LUNDIN MINING NI 43-101 Technical Report for the Zinkgruvan

Transcription

LUNDIN MINING
NI 43-101 Technical Report for the Zinkgruvan Mine, Central Sweden
January 2013
LUNDIN MINING
NI 43-101 Technical Report for Zinkgruvan Mine,
Central Sweden
CONTENTS
1
SUMMARY ................................................................................................................................ 1
2
INTRODUCTION......................................................................................................................... 7
2.1
Purpose of Technical Report ................................................................................................. 7
2.2
Independent Consultants...................................................................................................... 7
2.3
Sources of Information ......................................................................................................... 8
2.4
Personal Inspections............................................................................................................. 9
2.5
Units and Currency ............................................................................................................. 10
3
RELIANCE ON OTHER EXPERTS ................................................................................................ 11
4
PROPERTY DESCRIPTION AND LOCATION................................................................................ 12
4.1
Location ............................................................................................................................. 12
4.2
Licences and Tenure ........................................................................................................... 13
5
ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY ......... 22
5.1
Accessibility........................................................................................................................ 22
5.2
Climate............................................................................................................................... 22
5.3
Local Resources and Infrastructure ..................................................................................... 22
5.4
Physiography...................................................................................................................... 23
6
HISTORY .................................................................................................................................. 24
6.1
7
Project History.................................................................................................................... 24
GEOLOGICAL SETTING AND MINERALISATION ........................................................................ 27
7.1
Regional Geology................................................................................................................ 27
7.2
Mine Geology ..................................................................................................................... 28
7.3
Mineralisation .................................................................................................................... 39
7.4
Underground Mapping ....................................................................................................... 41
8
DEPOSIT TYPE.......................................................................................................................... 43
9
EXPLORATION ......................................................................................................................... 44
9.1
Introduction ....................................................................................................................... 44
9.2
Latest Exploration Targets .................................................................................................. 44
9.3
Exploration Budget 2012 .................................................................................................... 45
9.4
Exploration Budget 2013 .................................................................................................... 47
10
DRILLING ............................................................................................................................ 49
10.1
Introduction ..................................................................................................................... 49
10.2
Core Logging and Sampling .............................................................................................. 49
10.3
Core Storage .................................................................................................................... 51
10.4
Drilling Results ................................................................................................................. 51
11
11.1
SAMPLE PREPARATION, ASSAYING AND SECURITY............................................................ 56
Sample Preparation.......................................................................................................... 56
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11.2
Analysis............................................................................................................................ 56
11.3
QA/QC ............................................................................................................................. 58
11.4
Adequacy of Procedures................................................................................................... 65
12
DATA VERIFICATION........................................................................................................... 66
13
MINERAL PROCESSING AND METALLURGICAL TESTING..................................................... 67
13.1
Grindability Testwork ....................................................................................................... 67
13.2
Beneficiation Studies........................................................................................................ 68
14
MINERAL RESOURCE ESTIMATES ....................................................................................... 70
14.1
Introduction ..................................................................................................................... 70
14.2
Drillhole Database............................................................................................................ 71
14.3
Mineralised Zone Interpretation ...................................................................................... 72
14.4
Drillhole Data Processing.................................................................................................. 73
14.5
Variography ..................................................................................................................... 73
14.6
Block Modelling ............................................................................................................... 76
14.7
Grade Interpolation.......................................................................................................... 77
14.8
Density............................................................................................................................. 79
14.9
Resource Classification..................................................................................................... 79
14.10
Mineral Resource Evaluation ........................................................................................ 81
14.11
Comparison with Previous Mineral Resource Estimates................................................ 83
15
MINERAL RESERVE ESTIMATES .......................................................................................... 85
15.1
Mineral Reserve ............................................................................................................... 85
15.2
Mining Cut-Off Value........................................................................................................ 86
15.3
Mining Factors ................................................................................................................. 89
15.4
Reconciliation .................................................................................................................. 89
15.5
Mine Call Factor ............................................................................................................... 90
16
MINING OPERATIONS ........................................................................................................ 91
16.1
Geotechnical .................................................................................................................... 92
16.2
Hydrological..................................................................................................................... 94
16.3
Mining Method ................................................................................................................ 94
16.4
Production Schedule ........................................................................................................ 97
16.5
Equipment ..................................................................................................................... 102
17
RECOVERY METHODS....................................................................................................... 104
17.1
Introduction ................................................................................................................... 104
17.2
Flowsheet Description.................................................................................................... 105
17.3
Production Data ............................................................................................................. 111
17.4
Plant Consumables......................................................................................................... 115
17.5
Mill Labour..................................................................................................................... 116
17.6
Assay Laboratory............................................................................................................ 117
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18
PROJECT INFRASTRUCTURE.............................................................................................. 118
19
MARKET STUDIES AND CONTRACTS................................................................................. 120
20
ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT........... 123
20.1
Environment, Social Setting and Context ........................................................................ 123
20.2
Project Status, Activities, Effects, Releases and Controls................................................. 125
20.3
Mine Waste Rock ........................................................................................................... 128
20.4
Water Management....................................................................................................... 129
20.5
Emissions to Air.............................................................................................................. 129
20.6
Waste Management....................................................................................................... 131
20.7
Hazardous Materials ...................................................................................................... 131
20.8
Security, Housekeeping and Fire Safety .......................................................................... 132
20.9
Permitting...................................................................................................................... 132
20.10
Environmental Management...................................................................................... 133
20.11
Social and Community Management .......................................................................... 138
20.12
Health and Safety ....................................................................................................... 139
20.13
Mine Closure and Rehabilitation................................................................................. 141
21
CAPITAL AND OPERATING COSTS..................................................................................... 143
21.1
Mining Costs .................................................................................................................. 143
21.2
Process Operating Costs................................................................................................. 144
21.3
Process Capital Costs...................................................................................................... 144
21.4
Mining Capital Costs....................................................................................................... 146
22
ECONOMIC ANALYSIS....................................................................................................... 147
23
ADJACENT PROPERTIES .................................................................................................... 148
24
OTHER RELEVANT DATA AND INFORMATION .................................................................. 150
25
INTERPRETATION AND CONCLUSIONS ............................................................................. 151
26
RECOMMENDATIONS....................................................................................................... 153
27
REFERENCES ..................................................................................................................... 154
TABLES
Table 4.1: Dalby Hytta Exploration Licence ...................................................................................... 18
Table 4.2: Lofallet Exploration Licence ............................................................................................. 19
Table 4.3: Flaxen Exploration Licence .............................................................................................. 21
Table 9.1: Exploration Programme for 2012..................................................................................... 45
Table 9.2: Exploration Programme for 2013..................................................................................... 47
Table 10.1: Summary of Drill Intersections fromm Surface Drilling at Dalby ..................................... 52
Table 13.1: Copper Metallurgical Testwork Results.......................................................................... 69
Table 15.1: Zinc and Copper Mineral Reserve (June 2012) ............................................................... 86
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Table 15.2: Mining Factors............................................................................................................... 89
Table 15.3: Reconciliation: Average 2012 Stope Mining Factors (%)................................................. 89
Table 15.4: Tonnage Correction Factor ............................................................................................ 90
Table 15.5: Grade Correction Factor ................................................................................................ 90
Table 16.1: In Situ Stress Measurements ......................................................................................... 92
Table 16.2: Geological Strength Index (GSI) ..................................................................................... 93
Table 16.3: Rock Strengths .............................................................................................................. 94
Table 16.4: Next Ten Years Planned Production from the LOM Plan................................................. 98
Table 16.5: Underground Equipment List....................................................................................... 103
Table 17.1: Plant Consumables (2011) ........................................................................................... 116
Table 17.2: Mill Labour (2011) ....................................................................................................... 116
Table 20.1: Overview Sampling/Measurement .............................................................................. 135
Table 20.2: External Complaints Received at Mine, 2012 ............................................................... 138
Table 21.1: Mining Operating Costs ............................................................................................... 143
Table 21.2: Operating Cost for Processing (2011)........................................................................... 144
Table 21.3: Zinkgruvan Process Opex Plan/Forecast 2012 to 2017 ................................................. 144
Table 21.4: Summary of Planned New Capital Investments............................................................ 145
FIGURES
Figure 4.1: Property Location Map................................................................................................... 13
Figure 4.2: Mining Concessions (Black) and Exploration Licences (Orange) at Zinkgruvan................. 15
Figure 4.3: Marketorp Mining Concession........................................................................................ 16
Figure 4.4: Location of the Dalby Hytta Licence Area ....................................................................... 17
Figure 4.5: Location of the Lofallet Licence Area .............................................................................. 18
Figure 4.6: Location of the Flaxen Licence Area................................................................................ 20
Figure 7.1: Simplified Regional Geology Map ................................................................................... 27
Figure 7.2: Generalised Local Geology Map ..................................................................................... 29
Figure 7.3: Simplified 3-D Section through Zinkgruvan Mine ............................................................ 30
Figure 7.4: Stratigraphic Sequence at Zinkgruvan............................................................................. 32
Figure 7.5: 650m Level Plan of Nygruvan Mine ................................................................................ 34
Figure 7.6: Schematic Cross Section through Nygruvan.................................................................... 35
Figure 7.7: 800 Level Plan - Burkland Zn/Pb and Cu Zones ............................................................... 37
Figure 7.8: Schematic Cross Section through Knalla ......................................................................... 38
Figure 7.9 : Example of Underground Mapping (Burkland Deposit) .................................................. 41
Figure 9.1: Location of Dalby and Isåsen Exploration Targets ........................................................... 44
Figure 9.2: Schematic Long Section of the Mine showing Proposed Exploration Drilling and Drifting
Programme for 2012 ....................................................................................................................... 46
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Figure 9.3: Schematic Long Section of the Mine showing Proposed Exploration Drilling and Drifting
Program for 2013 ............................................................................................................................ 48
Figure 10.1: Location of Surface Drill Hole Pierce Points into Dalby Exploration Target .................... 53
Figure 10.2: Schematic Cross Section showing the Position of Dalby Exploration Drift in Relation to
Known Structures within the Mine .................................................................................................. 54
Figure 10.3: Schematic Cross Section showing the Underground Exploration Drill Hole 3672........... 55
Figure 15.1: Knalla Reserve Classification......................................................................................... 87
Figure 15.2: Nygruvan Reserve Classification ................................................................................... 88
Figure 16.1: Schematic 3D View Shown the Present Mining Areas ................................................... 91
Figure 16.2: Transverse Bench and Fill (Panel Mining)...................................................................... 95
Figure 16.3: Modified Avoca Mining ................................................................................................ 97
Figure 16.4: Cecilia Planned Production 2013-2017 ......................................................................... 98
Figure 16.5: Burkland Planned Production 2013-2017...................................................................... 99
Figure 16.6: Nygruvan Planned Production 2013-2017................................................................... 100
Figure 16.7: Zinkgruvan Knalla Section Ventilation Network .......................................................... 101
Figure 16.8: Zinkgruvan Nygruvan Section Ventilation Network..................................................... 102
Figure 17.1: Simplified Flowsheet for the Crushing Circuit ............................................................. 105
Figure 17.2: Simplified Flowsheet for the Lead-Zinc Circuit ............................................................ 108
Figure 17.3: Simplified Flowsheet for the Copper Circuit................................................................ 110
Figure 17.4: Zinkgruvan Pb-Zn Mill Feed Data (2012: September YTD) ........................................... 111
Figure 17.5: Zinkgruvan Pb-Zn Circuit Recoveries (2012: September YTD) ...................................... 112
Figure 17.6: Zinkgruvan Lead and Zinc Concentrate Grades ........................................................... 113
Figure 17.7: Zinkgruvan Copper Mill Feed Data (2012: September YTD) ......................................... 114
Figure 17.8: Zinkgruvan Copper Recovery and Concentrate Grade................................................. 115
Figure 20.1: Number of Lost Time Accidents (including contractors) 1991 – November 2012......... 140
Figure 23.1: Location of Zinkgruvan within the Swedish Mining Districts........................................ 149
PHOTOS
Photo 10.1: Zinkgruvan Core Logging Facility ................................................................................... 50
Photo 10.2: Core Storage Facility ..................................................................................................... 51
Photo 19.1: Concentrate Warehouse and Weighbridge at Zinkgruvan ........................................... 120
Photo 19.2: Port of Otterbäcken Warehouse ................................................................................. 121
Photo 19.3: Vessel Loading in Otterbäcken .................................................................................... 121
Photo 20.1: Clearing Lake – Klaringssjö – Used to Clarify Water ..................................................... 124
Photo 20.2: Tailings Disposal at Enemossen TMF ........................................................................... 126
Photo 20.3: Pollution Control Sump at Zinkgruvan Mine to Collect Site Drainage Waters............... 128
Photo 20.4: Dust Monitoring Outside Site Boundary...................................................................... 130
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Photo 20.5: Construction of Noise Bund ........................................................................................ 131
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1
SUMMARY
Lundin Mining Corporation (Lundin) is a base metals mining company with operations in
Portugal, Spain, Sweden and Ireland. The Company currently has three mines in operation
producing copper, nickel, lead and zinc (Neves-Corvo in Portugal, Zinkgruvan in Sweden and
Aguablanca in Spain). The Zinkgruvan mine is 100% owned and operated by Lundin through
its Swedish subsidiary Zinkgruvan Mining AB.
This report presents the Mineral Reserves and Resources of the Zinkgruvan mine estimated
by the staff of Zinkgruvan Mining AB (Zinkgruvan) and audited by WAI as of 30 June 2012.
The Zinkgruvan mine is located in south-central Sweden, 175km west-southwest of
Stockholm. The mine site is some 15km from the town of Askersund and comprises a deep
underground mine, a processing plant and associated infrastructure and tailings disposal
facilities. Concentrates are trucked from the mine to a nearby inland port from where they
are shipped via canal and sea to European smelter customers. The Zinkgruvan deposit has
been known since the 16th century. Large scale production first started in 1857 and has
continued uninterrupted since then. At present the annual production of zinc-lead-silver ore
is in the order of 1,000kt. In the order of 38Mt of ore has been mined from Zinkgruvan up to
the end of 2012. The current remaining mine life is in excess of 10 years.
The mining operations are contained within two exploitation concessions; the "Zinkgruvan
Concession", and the neighbouring "Klara Concession” covering the deposit and the
immediate area.
The warm Gulf Stream in the Atlantic gives southern Sweden a relatively mild climate. The
average summer temperature is approximately 18° C. The average winter temperature is
slightly below freezing. The regional infrastructure of paved highways, electricity,
telecommunications and other communications is good. There are several villages and
smaller towns in the surrounding area. The nearest large city is Örebro, 60km to the north,
which hosts a university, considerable industry and an airport with flights to Copenhagen.
The Zinkgruvan deposit is located in the SW corner of the Bergslagen mining district, a part
of the Proterozoic Svecofennian Domain. This district hosts numerous iron ore and base
metal mines in volcano-sedimentary complexes consisting of felsic metavolcanics with
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intercalated limestone, calc-silicate and mineralised deposits. The district is composed of a
series of small elongated basins with felsic metavolcanics overlain by metasediments. The
basins are surrounded by mainly granitoid intrusions of which the oldest are of the same
age as the felsic metavolcanics.
The Zinkgruvan deposit is situated in an east-west striking synclinal structure. The tabularshaped Zn-Pb-Ag orebodies occur in a 5- to 25m-thick stratiform zone in the upper part of
the metavolcanic-sedimentary group. In the central part of the deposit disseminated Cu
mineralisation is situated in the immediate hanging wall of the Burkland Zn-Pb-ore body.
The ore deposit is about 5km long and extends to a depth of at least 1,500m below surface.
It strikes mainly east-west and dips towards north. One sub-vertical fault splits the ore
deposit in to two major parts, the Knalla mine to the west and the Nygruvan mine to the
east. In the Nygruvan mine the dip is 60o -80o, whilst in the Knalla mine folding is extensive
and partly isoclinal.
Most of the economic Zn-Pb-Ag mineralisation consists of massive layers of sphalerite and
galena intercalated with barren layers of quarzitic metatuffite and calc-silicate rock. Layers
of disseminated sphalerite and galena occur locally towards the hanging wall. Galena is
locally remobilised into veins, particularly in the Knalla mine.
Zinkgruvan is an underground mine with a long history. Mine access is currently via three
shafts, with the principal P2 shaft providing hoisting and man access to the 800m and 850m
levels with the shaft bottom at 900m (levels are measured in metres below surface). A
recently completed ramp connects the underground workings with surface and now
provides vehicle access direct to the mine. A system of ramps is employed to exploit
resources below the shaft and the deepest mine level is now at 1,130m below surface. The
mine is highly mechanised and uses longhole primary and secondary panel stoping in the
Burkland area of the mine, sublevel benching in the Nygruvan area and in the Cecilia area.
All stopes are backfilled with either cemented paste tailings or waste rock.
The processing plant is located adjacent to the P2 shaft. The existing Zinkgruvan Plant
commenced production in 1977 and uses the conventional processing technologies of
crushing, grinding, flotation and concentrate dewatering to produce separate lead and zinc
concentrates. The plant also produces paste from the tailings for underground backfill. In
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June 2010, a Copper Circuit was commissioned to produce copper concentrate using a
separate grinding, flotation and dewatering circuit.
Both the lead-zinc and the copper ores are relatively easy to process and have resulted in
good metallurgical performances. The copper ore responds favourably to beneficiation with
recoveries of 90.7% being obtained since the circuit was commissioned, while lead and zinc
recoveries are typically 86% and 92% respectively. In 2012, Zinkgruvan produced
approximately 3.1kt of copper, 37.2kt of lead and 83.2kt of zinc in concentrate respectively.
The quality of the concentrate is uniformly high and it is readily accepted by all customers.
Both the lead-zinc and copper circuits are fed with ore that has been crushed through a
common surface screening and crushing plant. However, the design of the crushing circuit
has resulted in plant performance being below expectations in terms of availability and
throughput, and it has struggled to meet existing noise and dust standards. In order to
remedy these issues, Zinkgruvan has undertaken a study with the following objectives:

