grading 4.2 g/t gold. Each of the five deposits displays excellent potential for exploitation, and remain open in most directions.
Kuusamo project outline
The possibility to identify additional mineralised deposits is high, with numerous indications of gold and the occurrence of a series of either untested or poorly tested geophysical, geochemical and geological targets in both the Kuusamo North and Kuusamo South areas. This provides the company with a pipeline of prospects to advance over the coming years.
In late 2010, Dragon Mining commenced a 12 month, 20,000 metre drilling program focussed on the Kuusamo North area. A total of 130 holes have been completed to the 31 December 2011 for an advance of 24,665.10 metres, with the drilling campaigns primarily targeting the Juomasuo and Hangaslampi deposits.
Kuusamo North - Juomasuo, Hangaslampi and Pohjasvaara deposits
Drilling at Juomasuo has totalled 76 holes, yielding a number of very encouraging high grade intercepts, including 25.60m @ 9.66 g/t gold, 31.90m @ 45.67 g/t gold 34.90m @ 9.30 g/t gold, 17.75m @ 16.59 g/t gold and 17.60m @ 34.01 g/t gold. Assays are pending for 10 holes.
Results have confirmed the continuation of the targeted lodes in concert with existing geological models and possible additional lodes parallel to the existing lode set.
Multi-element analysis has returned a number of strong cobalt intercepts and highlighted the presence of elevated rare earth elements, either in conjunction with gold mineralisation or separately, as well as outlining sporadic elevated levels of uranium and copper.
Juomasuo is the largest of the known gold deposits, comprising of a number of closely spaced, steeply dipping lodes that strike northwest-southeast over 280 metres in length and plunge steeply to the south and the southwest. Gold mineralisation occurs within a larger zone of sulphidised and sheared rocks, which also host the cobalt, rare earth elements and uranium. Rare earth elements occur as minerals allanite, monazite and bastnasite and these are associated equally with both the gold lodes and cobalt mineralisation. Uranium primarily occurs as discrete grains of uraninite, which are sporadically located within the gold lodes and to a lesser extent with the cobalt mineralisation.
In addition and separate to the Juomasuo gold resource of 1,955,000 tonnes @ 4.9 g/t gold and 0.14% cobalt, a cobalt resource totalling 3,084,000 tonnes grading 0.12% cobalt and 0.1 g/t gold has been defined.
Juomasuo drill hole plan
Juomasuo Cross Section - Profile A-A
The Hangaslampi deposit is located 1,000 metres south of Juomasuo. It represents a moderately dipping, medium to high grade zone of gold mineralisation that is defined over a strike length of 270 metres to a maximum vertical extent of 90 metres from surface. A total of 105 holes were historically drilled into this deposit, returning a number of very encouraging intercepts including 23.50m @ 13.25 g/t gold, 26.95m @ 5.78 g/t gold, 19.20m @ 7.00 g/t gold, 21.05m @ 13.70 g/t gold and 13.00m @ 20.41 g/t gold.
Hangaslampi drill hole plan displaying new intercept highlights
Four campaigns of drilling have been completed at Hangaslampi testing the extensions of the identified lodes. Assay results have been received from 34 of the 50 holes completed, returning a best intercept of 9.00m @ 30.17 g/t gold. Results are pending for 16 holes.
In conjunction with the recommencement of exploration, independent consulting group, Ramboll Finland Oy commenced the Environmental Impact Assessment (EIA) in November 2010. The EIA is an interactive process with the local people, municipality and associations and is supervised by a steering group, which comprises individuals representing various organisations and interested parties.
A major component of the EIA, the environmental baseline study that included investigations on ground and surface water, the nature and bird life has been undertaken, whilst noise modelling, reindeer surveys and other community related tasks are nearing completion. Finalisation of the EIA will require additional information from metallurgical test work.
Planning for metallurgical test work has advanced with the translation into English of historical metallurgical reports. Discussions regarding technical input and assistance have been held with a number of groups and individuals.