To increase throughput from the surface plant operations to process 1.2Mtpa
for lead-zinc ore and 0.3Mtpa for copper ore;

To improve the plant’s availability by de-coupling the surface operations from
the mine hoist by incorporating suitable capacity stockpiles; and

To improve the plant design to attain continuous compliance with noise and
dust emission regulations.
Following positive results of a Pre-Feasibility Study, Zinkgruvan are contemplating the
installation of a new higher capacity Fully Autogenous Grinding (FAG) mill for the treatment
of the lead-zinc ore, negating the requirement for pre-screening and crushing. It is proposed
that the copper ore will be ground through the existing zinc milling circuit. The new leadzinc FAG mill will have a design capacity of 1.5Mtpa to allow for any potential future
expansion programmes.
Preliminary estimates have shown the total capital cost of the project to be US$51M,
however a more refined estimate will be determined by the more detailed Feasibility Study
currently underway. WAI notes that this is a significant capital investment into the plant and
that the requirement is driven not only by a potential financial gain but also by
environmental, operating control and health and safety concerns surrounding the existing
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crushing circuit. The payback period needs to be confirmed once detailed Feasibility Study
capital and operating costs are in hand. Zinkgruvan plan to have the new circuit operational
by Q1 2015. However, achieving this will depend on the time to receive the FAG mill from
order. The FAG mill is currently out to formal tender.
As part of the Trade-off-Study, metallurgical testwork was undertaken at SGS, Canada while
OMC undertook modelling and sizing of the AG mill. After reviewing the SGS test data, OMC
concluded that both the JK Dropweight and SMC test results indicate that the ores are not
overly competent. Based on the SGS laboratory testwork, WAI recommends that further
confirmatory testwork be undertaken as part of the Feasibility Study. It is accepted that
although not the most energy efficient option, oversizing of the FAG mill should allow for
effective treatment to at least current grind sizes and meet all environmental constraints
with the potential for easy of expansion if required.
The metallurgical support team at Zinkgruvan has been strengthened significantly in recent
years. This team have identified process improvements and are working towards the
installation of the new FAG mill and ore handling circuit. WAI recommended that the
metallurgical team undertake beneficiation tests on samples generated from drilling
programmes in order to predict future plant performances.
The estimation of Mineral Resources and Mineral Reserves of Zinkgruvan is based on a
database of over 3,000 diamond drill holes. The majority of the Zn-Pb-Ag Reserves have
been estimated by using block modelling and the Ordinary Kriging Method of grade
interpolation. In areas with randomly and often sparsely distributed drill holes, estimations,
mainly of Resources, have been done by employing the Polygonal Method.
The Zinc Mineral Resources and Reserves are reported above a 3.8% zinc equivalent cut-off.
The Copper Mineral Resources and Reserves are reported above cut-off grades of 1.0%
copper and 1.5% copper respectively.
Mineral Resources and Mineral Reserves as of 30 June 2012 are shown in the tables below.
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Total Mineral Resources for Zinc Zones at Zinkgruvan
(30 June 2012)
Measured
Indicated
Measured
+
Indicated
Inferred
Tonnage
kt
8,682
5,876
Grade
Pb (%) Ag (g/t) Cu (%)
5.0
107
0.0
4.9
101
0.0
Zn (%)
10.5
9.7
14,558
10.2
5.0
105
0.0
1,482
722
49
0
4,553
8.9
3.3
78
0.0
405
150
11
0
Zn (kt)
912
570
Metal
Pb (kt) Ag (Moz)
434
30
288
19
Cu (kt)
0
0
Total Mineral Resources for Copper Zones at Zinkgruvan
(30 June 2012)
Measured
Indicated
Measured
+
Indicated
Inferred
Tonnage
kt
5,292
587
Zn (%)
0.4
0.3
Grade
Pb (%) Ag (g/t) Cu (%)
0.0
30
2.3
0.0
34
2.3
5,879
0.4
0.0
30
2.3
23
0
5.6
136
622
0.4
0.0
31
1.7
3
0
0.6
11
Zn (kt)
21
2
Metal
Pb (kt) Ag (Moz)
0
5
0
0.6
Cu (kt)
122
14
Note: Mineral Resources are inclusive of Mineral Reserves - 100% attributable to Lundin
Total Mineral Reserves for Zinc Zones at Zinkgruvan
(30 June 2012)
Proven
Probable
Total
Tonnage
kt
8,443
2,421
10,864
Zn (%)
9.2
8.4
9.00
Grade
Pb (%) Ag (g/t) Cu (%)
4.4
95
0.0
2.7
54
0.0
4.0
86
0.0
Zn (kt)
777
203
980
Metal
Pb (kt) Ag (Moz)
371
26
65
4
437
30
Cu (kt)
0.0
0.0
0.0
Total Mineral Reserves for Copper Zones at Zinkgruvan
(30 June 2012)
Proven
Probable
Total
Tonnage
kt
3,931
77
4,008
Zn (%)
0.4
0.5
0.4
Grade
Pb (%) Ag (g/t) Cu (%)
0.0
32
2.2
0.0
34
2.0
0.0
32
2.2
Zn (kt)
16
0.0
16
Metal
Pb (kt) Ag (Moz)
0.0
4
0.0
0.0
0.0
4.0
Cu (kt)
86
2
88
Note: The Zinkgruvan Mineral Resource and Reserve estimates are prepared by the mine's
geology and mine engineering department under the guidance of Lars Malmström, Resource
Manager, employed by Zinkgruvan mine. Qualified Persons are Graham Greenway, Group
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Resource Geologist, Lundin Mining and Stephen Gatley Vice President Technical Services,
Lundin Mining. These estimates have been audited by WAI.
The Mineral Resource and Mineral Reserves are reported and prepared in accordance with
the requirements of National Instrument 43-101 and the guidelines published by the Council
of the Canadian Institute of Mining, Metallurgy and Petroleum (¨CIM Standards¨).
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2
INTRODUCTION
2.1
Purpose of Technical Report
Wardell Armstrong International Limited (WAI) was commissioned by Lundin Mining
Corporation (Lundin) to prepare a report in accordance with National Instrument 43-101 (NI
43-101) on the Zinkgruvan deposit located in Central Sweden.
WAI undertook a technical due diligence of the Zinkgruvan underground production mine
and this study considered all aspects of the mine from geology and mineral resources and
mineral reserves in accordance with guidelines of the Canadian Institute of Mining,
Metallurgy and Petroleum (CIM) Mineral Resource and Mineral Reserve definitions,
exploration potential, mining, processing, economics, and environmental and social issues.
Zinkgruvan mineral resource and reserve estimation work was undertaken in accordance
with Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Mineral Resource and
Mineral Reserve definitions that are referred to in National Instrument (NI) 43-101,
Standards of Disclosure for Mineral Projects. This Technical Report has been prepared in
accordance with the requirements of Form 43-101F1.
This report is intended to be used by Lundin as a NI 43-101 Technical Report. This report is
intended to be read as a whole, and sections or parts thereof should therefore not be read
or relied upon out of context.
2.2
Independent Consultants
WAI has provided the mineral industry with specialised geological, mining, and processing
expertise since 1987, initially as an independent company, but from 1999 as part of the
Wardell Armstrong Group. WAI’s experience is worldwide and has been developed in the
coal and metalliferous mining sector.
Our parent company is a mining engineering/environmental consultancy that services the
industrial minerals sector from nine regional offices in the UK and international offices in
Almaty, Kazakhstan, and Moscow, Russia. Total worldwide staff complement is now in
excess of 400.
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WAI, its directors, employees and associates neither has nor holds:

Any rights to subscribe for shares in Lundin Mining Corporation either now or
in the future;

Any vested interests in any concessions held by Lundin Mining Corporation;

Any rights to subscribe to any interests in any of the concessions held by
Lundin Mining Corporation, either now or in the future;

Any vested interests in either any concessions held by Lundin Mining
Corporation or any adjacent concessions; or

Any right to subscribe to any interests or concessions adjacent to those held
by Lundin Mining Corporation, either now or in the future.
WAI’s only financial interest is the right to charge professional fees at normal commercial
rates, plus normal overhead costs, for work carried out in connection with the investigations
reported here. Payment of professional fees is not dependent either on project success or
project financing.
2.3
Sources of Information
All information contained in this technical report has been supplied by Zinkgruvan Mining
AB. The author has relied upon this information from Zinkgruvan Mining AB staff and
internal reports covering the areas of previous exploration, infrastructure, environmental
and legal matters.
The following personnel from Zinkgruvan Mining AB have provided information to WAI in
order to compile this report:

Bengt Sundelin, General Manager has provided overall corporate information
and future mine development;

Lars Malmström, Resource Manager has provided the information on
Geology and Mineral Resources;

Jan Klare has provided the information on Mining and Ore Reserves;

Johan Albertsson, Mill Manager has provided the information on mineral
processing;
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
Frederick Lundstrom, HSEC Manager provided information on environmental
matters; and

Goran Vajukil, Financial Controller, has provided information pertaining to
costs and finance.
The Mineral Reserves and Resource estimates were prepared under the direction of Lars
Malmström, Resource Manager. Qualified persons are Graham Greenway (Lundin Mining
Group Resource Geologist) and Stephen Gatley (Lundin Mining Vice President Technical
Services).
2.4
Personal Inspections
The below-listed qualified persons conducted personal inspections of the Zinkgruvan Mine:
Mark Owen, BSc, MSc, MCSM,CGeol, EurGeol, FGS is a full time employee of Wardell
Armstrong International and Technical Director of Geology and Resources and as a Qualified
Person is responsible for preparing this Technical Report. The author has visited the site to
review recent data pertaining to this report from 13-15th November 2012 inclusive.
Lewis Meyer, ACSM, MCSM, BEng, MSc, PhD, CEng, FIMMM, is a full time employee of
Wardell Armstrong International and Associate Director and Mining Engineer and is
responsible for mine design and scheduling for reserve estimation and as a Qualified Person
is responsible for preparing this Technical Report. The author has visited the site to review
recent data pertaining to this report from 13-15th November 2012 inclusive.
The authors have not reviewed the land tenure situation and have not independently
verified the legal status or ownership of the properties or any agreements that pertain to
Zinkgruvan. The results and opinions expressed in this report are based on the authors’ field
observations and assessment of the technical data supplied by Zinkgruvan Mining AB staff.
The authors have carefully reviewed all of the information provided by Zinkgruvan Mining
AB and believe that the data has been verified to a sufficient level to permit its use in a CIM
compliant Mineral Resource and Mineral Reserve estimate.
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Other WAI consultants visited Zinkgruvan Mine during the period July 13-15th November
2012 to assist with the compilation of this report. During the site visit, the WAI team
inspected current exploration, production and process activities and reviewed
environmental compliance.
These additional WAI consultants consisted of:

Richard Ellis, BSc, MSc, MCSM, FGS; Principal Resource Geologist, Resource
Modelling and Estimation review;

Barrie O’Connell, PhD, B.Eng (MCSM), WAI, Senior Processing Engineer,
Process and Metallurgical Testwork review; and

Chris Broadbent, BSc, PhD, CEng, FIMMM, Director of WAI, Environmental
review.
2.5
Units and Currency
All units of measurement used in this report are metric unless otherwise stated. Tonnages
are reported as metric tonnes (“t”), precious metal values in grams per tonne (“g/t”) or
parts per million (“ppm”), base metal values are reported in weight percentage (“%”)
Unless otherwise stated, all references to currency or “$” are to United States Dollars (US$).
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3
RELIANCE ON OTHER EXPERTS
This technical report has been prepared by WAI on behalf of Lundin Mining Corporation.
The information, conclusions, opinions, and estimates contained herein are based on:

Information made available by Lundin Mining Corporation to WAI at the time
of preparing this Technical Report including previous internal Technical
Reports prepared on Zinkgruvan Mine and associated licences in close
proximity to the project; and

Assumptions, conditions, and qualifications as set forth in this Technical
Report.
The qualified persons have not carried out any independent exploration work, drilled any
holes or carried out any sampling and assaying at Zinkgruvan Mine.
For the purposes of this report, WAI has relied on ownership information provided by
Lundin Mining Corporation. WAI has not researched property title or mineral rights for
Zinkgruvan and expresses no opinion as to the ownership status of the property. The
description of the property, and ownership thereof, as set out in this technical report, is
provided for general information purposes only.
Except for the purposes legislated under provincial securities laws, any use of this report by
any third party are at that party’s sole risk.
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4
PROPERTY DESCRIPTION AND LOCATION
4.1
Location
The Zinkgruvan mine is located in south-central Sweden in Närke County at approximately
58°49’N latitude, 15°06’E longitude. As shown in Figure 4.1, the mine lies 175km westsouthwest of Stockholm and 210km northeast of Göteborg. While there is a small village
called Zinkgruvan surrounding the mine installations, the nearest significant communities
are Åmmeberg and Askersund, 10km and 15km NW respectively from the mine. These
towns house the majority of the mine employees.
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Figure 4.1: Property Location Map
4.2
Licences and Tenure
Lundin Mining Corporation (Lundin) is a base metals mining company with operations in
Portugal, Spain, Sweden and Ireland. The company currently has three mines in operation
producing copper, nickel, lead and zinc (Neves-Corvo in Portugal, Zinkgruvan and
Aguablanca in Spain). The Zinkgruvan mine is 100% owned and operated by Lundin through
its Swedish subsidiary Zinkgruvan Mining AB.
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4.2.1 Exploitation Concessions
Zinkgruvan Mining AB (ZMAB) holds three exploitation concessions totalling an area of
679ha. Two of these exploitation concessions cover the deposit and its immediate area
(Figure 4.2). The “Zinkgruvan Concession”, consisted originally of a large number of small
mining rights, was consolidated in 2000 into one concession covering an area of 254.4ha
and is valid until 01 January 2025. The “Klara Concession” was granted in 2002 and covers
354.7ha, mainly over “new areas” in the western part of the deposit and is valid until 18
December 2027. If mining continues after these years, these concessions can be extended
for periods of 10 years.
The two exploitation concessions are entirely held by ZMAB. The surface land in the
concessions areas belong mainly to private individuals. The regulations of the exploitation
concessions involve no particular restrictions on the mining operation. The Klara concession
has, however, one restriction stipulating that mining must always be done under a minimum
rock cover of at least 150m thick and in planned residential areas the cover has to be 400m.
This restriction has no impact on mining because the ore zones in the Klara concession are
found at depths below 400m.
A further exploitation concession is held at Marketorp, which lies 40km due east of
Zinkgruvan, covers an area of 70.2ha and is valid until 06 March 2026. No exploitation and
exploration work has been conducted here in the last three years (Figure 4.3).
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Figure 4.2: Mining Concessions (Black) and Exploration Licences (Orange) at Zinkgruvan
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Figure 4.3: Marketorp Mining Concession
(North at top – do not scale)
4.2.2 Exploration Licences
Zinkgruvan Mining AB also holds three exploration licences covering a total area of 3,753ha.
These licences include:
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Dalby Hytta licence covers an area of 780ha and is valid until 01 July 2013. The location of
the licence is shown in Figure 4.4 and the co-ordinates are given in Table 4.1 below.
Zinkgruvan’s intention is to apply for an extension for at least part of this licence on expiry.
Figure 4.4: Location of the Dalby Hytta Licence Area
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Table 4.1: Dalby Hytta Exploration Licence
Co-ord No
1
2
3
4
5
6
7
8
9
10
11
X Easting
6525000.00
6525140.00
6525295.00
6526324.00
6527000.00
6527620.00
6527060.00
6523152.74
6522177.00
6523030.00
6525000.00
Y Northing
1455776.00
1455782.00
1455736.00
1455327.00
1455000.00
1455600.00
1456520.00
1458480.22
1457089.00
1456560.00
1456137.00
The Lofallet licence covers an area of 992ha and is valid until 13 September 2014. The
location of the licence is shown in Figure 4.5 and the co-ordinates are given in Table 4.2
below. In the absence of new information it is unlikely that Zinkgruvan will apply for an
extension of this licence.
Figure 4.5: Location of the Lofallet Licence Area
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Table 4.2: Lofallet Exploration Licence
Co-ord No.
1
2
3
4
5
6
7
8
9
10
11
12
13
X Easting
6516000.00
6515640.00
6515650.00
6515155.00
6515050.00
6514200.00
6514150.00
6514600.00
6513200.00
6513000.00
6513525.00
6513850.00
6516000.00
Y Northing
1458870.00
1459000.00
1460050.00
1461680.00
1462300.00
1462300.00
1461600.00
1459250.00
1459250.00
1456350.00
1456000.00
1456900.00
1457400.00
The Flaxen licence covers an area of 1981ha and is valid until 15 September 2014. The
location of the licence is shown in Figure 4.5 and the co-ordinates are given in Table 4.3
below. Zinkgruvan’s intention is to apply for an extension for at least part of this licence
with the precise area dependent on the results of the current exploration drilling at Isåsen.
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Figure 4.6: Location of the Flaxen Licence Area
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Table 4.3: Flaxen Exploration Licence
Co-ord No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
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X Easting
6523152.74
6523835.24
6525000.00
6523090.00
6523460.00
6523180.00
6522680.00
6520900.00
6519050.00
6517690.00
6517000.00
6516450.00
6517375.00
6518580.00
6518990.00
6520744.20
6520807.60
6520700.30
6520807.70
6520989.50
6520974.00
6521157.90
6521229.50
6521349.30
6521345.60
6522400.00
6522860.00
6523235.50
6523388.86
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Y Northing
1458480.22
1458133.58
1459550.00
1461430.00
1462360.00
1463600.00
1463420.00
1464360.00
1462765.00
1462035.00
1462825.00
1462825.00
1461660.00
1461180.00
1460575.00
1459992.70
1460158.70
1460385.20
1460909.10
1460872.30
1460836.50
1460757.80
1460593.70
1460599.20
1460688.10
1460150.00
1459555.00
1459733.00
1459426.54
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5
ACCESSIBILITY,
CLIMATE,
LOCAL
RESOURCES,
INFRASTRUCTURE
AND
PHYSIOGRAPHY
5.1
Accessibility
The property can be reached from Stockholm along highway E18 in a westerly direction for a
distance of 200km to Örebro; from Örebro southward on highway E20 and County Road 50
for a distance of 50km to Askersund, and then by a secondary paved road for a further 15km
through Åmmeberg to Zinkgruvan. Access to Örebro is also possible by rail and by aircraft on
scheduled flights from Copenhagen amongst other locations.
Askersund is located at the north end of Lake Vättern, the second largest lake in Sweden.
The largest lake in the country, Lake Vänern, is some 50km due west of Askersund. The port
of Otterbäcken on Lake Vänern is about 100km from Zinkgruvan by road. The port of
Göteborg on Sweden's west coast is accessible by lake and canal from Otterbäcken, a
distance of some 200km.
5.2
Climate
The warm Gulf Stream in the Atlantic gives Sweden a milder climate than other areas at the
same latitude. Stockholm, the capital, is at almost the same latitude as southern Greenland
but has an average temperature of 18°C in July. The winter temperatures average slightly
below freezing and snowfall is moderate.
Temperature records for Zinkgruvan show that the mean annual temperature is 5.5°C. Mean
monthly temperatures are below freezing from December through March. The coldest
month is February, with an average maximum temperature of -4.1°C and an average
minimum of -11.1°C. The warmest month is August with an average maximum temperature
of 18.2°C and an average minimum of 12.2°C. Annual precipitation is about 750mm, ranging
from a low of 11mm in March to a high of 144mm in August.
5.3
Local Resources and Infrastructure
The community of Askersund has a population of about 14,000. The village of Zinkgruvan
has about 290 inhabitants. Zinkgruvan is the largest private employer in the municipality
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with about 340 employees and approximately 100 contractors. Other local economic
activities include agriculture, construction and light service industries. The town of
Askersund has a modest tourist industry in the summer and is a full service community.
The nearest airport is in Örebro with flights to Copenhagen and other centres. Örebro also
hosts a university and considerable light and heavy industry. As with virtually all of southern
Sweden there is an extensive network of paved highways, rail service, excellent
telecommunications facilities, national grid electricity, an ample supply of water and a highly
educated work force.
5.4
Physiography
The property is located in very gently rolling terrain at about 175m above mean sea level
("masl") and relief in the area is 30m to 50m. The land is largely forest and drift covered and
cut by numerous small, slow moving streams, typical of glaciated terrain and very
reminiscent of boreal-forested areas of Canada such as the Abitibi area of northern Ontario
and Quebec. Outcrop is scarce.
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6
HISTORY
6.1
Project History
The Zinkgruvan deposit has been known since the 16th century but it was not until 1857 that
large scale production began under the ownership of the Vieille Montagne Company of
Belgium. Vieille Montagne merged into Union Miniere in 1990. The earliest recorded mining
activity in the area dates from approximately 1700. This was from the Isåsa mine,
immediately to the north of the present Zinkgruvan operation. The mine operated
intermittently until the mid-1800s, but never made a profit and was shut down permanently
in 1845.
Interest in the present Zinkgruvan area as a potential zinc producer dates from 1846 - 47.
Trial mining and smelting were carried out but the operation was unprofitable because of
the large quantities of coal required for reducing the ore.
The Swedish owner of the property subsequently made contact with Vieille Montagne, the
world leader in the mining and processing of zinc ores at that time. The Belgian company
agreed to purchase the properties, including mineral rights and extensive surface rights in
farm and forest land and in 1857 a Royal Warrant was issued by the Swedish Crown
authorising this purchase by a foreign company and documenting the terms of operation of
the mine.
The first shipment of ore from Zinkgruvan to Belgium was made in 1860. Vieille Montagne
metallurgists, accustomed to treating oxidised ores in carbonate gangues, encountered
severe technical problems in smelting the sulphide ores; however, the problem was
eventually solved by the addition of a roaster on site in 1864.
Processing, including roasting, was carried out at Åmmeberg with its small port facility on
Lake Vättern. Zinkgruvan still has some real estate holdings in and around the village. The
former tailings area now forms a golf course. From the port, shipments of ore and (later)
concentrate were shipped out through the Swedish lake and canal system to the sea and on
to Belgium.
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In the years immediately following the opening of the mine, production was carried out on a
modest scale. Hand sorting and heavy media separation were sometimes employed to
upgrade mined material. The rate of production was around 300kt annually ("tpa") until the
end of 1976.
In the mid-1970s, the company decided to expand production to 600ktpa. A new main shaft
was sunk to gain access to additional deeper ore and the mining method was modified to
allow for heavier, mechanised equipment. A new concentrator and tailings disposal facility
were built adjacent to the mine and the Åmmeberg facilities were largely rehabilitated and
abandoned. The new facilities were brought on line at the beginning of 1977 and the rate of
production gradually began to increase towards the target of 600ktpa, which was achieved
in 1982.
In late 1995, North Limited of Australia purchased the mine as part of a zinc strategy and in
addition to mining, carried out an aggressive exploration programme in the immediate and
surrounding area. In August 2000, Rio Tinto became the owner of Zinkgruvan when it
acquired North Limited.
Lundin Mining Corporation acquired the mine from Rio Tinto in June 2004 and is now the
owner of Zinkgruvan Mining AB. In December 2004, Silver Wheaton Corp. purchased the life
of mine silver production from the Zinkgruvan mine.
Significant milestones throughout the history of the mine include:

1300 Mining of iron ore starts in the vicinity;

1700 Isåsa silver operations starts;

1857 Vieille Montagne, BEL, acquires ”Zinkgruvan land” for 2.5MBFr;

1863 Railroad to and mill in Åmmeberg constructed;

1927 Introduction of flotation;

1955 Introduction of sink and float in Zinkgruvan;

1977 New mill in Zinkgruvan;

1995 Acquired by North Limited, Australia;

1999 Major reinvestment in the mill completed;

2000 Acquired by Rio Tinto Plc, UK;

2001 Introduction of paste fill;
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
2004 Acquired by Lundin Mining Corporation, Canada;;

2009 Record throughput in the mill; 1,028,000t;

2010 Ramp from surface constructed;

2010 Mining and processing of copper ores commenced;

2010 Record ore production in the mine; 1.025.000t; and

2011 Record production in the mill, 1,109,000t.

2012 Record metal in concentrate production, 83.2ktZn, 37.2ktPb, 3.1ktCu
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7
GEOLOGICAL SETTING AND MINERALISATION
7.1
Regional Geology
Zinkgruvan is located in the SW corner of the Proterozoic-aged Bergslagen greenstone
belt/mining district, famed for its numerous iron ore and base metal mines, notably the
Falun deposit (200km north of Zinkgruvan), which saw production from before the year
1000 until 1992. The belt is shown in Figure 7.1 below.
Figure 7.1: Simplified Regional Geology Map
The ore-bearing Bergslagen district is part of the southern volcanic belt of the Svecofennian
Domain. The supracrustal rocks are dominated by felsic metavolcanic successions that can
be up to 10km thick. Limestones, calcsilicates and mineralised deposits are commonly found
within the metavolcanics. The district comprises a series of small proximal basins in a
continental rift environment. The active extensional stage was characterised by felsic
volcanism and intrusions followed by subsidence and sedimentation.
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7.2
Mine Geology
7.2.1 Stratigraphy
The Zinkgruvan deposit is situated in an east-west striking synclinal structure within the
lower Proterozoic Svecofennian supracrustal sequence (Figure 7.2). This sequence consists
of metavolcanic and metasedimentary rocks 1.90 to 1.88 billion years old, which rest on an
unknown basement. The massive sulphide Zn-Pb-Ag and disseminated Cu mineralisation are
hosted by a metavolcano-sedimentary sequence with associated carbonates and cherts and
extend for some 5km along strike. Structurally, the deposit has undergone several phases of
folding and is divided into two distinct areas by the regional NNE-SSW-trending Knalla
fracture/fault zone. A simplified plan of the mine geology is given in Figure 7.2 and a 3-D
section of the mine shown in Figure 7.3 below.
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Figure 7.2: Generalised Local Geology Map
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NI 43-101 Technical Report for Zinkgruvan Mine, Central Sweden
Figure 7.3: Simplified 3-D Section through Zinkgruvan Mine
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The supracrustal rocks are divided into the following three lithostratigraphic groups (as
shown in Figure 7.4):

Metavolcanic group in the lower part of the stratigraphy;

Metavolcano-sedimentary group; and

Metasedimentary group, which occupies the highest stratigraphic position of
the Supracrustal rocks in the Zinkgruvan area.
The metavolcanic group comprises mainly massive, fine-grained, red, felsic metavolcanic
rocks which are in part quartz-microcline porphyritic with a low (5%) biotite content. They
occur mainly in the northern part of the area and south of the Zinkgruvan basin structure.
Some of the rocks in the metavolcanic group are assumed to have an ignimbritic origin.
The rocks of the metavolcano-sedimentary group are composed of mixed, chemically
precipitated, and tuffaceous metasediments. The major rock type in this group is a
metatuffite, which is commonly well banded and sometimes extremely finely laminated.
Calc-silicate
rocks,
marbles,
calc-silicate-bearing
quartzites,
quartzitic
tuffaceous
metasediments and sulphide ores are intercalated with the metatuffites. All of these rocks
are intruded by metabasic sills and dykes, usually 2 to 3 m wide.
The metasedimentary group contains mainly argillic, clastic metasediments, which have a
high biotite content (>30%). They are strongly recrystallised and transformed to veined
gneisses. In upper parts of the stratigraphy these have been migmatised and have
undergone some anatexis to form grey, medium grained, biotite-rich, massive granitoids. In
the lower part of the group, disseminated pyrrhotite occurs in garnet-bearing siliceous beds
of primary exhalative origin.
Most of the mineralisation in the district is associated with the metavolcano-sedimentary
group. The Zinkgruvan deposit, together with a number of small bodies of Zn-Pb
mineralisation are situated in the higher part of the metavolcano-sedimentary group. Higher
up in the stratigraphy a stratiform pyrrhotite mineralisation occurs in the uppermost part of
the metavolcano-sedimentary group and in the lower part of the metasedimentary group.
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Migmatite, Sillimanite - biotite - quartz - feldspar
Metasediments
Pyrrhotite mineralization
Volcaniclastics
Marble, wollastonite - skarn -vesuvianite - garnet
Zn - Pb ORE
Volcaniclastics
(cu)
Marble, forsterite - serpentine - (magnetite) - calcite
Volcaniclastics
Zn - Pb mineralization
Mine Package
Volcaniclastics
Quartz - Microcline
rock
Quartz - Microcline rock
Figure 7.4: Stratigraphic Sequence at Zinkgruvan
7.2.2 Intrusive and Contact Metamorphic Rocks
During early stages of the orogeny 1.87 to 1.85 billion years ago, differentiated, I-type
granitoids, ranging from gabbro to granite in composition intruded the Svecofennian
sequence. From 1.84 billion years ago until 1.77 billion years ago further intrusion occurred,
forming late orogenic, undifferentiated, S-type plutons and dykes associated with
migmatites, comprising granites, aplites and a large number of pegmatites. Finally, postorogenic granites belonging to the NNW trending Transscandinavian granite-porphyry belt
created a large volume of granitic intrusion about 1.73 billion years ago.
7.2.3 Structure
As a result of repeated deformation during the Svecofennian orogeny, the relatively
incompetent supracrustal rocks were isoclinally folded together with the more competent,
primorogenic granitoid massifs. The metamorphism is low-pressure, upper amphibolite
facies with migmatisation and partial melting of the biotite-rich rocks in the
metasedimentary group. Sillimanite and cordierite are common index minerals in these
rocks. The low biotite rocks of the metavolcano-sedimentary group, which underwent the
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same high-temperature metamorphism exhibit well preserved, recrystallised, primary
bedding.
Regional deformation ended before regional metamorphism, as the late orogenic granites
have not been affected by the regional deformation. The later granites of the
Transscandinavian granite-porphyry belt have deformed the country rock during their
intrusion, causing a local folding parallel to subparallel to their margins.
Brittle fracturing is marked by NNE-trending fault systems resulting in large-scale block
movements between sections of the country rock. The Knalla fault, separating the Nygruvan
and Burkland ore zones is probably an example of such a fault. Movements of several
hundred metres are occasionally observed along such faults. These fault systems postdate
an east trending dolerite dyke swarm, which has an age of about 1.53 billion years.
7.2.4 Structure, Lithology and Alteration
Stratigraphy is overturned such that the stratigraphic footwall forms the structural hanging
wall. From the stratigraphic footwall (oldest) to the hanging wall (youngest), the deposit
geology is presented schematically as follows:

Felsic metatuffite (sometimes quartzitic and with occasional oxide iron
formation beds);

Marble, hosting the copper mineralisation in the Burkland-Sävsjön area;

Massive sulphide Zn, Pb;

Calc-silicate bedded metatuffite;

Marble;

Felsic metatuffite with disseminated pyrrhotite near the upper stratigraphic
contact; and

Argillic metasediment.
The Nygruvan section of the mine, which has provided the bulk of the production until
recently, is situated to the east of the Knalla fracture/fault zone and consists of a single,
fairly regular, tabular 5m - 25m thick ore horizon, striking NW-SE, dipping 60° to 80° to the
NE and with a near-vertical plunge. It outcrops and persists to at least 1,300m vertical
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depth. Figure 7.5 and Figure 7.6 show the 650 level plan and the schematic cross-section
through the Nygruvan area respectively.
Figure 7.5: 650m Level Plan of Nygruvan Mine
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Figure 7.6: Schematic Cross Section through Nygruvan
The western or Knalla section of the mine, striking generally NE-SW (although quite variable
locally) and dipping NW, consists of several bodies of highly contorted Zn-Pb mineralisation
of quite variable thickness (3m – 40m). Dips are variable from near vertical to subZT61-0996/MM775
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horizontal. Plunges are also variable with the Burkland body plunging moderately NE and
Cecilia and Dalby plunging NW. Burkland extends from 200m to depths in excess of 1,500m
vertical. It flattens considerably at depth making exploration drilling and interpretation of
results difficult. Figure 7.7 and Figure 7.8 shows the 800m level Burkland plan and a
schematic cross-section through the Knalla area respectively.
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Figure 7.7: 800 Level Plan - Burkland Zn/Pb and Cu Zones
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Figure 7.8: Schematic Cross Section through Knalla
Sitting in the immediate structural hanging wall of the Sävsjön-Burkland ore body is a
copper (chalcopyrite) stringer zone hosted by dolomitic marbles, in turn overlain by the
oldest unit in the mine area, a metatuffite hyrothermally altered to a quartz-microcline rock.
The copper mineralisation can be followed sporadically from the Sävsjön area in the west to
the Burkland area in the east at depths of between 300 and 400m. At Burkland, it thickens
and follows continuously the plunge of Burkland Zn-Pb-Ag orebody down dip. Core drilling
has indicated the copper mineralisation at a depth of 1,500m. The copper zone dips steeply
NW in its upper part but flattens out at depth. It is cut off laterally to the NE by the Knalla
fault and has been closed off by drilling to the SW.
The plan position of the chalcopyrite copper zone in relation to the zinc zone is shown in
Figure 7.7.
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The metavolcano-sedimentary group consists mainly of a potassium-rich metatuffite with
intercalations of calcsilicate rocks, marbles, quartzites and sulphides. These intercalations
give the metavolcano-sedimentary group a pronounced stratification especially in the ore
zone and its stratigraphic hanging wall.
The metatuffite is a homogenous, usually massive, quartz-microcline-biotite rock of rhyolitic
to dacitic composition. It has a granoblastic texture and is often gneissic. The stratigraphy of
the metavolcano-sedimentary group is best developed in the eastern part of the Nygruvan
area where the sequence is thickest. Metabasic sills and dykes intruding the metavolcanic
and the sedimentary group are the oldest intrusions. Dykes and irregular, massive, grey,
usually coarse-grained pegmatites of granitic composition are relatively common in the
folded areas.
There is clear evidence of hydrothermal alteration in the mine sequence. Altered rocks have
been heavily depleted of Mg, Mn and Fe, although there is some disagreement regarding
Mn depletion. Sodium depletion is less evident in the mine area, although the Na/K ratio
decreases upwards through the footwall sequence of progressively more altered
metatuffite. There is significant enrichment in Ba, K, S and Ca.
7.3
Mineralisation
7.3.1 Zinc / Lead Orebodies
Sphalerite and galena are the dominant sulphide minerals. They generally occur as massive,
well banded and stratiform layers between 5 to 25m thick. At Nygruvan there are two
parallel horizons (mainly in the eastern portion of the orebody), separated by 3 to 8m of
gneissic metatuffite (quartz, microcline, biotite, and minor muscovite, chlorite and epidotic).
Chalcopyrite is present in small amounts (<0.2% Cu). Pyrrhotite, pyrite and arsenopyrite are
present although the amount of pyrrhotite and pyrite is typically low (<1% each).
Metamorphism and deformation have mobilised galena into veins and fissures sub-parallel
to original bedding in places. Native silver was even more mobile and is often found in small
fissures. Remobilisation is most commonly observed in the Pb-rich western part of Nygruvan
and in the Burkland area. In both the Nygruvan and Knalla areas there is an increase in ZnPb grades towards the stratigraphic hanging wall of the massive sulphide horizon. Contacts
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of the mineralisation with the host stratigraphy are generally very sharp, more so on the
stratigraphic hangingwall than footwall.
In the Knalla portion of the mine, the structure is more complex and structural thickening is
common. There are often two to four parallel ore horizons separated by narrow widths of
metatuffite. The Knalla area consists of five individual Zn-Pb bodies for which Mineral
Reserves and/or Mineral Resources have been estimated. Exploration is on-going to further
define and expand them along what is a continuous although highly contorted horizon.
The mineralised bodies are, from NE to SW, Burkland, Savsjon, Mellanby, Cecilia and Borta
Bakom. In addition, the Lindangen zone occurs close to surface above Mellanby on the
longitudinal section and was exploited earlier in the mine’s life. It hosts a small resource,
which is unlikely to be exploited because of its proximity to surface.
The only significant difference in mineralogy from Nygruvan to Knalla is that the Co and Ni
content are higher in the Burkland - Sävsjön deposit and are of a sufficient level that impacts
metallurgy and concentrate quality.
7.3.2 Copper Mineralisation
Copper stockwork mineralisation was noted on the structural hanging wall of the Burkland
deposit early in its exploration history. During 1996-1997 resource definition drilling at
Burkland led to the recognition of significant hanging wall copper mineralisation and a
copper-specific drilling programme was undertaken.
The dip of the copper resource is steep (80°) at higher levels (600-700m). It flattens out to
45° at depths below 1,000m. The plunge is about 60° towards the NNE.
The host rock is a dolomitic marble with variable amounts of porphyroblastic Mg-silicates.
Chalcopyrite is the main copper mineral and occurs as fine-grained disseminations infilling
between dolomite grains or massive lumps and irregular veins up to several cm thick.
Cubanite, CuFe2S3, is also present and occurs as lamellae in chalcopyrite. Bornite is present,
while tetrahedrite is rare. Minor amounts of arsenopyrite are found locally. In its footwall
plunge the copper mineralisation sometimes merges with the Burkland Zn-Pb ore body.
Here it usually contains significant amounts of sphalerite and some galena.
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The Burkland copper resource is best developed at depths between 700 and 1,100m. It has
a strike length of 100 to 180m while the width varies from 5 up to 60m with an average
around 20m. Up dip the copper resource wedges out and becomes uneconomic above the
600m level. From 1,100m and down to a depth of 1,200m the width of the mineralisation
decreases to 10m. Drilling has not taken place below this depth and no resource has yet
been defined. However, the copper mineralisation has been shown to extend to a depth of
1,500m by core drilling.
7.4
Underground Mapping
All underground development that intersects mineralisation is subject to underground
mapping at a scale of 1:400. Headings are normally washed clean prior to mapping. A
geologist then maps the back of the development headings and produces a hand-drawn
sketch. The mapping carried out relates to both lithology and also likely ore grade. The
sketch is digitised and used to update 3D level plans in the software programme
Microstation. An example of a mapped heading in Microstation® is shown in Figure 7.9
below. The underground mapping data is used to support ore body interpretation. In the
Nygruvan area, where orebody contacts are sharp and can be identified visually, the
underground mapping data is also used to establish orebody thickness for the sectional
resource estimation.
Figure 7.9 : Example of Underground Mapping (Burkland Deposit)
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WAI is particularly impressed with the underground mapping carried out at Zinkgruvan. The
underground mapping is comprehensive and provides an excellent tool to aid geological
interpretation. In addition the mapping aids communication between geology, survey and
mine planning departments.
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8
DEPOSIT TYPE
While the most appropriate genetic model for Zinkgruvan is still somewhat controversial,
evidence, particularly the presence of what appears to be a copper-rich stringer zone
stratigraphically below the Burkland ore body, seems to favour a volcanogenic ("VMS")
model in a distal environment. In this model, mineralised hydrothermal fluids ascended
through a vent system and deposited copper mineralisation just below the paleo-sea floor
and lead-zinc sulphide mineralisation in shallow, fairly flat-lying sea floor depressions during
a particularly quiescent period. However, some researchers prefer a sedimentary-exhalative
("SEDEX") model.
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9
EXPLORATION
9.1
Introduction
With the expansion of the mine capacity in the mid-1970’s, exploration increased and
became more aggressive in the beginning of the 1980’s. At first, focus was on the
continuation of the Nygruvan mine at depth, but after that, and at present, the focus is
towards the western half of the mining area and the Knalla Mine at depth.
Exploration by core drilling dominates, undertaken both from surface and underground.
Most of the exploration drilling takes place underground from dedicated exploration drifts.
9.2
Latest Exploration Targets
The mine is currently exploring two exploration targets which lie close to the mine. These
are Dalby which lies to the NW and Isåsen which lies to the NE (and is postulated to be the
upturned folded limb of the Nygruvan section of the mine). The location of these two targets
relative to the mine is shown in Figure 9.1 below.
Figure 9.1: Location of Dalby and Isåsen Exploration Targets
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9.3
Exploration Budget 2012
A total of 22km of underground drilling was planned for 2012, together with 4km of surface
drilling and 750m of exploration drifting. The programme is summarised in Table 9.1 and
Figure 9.2 below.
Table 9.1: Exploration Programme for 2012
Drilling Type
Pure Exploration
Target
Burkland
East Nygruvan
West Nygruvan
Sub total
Upgrade Drilling
Sub total
Infill Drilling
Sub total
Surface
Underground
Exploration
Sub Total
Total
Borta Bakom
Mellanby
Burkland
Nygruvan
Block 205
Burkland/Nygruvan
&
Isåsen
Metres
2,500
2,500
2,000
7,000
2,000
3,000
2,500
2,000
Comment
Deep continuity of structure
Deeper extension of structure
Inferred to Indicated or Better
9,500
5,500
5,500
4,000
4,000
26,000
As of the end of December 2012, underground exploration drilling on Nygruvan (6,066m),
Borta Bakom (908m) and Isåsen (1,414m) totalled 8,388m, whilst upgrade drilling on Borta
Bakom (4,117m), Burkland below the 1,300m level (3,676m) and Nygruvan (3,551m) totalled
11,344m, with infill drilling totalling 3,408m.
Surface drilling at Isåsen will be carried out in 2013.
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Figure 9.2: Schematic Long Section of the Mine showing Proposed Exploration Drilling and Drifting Programme for 2012
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9.4
Exploration Budget 2013
A total of 26.5km of underground drilling has been planned for 2013 at a cost of US$2.73M;
together with 1,346m of exploration drifting (of which 200m will be on the Mellanby drill
cross cut drift (650m level) and 1,146m on the drill cross cut drift plus ventilation to Dalby)
at a cost of US$4.88M. An additional budget of US$76k has been included to conduct a
geophysical EM 3-4 survey over the Isåsen target area.
A summary of the exploration programme for 2013 is given in Table 9.2 and shown
schematically in Figure 9.3 below.
Table 9.2: Exploration Programme for 2013
Drilling Type
Pure Exploration
Sub total
Upgrade Drilling
Sub total
Infill Drilling
Sub total
Total
Target
Borta Bakom
Dalby
Burkland Copper
Burkland Lower
Isåsen
West Nygruvan
East Nygruvan
Borta Bakom
Mellanby
Savsjon
Burkland Copper
Burkland Lower
Nygruvan
Block 205
Knalla
to
Nygruvan
(plus
copper target)
Metres
(m)
1,000
1,000
600
3,500
3,000
1,500
1,000
11,600
1,500
3,300
1,500
600
900
3,000
Comment
Locatestructure
10,800
4,100
4,100
26,500
WAI has reviewed the proposed budget proposed for 2013 and considers it adequate to
cover those areas of exploration drilling that have been proposed.
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Figure 9.3: Schematic Long Section of the Mine showing Proposed Exploration Drilling and Drifting Program for 2013
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10
DRILLING
10.1
Introduction
Diamond drilling data are the only data used for resource definition, stope definition and
grade control. In the last 10 years between 5,700 and 34,000m of drilling have been
completed on the mine site annually and approximately 20% of that was of a
reconnaissance nature.
Reconnaissance drilling for new mineralisation is normally carried out from exploration
drifts and underground holes may be up to 1,200m in depth. Occasionally surface holes are
drilled.
To qualify as Inferred Resources drill spacing is generally 100m vertically by 100m
horizontally with no mineralisation exposed by development. Indicated Resource drill
spacing is in general 50 by 50m with some mineralisation exposed by development.
Measured Resources have drill spacing of 30 to 50m and are often well exposed by
development. Stope definition holes generally have a maximum spacing of 15 to 20m.
Diamond drilling is done by contractors. Holes over 100m in length are surveyed using a
Maxibor instrument with readings taken every 3m. Core size is generally 28 - 36mm for
underground holes and 28 – 39mm for surface holes. Recovery is considered excellent,
averaging near 100%.
Drill core is delivered to a modern, well lit core shed on the mine site. It arrives in labelled
wooden core trays. The geologist calculates Q values (a geotechnical measurement
combining several measures) and proceeds to geologically log the core using Prorok a
software (developed and employed in Sweden) data entry module and predefined
lithological codes. There is also a provision for a written description. One geologist is
assigned to enter all drill logs into the database.
10.2
Core Logging and Sampling
All core produced is subject to geological and geotechnical logging. Core logging is
undertaken in a well-lit logging facility as shown in Photo 10.1 below. Logging data is
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entered directly into a digital database using Prorok® software (developed and employed in
Sweden). The software enables all basic geological characteristics such as rock type,
mineralisation style, colour, texture, and structure to be entered into the database using a
set of pre-defined codes. The geotechnical Q value is also assessed and entered in to the
database.
The geologist marks the "from - to" for assay samples on the box and this "from - to" serves
as the sample number, which he or she enters on a sample record sheet. The geologist
defines sample intervals which are governed by lithology, sulphide content and a maximum
sample length of 2.0m (minimum of 0.10m). The request for analysis follows the sample
from the core shed until the sample has undergone all stages of sample preparation.
Photo 10.1: Zinkgruvan Core Logging Facility
A technician splits the core using a hydraulic splitter and then places the split portion in a
bag marked with the sample number supplied by the geologist. A diamond saw is used
occasionally. The drill core samples are transported in manually labelled paper bags to the
sample preparation facility.
Since 2007, photographs have been taken of all drill cores. In-fill drilling cores are disposed
of after logging and sampling.
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The core logging and sampling procedures employed at Zinkgruvan are considered by WAI to
be generally excellent.
10.3
Core Storage
The exploration drill core storage boxes are all stored in a warehouse on site adjacent to the
core logging facility. The store is maintained to a very high standard and well secured, as
shown in Photo 10.2.
Photo 10.2: Core Storage Facility
10.4
Drilling Results
10.4.1 Dalby
The Dalby Exploration target lies to the NW of the current mine workings and was
historically drilled from surface during 2006 to 2008. A summary of results from these drill
hole intersections, which appear promising is given in Table 10.1 and a plan showing the
location of the pierce points from these holes into the structure shown in Figure 10.1 below.
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Table 10.1: Summary of Drill Intersections fromm Surface Drilling at Dalby
HoleNo.
1270
1271
1272
2156
2449
2549
2588
2647
2843
2844
2845
2846
2847
2884
2885
2886
2912
2913
2914
2916
2917
2918
3015
3094
3095
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From
(m)
To
(m)
Length
(m)
720.11
727.53
7.42
797.30
1,138.17
807.43
1,152.21
10.13
14.04
1,067.47
1,136.00
916.00
1,029.75
1,092.75
1,167.22
894.37
836.33
805.38
1,073.77
1,142.76
922.00
1,035.75
1,099.69
1,173.68
914.55
920.84
813.90
6.30
6.76
6.00
6.00
6.94
6.46
20.18
84.51
8.52
925.49
1,032.47
766.57
928.99
1,012.93
958.88
1,035.83
774.20
951.39
1,020.02
33.39
3.36
7.63
22.40
7.09
992.27
1,143.53
816.28
997.13
1,144.64
834.50
4.86
1.11
18.22
526.69
529.26
2.57
Zn
(%)
Barren
Barren
10.50
Trace
14.35
10.84
Trace
9.91
9.91
1.47
11.46
18.60
7.33
8.50
9.99
7.25
Barren
Barren
6.77
4.76
25.70
5.71
4.53
Trace
6.88
8.63
9.63
Barren
Trace
6.03
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Pb
(%)
Ag
(g/t)
Cu
(%)
0.55
19
0.03
4.77
5.76
111
121
0.01
0.14
0.18
8.28
1.61
0.09
0.23
4.22
1.08
8.33
5.12
56
117
73
4
29
89
54
143
98
1.07
0.01
0.01
0.00
0.04
0.01
0.34
0.09
0.01
0.64
3.56
2.40
4.03
4.86
28
41
43
131
62
0.07
0.00
0.03
0.05
0.01
0.01
1.23
2.74
3
61
60
0.01
0.08
0.01
0.17
5
0.01
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Figure 10.1: Location of Surface Drill Hole Pierce Points into Dalby Exploration Target
(Limits of the Extrapolated Dalby Zone (shown in Red – north at top of view)
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From underground, an exploration cross cut drift has been established on 1,130m level from
Burkland to Dalby. A total of 1,146m of drifting is planned for 2013. Once the drift is
completed, uphole fan drilling into the Dalby structure will be conducted from the end of
this drive in 2015. A schematic cross section to show the underground position of the Dalby
structure in relation to known structures within the mine is illustrated in Figure 10.2 below.
Figure 10.2: Schematic Cross Section showing the Position of Dalby Exploration Drift in
Relation to Known Structures within the Mine
10.4.2 Isåsen
An exploration drift has been put out through the hangingwall of the Nygruvan structure on
1,100m level in order to provide a drill position to target a structure thought to lie NNE
beneath Isåsen. The structure here is postulated to represent the upturned limb of a
synclinal structure that contains Nygruvan (Figure 10.3).
The first hole is currently at a depth of 850m, but progress is slow due to poor in-hole
ground conditions and high saline water make. Further drilling both from surface and
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underground will continue throughout 2013. A second hole from a similar position on the
965m level has recently been started.
Figure 10.3: Schematic Cross Section showing the Underground Exploration Drill Hole 3672
from Nygruvan Exploration Drive to Isåsen
(and Surface Drill Hole into same Target Zone)
10.4.3 Mellanby
A short (150m) exploration drift is being driven on the 650m level towards in order to be in
a position to drill down into Mellanby. This drift is planned to be completed in May 2013,
when drilling will commence.
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11
SAMPLE PREPARATION, ASSAYING AND SECURITY
11.1
Sample Preparation
Sample preparation is carried out on site within a section of the process analytical
laboratory.
The core is first dried and then crushed to <5mm using a jaw crusher. Following crushing,
the sample is mechanically split to 100-150g using Jones’ Riffles. Before 2002 a Tema mill
was employed for grinding; since then, however, an automated Herzog pulveriser has been
employed which can run 60 samples at a time with samples being reduced to <36 microns.
Cleaning of the pulveriser is automatically carried out after each sample run using
compressed air and water.
The prepared samples are bagged up and packed into cardboard boxes for shipping to ACME
Analytical Laboratories in Vancouver. Duplicates, dolerite blanks and samples for external
checks are also bagged and packed with the sample batch.
11.2
Analysis
11.2.1 Pre 2002
Prior to 2002, all samples were assayed at Zinkgruvan’s own on-site laboratory by Atomic
Absorption Spectroscopy (AAS). Samples were analysed for Pb, Zn, Ag, Cu, Fe, Co, and Ni,
with samples subjected to two separate digestions:

250mg of pulp was boiled in 10ml of HNO3. HF was added and boiled off the
sublimate being re-dissolved in HCL; the sample was then diluted to 250ml in
H2O and analysed for Zn, Pb, Ag, Cu, and Fe by AAS; and

500mg of pulp was boiled in 15ml of aqua regia; the solution was reduced
before being dissolved in H2O to analyse for Co and Ni by AAS.
The Zinkgruvan on-site laboratory AAS detection limits are shown in Table 11.1.
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Table 11.1: Zinkgruvan On-Site Laboratory
AAS Detection Limits For Geological Samples
Element
Zn
Pb
Ag
Cu
Fe
Co
Ni
Detection Limit
0.05 %
0.05 %
5 g/t
5 ppm
0.02 %
5 ppm
5 ppm
Analytical results were collected manually and entered by hand, first on the original request
for analysis, and then entered manually into Excel spreadsheets with the same format as the
request for analysis. Data were entry checked by the laboratory personnel before release to
the project geologists. The project geologist then checked the correspondence between the
assay results and the geological logging before the data were approved for incorporation in
the drillhole database.
11.2.2 Post 2002
Since 2002 all samples have been assayed by ACME Analytical Laboratories in Vancouver
where approximately 12g of pulp sample (40g since 2008) are shipped. ACME Analytical
Laboratories has an ISO/IEC 17025:2005 accreditation. The laboratory run assays using ICPES; 1g of pulp is diluted in 100ml of aqua regia which is then submitted for ICP-ES to analyse
for 23 elements: Zn, Pb, Ag, Cu, Co, Ni, Al, As, Bi, Ca, Cd, Cr, Fe, Hg, K, Mg, Mn, Mo, Na, P, Sb,
Sr, and W. ACME detection limits for ICP-ES analysis for the main elements are shown in
Table 11.2. Ag assays reporting over 700ppm are submitted for fire assay analysis using a
30g charge.
Table 11.2: ACME ICP-ES Method Detection
Limits
Element
Ag
Co
Cu
Fe
Ni
Pb
Zn
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1g/t
0.0005%
0.0005%
0.01%
0.001%
0.005%
0.005%
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11.3
QA/QC
A systematic QA/QC programme was implemented in 2001 and was fully up and running in
2002. Duplicates and blanks are inserted into the sample stream prior to shipment to ACME.
External assay checks are carried out by ALS Chemex, Vancouver. The results of the assaying
are continually reviewed by Zinkgruvan geological staff. Where any failed values are
detected the three primary samples either side of this sample are re-submitted for analysis.
11.3.1 Duplicates
Pulp duplicate samples are inserted into the sample stream at a frequency varying from
between every 21st and every 25th sample. The duplicate results are rigorously compared to
the original to monitor analytical precision as well as any potential bias in the process
caused by improper cutting of sample, homogeneity, washing during cutting or loss of fines
during preparation. The results of the 2011/2012 duplicate assaying are shown in Figure
11.1, Figure 11.2, Figure 11.3 and Figure 11.4 and indicate an acceptable level of precision.
Figure 11.1: Log Scatter Plot of Duplicate Comparison for Zinc
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Figure 11.2: Log Scatter Plot of Duplicate Comparison for Lead
Figure 11.3: Log Scatter Plot of Duplicate Comparison for Silver
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Figure 11.4: Log Scatter Plot of Duplicate Comparison for Copper
11.3.2 Blanks
Diabase blanks are inserted at a frequency of between every 21st and 23rd sample to
monitor contamination in the sample preparation and analysis. The 2011/2012 results for
zinc and lead and silver and copper are shown in Figure 11.5, Figure 11.6 and Figure 11.7.
The results indicate that contamination is not a specific problem.
Figure 11.5: Blank Results – Zinc and Lead
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Figure 11.6: Blank Results - Silver
Figure 11.7: Blank Results - Copper
11.3.3 Standards
GeoStats certified standard samples are inserted between every 19th and 21st sample. A
summary of the standards used in 2011/2012 are shown in Table 11.3. Example results of
the assaying of the standard samples are shown in Figure 11.8, Figure 11.9 and Figure 11.10.
The results indicate that a reasonable level of accuracy has been attained in the analysis.
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Table 11.3: Standards with Accept Values
Zinc
Standard
Zn (%)
Name
310-16
17.15
908-12
2.52
908-14
4.27
909-13
6.84
Lead
Standard
Pb (%)
Name
310-16
11.32
908-12
1.09
908-14
3.30
909-13
0.85
Silver
Standard
Ag (%)
Name
310-16
315.8
908-12
22.0
908-14
303.7
909-13
127.3
Copper
Standard
Cu (%)
Name
302-9
1.27
310-16
0.36
908-12
0.26
908-14
2.37
909-13
3.21
Figure 11.8: Standard 909-13 for Zinc
Figure 11.9: Standard 908-14 for Lead
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Figure 11.10: Standard 310-16 for Silver
11.3.4 External Checks
External check samples are selected for every 23rd and 27th sample and pulp duplicate
samples are submitted for analysis at ALS Chemex, Vancouver. Results of the 2011/2012
external check assaying are shown in Figure 11.10, Figure 11.11, Figure 11.12 and Figure
11.13. Overall a good correlation between the ACME and ALS laboratories is shown in the
check assaying.
Figure 11.10: External Duplicates for Zinc
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Figure 11.11: External Duplicates for Lead
Figure 11.12: External Duplicates for Silver
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Figure 11.13: External Duplicates for Copper
11.4
Adequacy of Procedures
A rigorous QAQC programme was implemented in 2002 and these procedures have been
maintained since this date. WAI believes that the sampling, sample preparation, assaying
and security measures in use at Zinkgruvan conform to standard industry practice, or better.
In addition, the field procedures used by Zinkgruvan Mining AB are in line with industry best
practice and the accepted sample results provide a representative estimate of the
Zinkgruvan mineralisation.
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12
DATA VERIFICATION
WAI has visited Zinkgruvan on several occasions, to review the geology, exploration work
and Mineral Resource estimation processes. The following aspects were inspected during
these visits:

The geological and geographical setting of the Zinkgruvan deposit;

The extent of the exploration work completed to date;

Inspection of the core logging, sampling and storage facilities;

Inspection of the core and a review of the logging procedures;

Review of the sampling and sample preparation procedures;

Discussions with the geological staff regarding geological interpretation;

Visits to the on-site assay laboratory and discussions on procedures and
quality issues;

Review of the reconciliation of planned versus broken versus milled versus
the resource model; and

Visits to underground exposures of the mineralisation in working stopes.
Limited QA/QC data exists for the historical assaying carried out at the Zinkgruvan on-site
laboratory prior to 2002. WAI has reviewed the location of the holes drilled prior to 2002
(up to Drillhole 1760 in the drillhole database) in relation to the current mineral resource. It
is considered by WAI that the majority of these historical drillholes are located in areas since
depleted by mining and that their influence on the current mineral resource estimate is
minimal.
WAI was able verify the quality of geological and sampling information. The underlying data
supporting the resource estimate is considered by the author to be generated and input into
the corresponding resource models in a satisfactory manner. Given the operating history of
Zinkgruvan and the on-going reconciliation studies, WAI considers that the sampling and
assay information to be reliable and has therefore not carried out any check sampling or
assays. WAI believes that reliance can therefore be placed on the information contained
within the Zinkgruvan database in this respect.
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13
MINERAL PROCESSING AND METALLURGICAL TESTING
13.1
Grindability Testwork
Orway Minerals Consultants (OMC) undertook AG/SAG modelling work to ascertain if the
ore could be treated using FAG, negating the requirement for pre-screening and crushing.
To acquire necessary inputs into their model, comminution testwork was undertaken by SGS
Lakefield. Testwork was undertaken on samples of zinc and copper mineralisation. For each
sample, one main composite and two variability samples (representing high and low grade)
were tested. The SGS tests undertaken on the main composite samples showed that:

The samples tested were soft to moderately soft in terms of their resistance
to impact breakage (SMC tests);

Bond Crusher Work Index (CWI) tests categorised the samples from the
moderately hard to hard range of hardness; and

Bond Ball Work Index (BWI) tests showed the samples to be between soft to
medium range in terms of hardness.
It was consequently decided that zinc ore will be treated through a new higher capacity AG
mill. Simulation studies were undertaken by OMC, who recommended that a 7.32m
diameter by 6.7m long mill fitted with a 4.5MW motor would achieve a target grind size of
90µm. A further plant trial was undertaken in September 2012, using copper ore treated
through the existing AG mill to establish the ability of the existing zinc mill to treat the minor
tonnage of copper ore. The results indicated that the mill adequately handled the ore at a
rate of 50tph without loss in metallurgical performance.
The detailed Feasibility Study will provide more accurate costing. As part of the Feasibility
Study, WAI recommends that confirmatory testwork is undertaken to ensure that the ores
are amenable to FAG technology.
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13.2
Beneficiation Studies
13.2.1 Copper
13.2.1.1 Optimet, 1997
Initial testwork was undertaken by Optimet in 1997. The test sample contained 3.35% Cu,
0.26% Zn, 10g/t Ag, 3.5% S, 0.04% Ni, 0.032% Co and 200g/t As. Initial mineralogical
observations indicated that fine grinding is likely to be necessary in order to liberate
chalcopyrite from gangue minerals.
Flotation tests were undertaken with a simple reagent suite containing a frother and
xanthate collector at natural pH (8.5-8.7). Flotation residence times of 12-20 minutes were
used during roughing while 10 and 8 minutes were used during cleaner stages 1 and 2
respectively.
In the initial flotation tests, it was shown that at a copper concentrate containing 23.9% Cu
at a recovery of 92% could be obtained at a grind of 80% passing 75µm. Finer grinding
(40µm) increased the copper concentrate grade to 28.8% Cu at a recovery of 91.3%. The
content of zinc in the concentrate (2.4% Zn) remained below penalty limits (3% Zn).
13.2.1.2 MinPro, 1999
Later testwork was undertaken in 1999 by MinPro, a Swedish mineral laboratory contractor.
MinPro tested a mineralised copper sample containing 3.9% Cu, 0.79% Zn, 55g/t Ag, 0.071%
Ni, 0.055% Co and 4.5% S.
In initial tests, MinPro used conditions derived from Optimet’s testwork programme. A
copper concentrate grade of 27.9% Cu at a recovery of 93.2% was obtained. However, it was
shown that the copper concentrate assayed some 5% Zn. Consequently, in subsequent tests,
SO2 was used to depress zinc. With the use of SO2, a copper concentrate containing 0.76%
Zn could be obtained (the copper content of this copper concentrate was 29.3% Cu at a
recovery of 92.3%). It was concluded that the copper concentrates will not contain any
penalty elements provided zinc is sufficiently depressed.
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Mineralogical investigations by SGAB Analytica verified that chalcopyrite and sphalerite
were well liberated in the particle size range +20 microns. It was shown that some
chalcopyrite seems to occur as small inclusions in gangue minerals (in the tailing product).
Gangue minerals are predominately calcite-dolomite, muscovite, quartz, biotite and
amphibole. Arsenic is shown to be bound to tetrathedrite-tennantite.
13.2.1.3 MinPro, 2007-2008
During 2007-2008, MinPro undertook a pilot plant trial on a 100t copper mineralised sample
(hoisted from mine development on the 800m level). The pilot plant test shows that a
copper concentrate can be produced grading 25% Cu with a recovery of >92%. The results
are shown in Table 13.1 below.
Table 13.1: Copper Metallurgical Testwork Results
Products
Weight (%)
Cu Grade (%)
8.8
91.2
100.0
25.4
0.19
2.4
Cu conc.
Tailings
Feed
Ag Grade
(g/t)
150
4
17
Cu Recovery
(%)
92.8
7.2
100.0
Ag Recovery
(%)
78.4
21.6
100.0
The copper concentrate from this pilot plant test had high grades of arsenic, at 0.9%.
However, the bench scale tests shows that the arsenic content in the concentrate can be
depressed to <0.4% if the pH in the flotation circuit is high or a special copper collector is
used.
13.2.2 Lead-Zinc
No recent metallurgical studies have been undertaken as there are no significant new
orebodies in the 10 year mine plan.
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14
MINERAL RESOURCE ESTIMATES
14.1
Introduction
The Zinkgruvan mineral resource estimates have been produced by Zinkgruvan and Lundin
Mining and were audited by WAI. The majority of the Zinkgruvan orebodies have been
modelled using 3d block modelling. The polygonal method is also used but is mainly limited
to minor orebodies and orebodies at early stages of resource evaluation. A summary of the
resource estimation method used by mining area for Nygruvan and Knalla areas of
Zinkgruvan Mine are shown in Table 14.1 and Table 14.2, respectively.
Table 14.1: Nygruvan Area Resource Estimation Methods by Mining Area
Location
300
650
1140
305 E
1130
Nygruvan
410
455
1000
819-1070
1170
1100
1320
1290
B
205
K
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96-97
10
C
950
240-260
Rec. Pillar
10
G
D
205
C
F
240-260
A
1340
1280
1170
Final V3.0
Resource Estimation Method
Polygonal
Block Model
Block Model
Polygonal
Block Model
Block Model
Block Model
Block Model
Block Model
Block Model
Block Model
Block Model
Block Model
Block Model
Block Model
Block Model
Block Model
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Table 14.2: Knalla Area Resource Estimation Methods by Mining Area
Location
Burkland
Burkland Hängmalm
Cecilia
Borta Bakom
150
350
250
I
Sävsjön
Mellanby
Copper Zone
14.2
Mining Area
450
650
960
1125
1300
1365-1500
1500-1650
Rec. Pillar
1025-1145
341-680
240-341
570-650
525-750
I
J
U
150
450
560
570-680
770-830
550-1060
1060-1125
1260
Rec. Pillar
Resource Estimation Method
Block Model
Block Model
Block Model
Block Model
Block Model
Block Model
Block Model
Block Model
Block Model
Block Model
Block Model
Block Model
Block Model
Polygonal
Block Model
Polygonal
Polygonal
Polygonal
Polygonal
Polygonal
Polygonal
Block Model
Block Model
Block Model
Block Model
Drillhole Database
Drillhole co-ordinates, assays, and down-hole surveys are stored in an Oracle® database.
Assay values are uploaded into the database from Excel worksheets that have been sent
from ACME Analytical Laboratories. Prior to uploading of the assay data a rigorous statistical
assay check is carried out on the data. The database is kept on a server which provides
access to the database from both surface and underground offices. The database also links
directly into the mine planning software. The geological database at Zinkgruvan is well
structured and is well maintained.
WAI is impressed by the rigorous statistical analysis of laboratory assay results by the
geologist prior to upload preventing erroneous values being included in the database.
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14.3
Mineralised Zone Interpretation
Mineralised zone interpretation is carried out for the zinc and copper zones separately. For
areas where 3d block modelling is carried out wireframes depicting the mineralisation for
each orebody are constructed in Microstation ® software based on drillhole data and
underground mapping data.
A cut-off grade of 3.8% Zn equivalent (based on the average NSR value for the mine and
calculated from the equation: NSR=Zn(%)*86+Pb(%)*92+Ag(g/t)*0.4) is used to define the
mineralisation in the zinc zones. Because the footwall and hangingwall contacts within the
zinc zones are geologically well defined WAI consider this cut-off grade to be generally
reflective of a geological cut-off.
A cut-off grade of 1.0% Cu is used to define the copper zone mineralisation. Separate
wireframes are constructed for the footwall and the hangingwall. The wireframes are also
constrained by major mined out areas. Mineralised zone wireframes for Zinkgruvan are
shown in Figure 14.1 and Figure 14.2. Additional wireframes and strings of the mined out
stopes and underground development are also constructed separately for depletion
purposes.
Figure 14.1: Isometric View of Zinkgruvan Mineralised Zone Wireframes
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Figure 14.2: Isometric View of Knalla Area and Showing Copper Zone Mineralisation
14.4
Drillhole Data Processing
Drillhole samples located within the mineralisation wireframes are selected for further data
processing. A 2m composite interval was applied to these samples to standardise the
sample lengths for both the zinc and copper ore zones. No top-cutting of the dataset was
carried out. WAI have reviewed the selected sample database and identified minor outlier
values to be present; however given the nature and style of the mineralisation encountered
at Zinkgruvan, the influence of these values is considered to be insignificant.
14.5
Variography
Variography has been carried out for Zn, Pb, Ag, Cu, Ni, Fe and Co independently for each
orebody. The spherical scheme model was used to derive variogram parameters from the
experimental semi-variograms. The principal direction of continuity was selected from the
generated experimental semi-variograms and modelled with two structure spherical
models. The variography used the 2.0m composite data and nugget variances were
modelled from the downhole variograms. Examples of the modelled semi-variograms for Zn,
Pb and Ag in the Burkland zinc zone are shown in Figure 14.3, Figure 14.4 and Figure 14.5.
Overall the semi-variograms generated were considered to be well structured and
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interpretable with the exception of Cecelia, Borta Bakom, J and 205 orebodies. Modelled
semi-variograms were therefore not generated for these orebodies.
Figure 14.3: Semi Variograms for Zn – Burkland Zinc Zone
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Figure 14.4: Semi Variograms for Pb – Burkland Zinc Zone
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Figure 14.5: Semi Variograms for Ag – Burkland Zinc Zone
14.6
Block Modelling
The geology department at Zinkgruvan uses the Prorok® block modelling system as their
primary geological modelling software. The system is designed as a block modelling module
to run on Microstation® CAD software. Prorok® allows the creation of a volumetric block
model with sub-cell subdivision up to 1/16 of the master block. The location of each master
block is stored as (I,J,K) indices that refer to row, column and level positions. Four additional
fields in the volumetric block model table indicate the level of sub-blocking and sub-cell
position (octant) in the master block. A parent cell size of 10m x 5m x 10m (x,y,z) was used
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for the block models located within the Knalla area. A parent cell size of 5m x 10m x 5m
(x,y,z) was used for the block models in the Nygruvan area. A minimum of two sub-cell splits
to the parent cell were allowed where additional cell resolution was required. Block models
are stored in the Oracle® database which links directly into Microstation®.
14.7
Grade Interpolation
14.7.1 Block Model Grade Interpolation
Grade interpolation was carried out using Prorok® software. Ordinary Kriging was used as
the principle grade interpolation method for all block model orebodies with the exception of
Cecilia, Borta Bakom, J and 205 where inverse distance weighting squared (IDW) was used
as the principle interpolation method due to the poorly structured variography in these
areas. Grade interpolation was carried out using a single pass method where the search
parameters used were approximate to the ranges for each direction. A minimum of 2
composites and a maximum of 10 composites were required during the grade estimation.
Estimated grades are stored in a separate table and linked to the volumetric model table via
a special key field. A summary of the grade estimation parameters used at Zinkgruvan are
shown in Table 14.3. Industry best practice would typically involve a 3 pass grade estimation
using incrementally increasing search radii based on the variography for each metal and a
requirement for composites from 2 or more drillholes to estimate blocks during at least the
first and second searches. However, given the density of the drillhole data and the
composite sample requirement WAI considers that the number of blocks (particularly within
the Measured and Indicated resource categories) that could have been estimated from only
one drillhole to be insignificant. WAI considers that the grade interpolation carried out at
Zinkgruvan to be generally robust.
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Table 14.3: Summary of Zinkgruvan Search Parameters
Ore Body
Burkland
Nygruvan
Cecilia
Borta-Bakom
Copper Zone
Element
Zn
Pb
Cu
Ag
Co
Fe
Ni
Zn
Pb
Cu
Ag
Co
Fe
Ni
Zn
Pb
Cu
Ag
Co
Fe
Ni
Zn
Pb
Cu
Ag
Co
Fe
Ni
Cu
Zn
Pb
Fe
Ag
As
Sb
Bi
Hg
Along Strike (m)
80
108.5
90
124.5
63
70
99
103
101
101
136
120.5
110.5
68.5
90
90
90
90
90
90
90
100
100
100
100
100
100
100
60
95
100
90
84
102
80
70
95
Search Radius
Down Dip (m)
38
40.5
39.5
40.5
32
39.5
38
80
91.5
78
78
85.5
67
58.5
60.3
60.3
60.3
60.3
60.3
60.3
60.3
100
100
100
100
100
100
100
30
51
30
48
44
57
50
42
80
Across Strike (m)
20.5
5.5
27
36
10.5
10
17
4.5
10
8
6
7
6
11
8.01
8.01
8.01
8.01
8.01
8.01
8.01
40
40
40
40
40
40
40
14
36
30
13
35
50
42
27
53
NB –
1.
Burkland, Nygruven (with the exception of Nygruvan 205 area) and copper zone areas estimated using Ordinary Kriging. All
other areas estimated by Inverse Distance Weighting.
2.
Maximum of 10 composites and minimum of 2 composite used for all estimations.
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14.7.2 Polygonal Estimation
Polygonal estimation is carried out in MS Excel spreadsheets along with Microstation® CAD
software for the measurement of polygon areas. Drillhole intersection centres, which have
been composited on their entire thickness, are plotted on a vertical longitudinal projection.
Density is used as a weighting factor in the intersection average grade calculation. The
horizontal thickness is calculated using the angle between the intersection angle and the
local orebody orientation. Irregular polygons are drawn around each drillhole intersection
on the vertical projection. The polygon areas are calculated using Microstation® CAD
software. The volume and tonnage of each polygon is then calculated. The tonnage of the
orebody is calculated as a sum of the tonnage of each polygon, whereas grade is estimated
as a weighted average.
14.8
Density
Density for the Zn-Pb resources is estimated by the following formula:
SG 
100
100  Zn% 1.49  Pb% 1.15 Zn% 1.49 Pb% 1.15


2.7
4.0
7.5
The formula estimates sphalerite and galena content as a function of grade. A density of
2.7t/m3 is assumed for the host rock with the theoretical densities of sphalerite and galena
used for the density calculation. The reliability of this formula is tested by water
displacement tests and reconciliation between the estimated tonnage and the actual mined
tonnage. Apart from sphalerite and galena, the Zinkgruvan Zn-Pb mineralisation contains
very few sulphide minerals and, therefore, the density formula should provide accurate SG
estimations. A constant density of 2.86t/m3 is used for the copper zone mineralisation.
Reliability of the density estimations has been tested and proven by reconciliation of
estimated tonnage against the actual processed tonnage.
14.9
Resource Classification
Mineral resources are classified on the basis of the drill hole spacing, presence of
underground development and soundness of structural interpretation. In general, a 100m ×
100m drill hole spacing is required to classify resources in the Inferred category. An area
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drilled at 50m × 50m, with some mineralisation exposed by underground development, will
be classified as Indicated; the Measured category requires 30m-50m drill hole spacing and
good exposure of the mineralisation in development. The current reserve and resource
areas of the Knalla areas of Zinkgruvan are illustrated in Figure 14.6 and the current reserve
and resource areas of the Nygruvan areas of Zinkgruvan are illustrated in Figure 14.7.
Figure 14.6: Knalla Reserve and Resource Classifications by Area (Zinkgruvan, 2012)
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Figure 14.7: Nygruvan Current Reserve and Resource Classifications by Area
(Zinkgruvan, 2012)
14.10 Mineral Resource Evaluation
A summary of the Mineral Resource Statement for zinc and copper at Zinkgruvan as of 30
June 2012 are given in Table 14.4 and Table 14.5, respectively.
A cut-off grade of 3.8% Zn equivalent (based on the average NSR value for the mine and
calculated from the equation: NSR=Zn(%)*86+Pb(%)*92+Ag(g/t)*0.4) is used to define the
mineralisation in the zinc zones. Because the footwall and hangingwall contacts within the
zinc zones are geologically well defined WAI consider this cut-off grade to be generally
reflective of a geological cut-off.
A cut-off grade of 1.0% Cu is used to define the copper zone mineralisation.
The stated mineral resources are not materially affected by any known environmental,
permitting, legal, title, taxation, socio-economic, marketing, political or other relevant
issues, to the best knowledge of the author. There are no known mining, metallurgical,
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infrastructure, or other factors that materially affect this mineral resource estimate, at this
time.
Table 14.4: Total Mineral Resources for Zinc at Zinkgruvan
(30 June 2012)
Tonnage
Measured
Indicated
Measured
+
Indicated
Inferred
Grade
Metal
kt
8,682
5,876
Zn (%)
10.5
9.7
Pb (%)
5.0
4.9
Ag (g/t) Cu (%)
107
0.0
101
0.0
14,558
10.2
5.0
105
4,553
8.9
3.3
78
Zn (kt)
912
570
Pb (kt)
434
288
Ag (Moz)
30
19
Cu (kt)
0
0
0.0
1,482
722
49
0
0.0
405
150
11
0
Table 14.5: Total Mineral Resources for Copper at Zinkgruvan
(30 June 2012)
Tonnage
Measured
Indicated
Measured
+
Indicated
Inferred
Grade
Metal
kt
5,292
587
Zn (%)
0.4
0.3
Pb (%)
0.0
0.0
Ag (g/t) Cu (%)
30
2.3
34
2.3
5,879
0.4
0.0
30
622
0.4
0.0
31
Zn (kt)
21
2
Pb (kt)
0
0
Ag (Moz)
5
0.6
Cu (kt)
122
14
2.3
23
0
5.6
136
1.7
3
0
0.6
11
Note: The Zinkgruvan Mineral Resource and Reserve estimates are prepared by the mine's
geology and mine engineering department under the guidance of Lars Malmström, Resource
Manager, employed by Zinkgruvan mine. Qualified Persons are Graham Greenway and
Stephen Gatley. These estimates have been audited by WAI in November 2012.
Mineral Resources are inclusive of Mineral Reserves - 100% attributable to Lundin
The Mineral Resource and Mineral Reserves are reported and prepared in accordance with
the requirements of National Instrument 43-101 and the guidelines published by the Council
of the Canadian Institute of Mining, Metallurgy and Petroleum (¨CIM Standards¨).
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14.11 Comparison with Previous Mineral Resource Estimates
A comparison of the 2011 (as of 30 June 2011) and 2012 (as of 30 June 2012) mineral
resource estimates for Zinkgruvan zinc and copper zones are shown in Table 14.6. Overall
the combined Measured and Indicated mineral resources increased by 600kt in the zinc
zones and 403kt in the copper zone.
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Table 14.6: Comparison of 2011 vs 2012 Zinc and Copper Mineral Resources
8,464
5,494
30 June 2011
Grade
Zn
Pb
Ag
(%)
(%)
(g/t)
11.0
5.5
119
10.4
4.6
93
13,958
10.8
5.1
109
0.0
5,572
9.6
3.2
69
0.0
Tonnage
(kt)
Measured
Indicated
Measured +
Indicated
Inferred
ZT61-0996/MM775
January 2013
14,558
10.2
5.0
Cu
(%)
0.0
0.0
+218
+382
Difference
Grade
Zn
Pb
Ag
(%)
(%)
(g/t)
-0.5
-0.5
-12
-0.7
+0.3
+8
Tonnage
(kt)
Cu
(%)
-
105
0.0
+600
-0.6
-0.1
-4
-
0.0
-1,019
-0.7
+0.1
+11
-
5,304
172
30 June 2011
Grade
Zn
Pb
Ag
(%)
(%)
(g/t)
0.5
0.0
29
0.3
0.0
35
4,553
8.9
3.3
78
Copper Mineral Resources
30 June 2012
Tonnage
Grade
(kt)
Cu
Zn
Pb
Ag
(%)
(%)
(%)
(g/t)
2.2
5,292
0.4
0.0
30
2.5
587
0.3
0.0
34
Cu
(%)
2.3
2.3
5,476
0.5
0.0
29
2.2
5,879
0.4
0.0
30
772
0.2
0.0
36
2.2
622
0.4
0.0
31
Tonnage
(kt)
Measured
Indicated
Measured +
Indicated
Inferred
Cu
(%)
0.0
0.0
Zinc Mineral Resources
30 June 2012
Tonnage
Grade
(kt)
Zn
Pb
Ag
(%)
(%)
(g/t)
8,682
10.5
5.0
107
5,876
9.7
4.9
101
Final V3.0
-12
+415
Difference
Grade
Zn
Pb
Ag
(%)
(%)
(g/t)
-0.1
+1
0.0
-1
Cu
(%)
+0.1
-0.2
2.3
+403
-0.1
-
+1
+0.1
1.7
-150
+0.2
-
-5
-0.5
Tonnage
(kt)
Page 84
LUNDIN MINING
NI 43-101 Technical Report for Zinkgruvan
Mine, Central Sweden
15
MINERAL RESERVE ESTIMATES
15.1
Mineral Reserve
The primary tools used for Mineral Reserve Estimation at Zinkgruvan are Microstation and
Prorok ®. Mineral Reserve Estimation at Zinkgruvan is integrated with resource modelling
and classification.
Stoping and development plans are constructed using the CAD programme, Microstation®.
The footwall and hangingwall wireframes produced in Prorok® are then superimposed over
the plans. Manual adjustments to the wireframes are made to reflect new geological
interpretations derived from mapping and drilling data and current economic conditions.
Stope volume is calculated from the hangingwall and footwall wireframes and the resultant
model is evaluated against the block model to calculate the grade and tonnage of each
stope. Development drives located 30m from the orebody footwall are driven into a stoping
area well in advance of production. Infill drilling from the footwall is used to define the
footwall and hangingwall stope boundaries based on a mining cut-off value.
Mined-out areas are routinely surveyed using a Cavity Monitor System (CMS) prior to
backfilling. The CMS produces a wireframe of the stope void which can then be imported
into Microstation®. A single wireframe of the mined-out stopes is produced and this is also
evaluated against the block model in order to calculate the grade and tonnage of the mined
material. The mined-out portion of the orebody is then subtracted from the resource.
The majority of the Mineral Reserves and Resources at Zinkgruvan are hosted by the
Burkland deposit, with a smaller portion remaining in the Nygruvan deposit. Smaller
tonnages are hosted by the Savsjon, Mellanby, Cecilia, and Borta Bakom deposits, all of
which lie to the south west of Burkland (collectively known as Västra fältet). None of these
deposits are fully closed off.
The Zinkgruvan June 2012 Mineral Reserve Estimation is shown in Table 15.1, and the
location of the Proven and Probable Reserves are presented on the long section of Knalla
and Nygruvan in Figure 15.1 and Figure 15.2.
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Table 15.1: Zinc and Copper Mineral Reserve (June 2012)
Zinc Mineral Reserve
30-Jun-12
Grade
Zn (%)
Pb (%)
Ag (g/t)
8,443
9.2
4.4
95
2,421
8.4
2.7
54
10,864
9.0
4.0
86
Copper Mineral Reserve
30-Jun-12
Grade
Tonnage (kt)
Zn (%)
Pb (%)
Ag (g/t)
3,931
0.4
32
77
0.5
34
4,008
0.5
32
Tonnage (kt)
Proven
Probable
Proven + Probable
Proven
Probable
Proven + Probable
15.2
Cu (%)
-
Cu (%)
2.2
2.0
2.2
Mining Cut-Off Value
Zinkgruvan Mine utilises a Net Smelter Return (NSR) calculation to determine the value of
each individual stope or stope block.
The NSR is calculated on a recovered payable basis taking into account copper, lead, zinc
and silver grades, metallurgical recoveries, prices and realization costs.
The cut-off value is based on the variable operating cost of the mining, milling and general
and administration, development cost multiplied by a ratio of the future waste/ore
production; and sustaining capital based on the five year budget.
The June 2012 Reserve Estimation applies different cut-off variables to different mining
areas of the mine;

Burkland and Nygruvan SEK300/t;

Västra fältet SEK420/t; and

Copper Orebody SEK420/t.
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Figure 15.1: Knalla Reserve Classification
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Figure 15.2: Nygruvan Reserve Classification
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15.3
Mining Factors
Factors derived from operational experience for dilution, recovery, backfill dilution and
mining losses are applied to the stopes. The planned mining factors applied to the various
mining areas are summarised in Table 15.2.
Table 15.2: Mining Factors
Mine Area
Dilution (%)
Mining recovery(%)
Ore loss (%)
Backfill dilution (%)
Burkland Cecilia
12
25
97
95
5
5
3
0
Omr 10
25
95
5
0
Ny 240-260
22
95
5
0
cdf
25
95
5
0
Sävsjön Borta B
25
25
95
95
5
5
0
0
Copper
12
95
5
3
The methodology employed for defining Mineral Reserves at Zinkgruvan takes account both
the economic and practical operational constraints of mining the orebodies. The mine
Mineral Reserves are supported by detailed mine plans and appropriate, operationally
derived, dilution and recovery factors applied to the geological resource.
15.4
Reconciliation
Detailed stope reconciliation exercises are undertaken by the staff at Zinkgruvan on an
annual basis. The actual tonnage and grade of ore processed in the mill is compared with
the original mining plan for that year, based on the modelled tonnages and grades.
Stope solids derived from the CMS surveys are loaded into Prorok®. The mined-out stopes
are compared with the original planned stopes and the amount of dilution and any ore
losses are calculated.
The annual reconciliation determined the average mining factors presented in Table 15.3.
Table 15.3: Reconciliation: Average 2012 Stope Mining
Factors (%)
Dilution
Ore addition
Past fill dilution
Ore losses
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11.6
0.4
0.3
10.0
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15.5
Mine Call Factor
Reconciliation of the mine production plan with the plant production defines the mine
tonnage and grade corrections factor.
Table 15.4: Tonnage Correction Factor
All resource areas
0.75
Table 15.5: Grade Correction Factor
Zn
Pb
Cu
Ag
ZT61-0996/MM775
January 2013
0.95
0.94
0.95
0.93
Final V3.0
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LUNDIN MINING
16
MINING OPERATIONS
The long mining history of Zinkgruvan has seen a dramatic development in the technologies
and systems used to mine and process the ores. A new shaft and processing facility was built
in 1977 and since that time new equipment and automation have been introduced to both
the mine and mill operations.
In the mid-1990s, the increasing size of the underground mined out areas, coupled with the
inherently high horizontal ground stress led to increasing difficulty in maintaining stability of
the stope hangingwalls. As a result, the mining methods and sequences were changed and a
new paste backfill system was installed in 2001.
A schematic three dimensional view of Zinkgruvan Mine showing the present operational
mining areas is presented in Figure 16.1.
Figure 16.1: Schematic 3D View Shown the Present Mining Areas
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The Zinkgruvan underground mine has three main shafts with current mining focused
largely on the Burkland and Nygruvan deposits. Shafts P1 and P2 at Nygruvan are 735 and
900m deep respectively, with P1 used for hoisting personnel and P2 used for ore and waste
hoisting, materials and personnel. In 2010, a ramp from surface down to a depth of 350m
was completed, connecting in to the existing internal infrastructure in the mine. The Knalla
shaft, P3, is 350m deep and is not a significant part of the current or future operating plan
and serves only as an emergency egress and to support mine ventilation.
16.1
Geotechnical
16.1.1 The Stress Environment
The virgin (undisturbed) principal stresses are orientated approximately in the horizontalvertical planes. The maximum horizontal stress is orientated east-west, roughly parallel to
the Nygruvan orebody, and roughly perpendicular to the Burkland orebodies. A stress
rotation is evident over the Knalla fault, implying that the fault zone is well healed and
interlocked with the surrounding rock mass. The average stress at 960m in the Burkland
Orebody is ϬH=64MPa, Ϭh=45MPa and Ϭv=28MPa.
The following stress profile represents the stress environment at Zinkgruvan Mine.

ϬH=0.068z;

Ϭh=0.047z; and

Ϭv=0.028z.
Stress measurements undertaken at Zinkgruvan are presented in Table 16.1.
Table 16.1: In Situ Stress Measurements
Ϭ1
Site & Year
Nygruvan
(1983)
Nygruvan
(1983)
Burkland
(1988)
Ϭ2
Ϭ3
Orientation
(°)
206/57
Depth
(m)
790
No of
tests
7
Magnitude
(MPa)
45.6
Orientation
(°)
300/03
Magnitude
(MPa)
31.8
Orientation
(°)
032/33
Magnitude
(MPa)
25.9
825
1
40.1
073/10
25.9
337/28
12.6
181/60
350
1
17.1
067/04
5.5
158/11
1.7
317/78
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16.1.2 Rock Mass Properties
Geological strength index (GSI) is used to describe the rock mass (Table 16.2).
Table 16.2: Geological Strength Index (GSI)
Rock Type
Biotite
Leptite and.or Skarn-leptite
Zinc-lead ore
Limestone/marble
Copper Ore
Quartz feldspar leptite
Reletively competent rock, with GSI typically ranging between 50 and
60 based on estimations and previous experience.
Fairly competent rock with GSI in the range of 50 to 65, although
zones with quality rock occur intermittently.
Competent rock with relatively consistent GSI-rating between 60 and
70, locally up to 80 in areas with very high strength rock with few
structures.
Relatively good rock with GSI in the range of 60 to 65, locally as high
as 80.
Relatively good rock with GSI varying between 55 and 65, locally as
high as 80 with few fractures
Very good rock with GSI ratings in the range of 70 to 82, with little
variation in the exposed areas.
16.1.3 Rock Mass Strengths
Summarised estimated rock strengths following the Hoek and Brown Criterion and
Geological Strength Index rock mass classifications, are presented in Table 16.3.
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Table 16.3: Rock Strengths
Rock Type
Strength
mi
Low
Typical
High
Low
Typical
High
Low
Typical
High
Low
Typical
High
Low
Typical
High
Low
Typical
High
20
20
20
25
25
25
20
20
20
12
12
12
20
20
20
25
25
25
Biotite leptite (Zn
footwall)
Zinc ore
Leptite
and/or
Skarn-leptite (Zn
hangingwall)
Limestone/Marble
(Cu footwall)
Copper Ore
Quartz-feldspar
leptite
(Cu
hangingwall)
σc
(MPa)
100
175
275
225
225
225
100
175
250
100
100
100
165
165
165
300
300
300
GSI
50
55
60
60
65
79
35
55
65
60
65
79
55
60
79
70
75
82
c
(MPa)
5.3
6.8
8.8
8.5
9.3
12.8
4.2
6.8
9.4
5.4
5.9
8.1
6.7
7.3
10.8
11.7
13.3
16.6
φ
(°)
38.4
44.6
49.6
49.9
51.2
54.6
33.8
44.6
50.2
37.0
38.4
42.2
44.1
45.5
50.6
54.6
55.7
57.1
σtm
(MPa)
0.1
0.3
0.7
0.4
0.6
1.8
0.04
0.3
0.9
0.4
0.6
1.7
0.3
0.4
1.7
1.3
1.8
3.1
mi = m-value for intact rock (in the Hoek-Brown failure criterion)
σc = uniaxial compressive strength of intact rock
GSI = Geological Strength Index
c = cohesion of the rock mass (Mohr-Coulomb failure criterion)
φ = friction angle of the rock mass (Mohr-Coulomb failure criterion)
σtm = uniaxial tensile strength of the rock mass
16.2
Hydrological
Zinkgruvan Mine is an extremely dry operation with no substantial water inflow to the
underground workings.
16.3
Mining Method
Three stoping methods are utilised at Zinkgruvan Mine, transverse bench and fill, double
sub level mining (double bench mining) and a modified Avoca mining method.
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16.3.1 Transverse Bench and Fill (Panel Mining)
In the Burkland deposit, long hole transverse bench and fill stoping (locally known as panel
mining) is used with a sequence of primary and secondary stopes. Stope dimensions are
38m high by 20m wide for the primary stopes and 25m wide for the secondary stopes. Stope
access is typically developed in the footwall from the ramp system with this development at
5m x 5m size. Stope accesses are developed on the upper horizon for drilling and on the
lower level for mucking with remote control LHDs. The panel stoping mining method and
sequence are shown in Figure 16.2.
Figure 16.2: Transverse Bench and Fill (Panel Mining)
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On completion of mining, the stopes are backfilled with paste fill with 4% cement content
for the primaries and a lower strength 2% cement content for the secondary stopes. The
paste plant can deliver 120t/hr of paste fill to a stope. Where possible, waste rock is
disposed in secondary stopes rather than being hoisted to surface.
Sill pillars at the 965m, 800m, 650m, and 450m levels have been left to separate mining
areas and provide ground support between active mining areas and previously mined and
backfilled areas.
16.3.2 Double Sub-Level Mining (Double Bench)
In the Nygruvan deposit, long hole transverse bench and fill stoping is also used with a
sequence of primary and secondary stopes. In selected areas, double benching is practiced
where two sub levels are mined at the same time. Previously rib pillars left between stopes
for ground support have become unnecessary and stoping is carried out with 15m sublevels
and stope lengths of 30m.
Ore from Burkland and Nygruvan is fed through an ore pass system to the 800 and 900
levels respectively, where it is transported by truck to the crusher at the P2 shaft. Ore from
levels below 800 is loaded directly in to trucks for ramp haulage to the crusher.
16.3.3 Modified Avoca Mining
In Cecilia where the orebody is thinner a modified Avoca Mining method is utilised where
rock fill is placed in the stope against the retreating blasting face, Figure 16.3. Following
blasting the stope is mucked with constant monitoring to avoid excessive dilution.
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Figure 16.3: Modified Avoca Mining
16.3.4 Future Deep Extraction
Zinkgruvan Mine are presently evaluating extracting the lower levels of Nygruvan and
Burkland by a top down mining sequence rather than the existing bottom up sequence of
extraction. This will reduce the amount of up front development required before extraction
can be undertaken, but will require working below cement filled stopes.
16.4
Production Schedule
The Mine is currently targeting future production levels of 1.15Mtpa lead-zinc ore, 0.3Mtpa
copper and the requisite waste. The next ten years planned production is presented in Table
16.4 and the location of the next five year production is presented as long sections of the
three main stoping areas in Figure 16.4, Figure 16.5 and Figure 16.6.
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Table 16.4: Next Ten Years Planned Production from the LOM Plan
Total Zn Ore
Production (tonnes)
Zn Grade %
Pb Grade%
Ag Grade g/t
Total Cu Ore
Production (tonnes)
Cu Grade %
Ag Grade g/t
Total Waste
Development (tonnes)
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
1,050,115
1,110,007
1,160,286
1,165,828
1,169,711
1,207,006
1,042,474
959,478
871,745
703,009
8.2
4.3
81.1
8.7
4.2
86.5
8.8
3.6
75.9
9.5
4.0
89.8
9.7
3.9
84.4
8.4
3.7
80.4
8.5
3.5
76.0
9.5
3.3
77.5
10.3
3.9
84.4
19.6
3.5
69.1
186,000
143,799
293,973
312,386
333,528
333,998
327,906
338,619
293,039
271,778
2.4
20
2.3
20.6
2.0
24.0
2.0
25.1
2.1
27.4
1.8
22.5
2.2
22.6
2.2
24.6
1.9
25.7
1.8
27.7
218,276
223,817
251,255
244,542
238,775
202,740
162,499
77,786
47,461
49,244
Figure 16.4: Cecilia Planned Production 2013-2017
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Figure 16.5: Burkland Planned Production 2013-2017
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Figure 16.6: Nygruvan Planned Production 2013-2017
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Sweden
16.4.1 Ventilation
Zinkgruvan Mine effectively comprises two ventilation district; Knalla and Nygruvan. The
ventilation networks are modelled in Mine Ventilation Service Inc. VnetPC software. Refer
Figure 16.7 and Figure 16.8.
Figure 16.7: Zinkgruvan Knalla Section Ventilation Network
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Sweden
Figure 16.8: Zinkgruvan Nygruvan Section Ventilation Network
Thorax shafts have a heat exchange installed; Kristena and P1 have oil fired air heaters.
16.5
Equipment
The underground mining equipment operated at Zinkgruvan Mine includes the following
items (see Table 16.5).
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Table 16.5: Underground Equipment List
Designation
Rockbolter
Cablebolter
Charging Vehicle
Charging Vehicle
Charging Vehicle
Cherry Picker
Cherry Picker
Cherry Picker
Drilling Unit
Drilling Unit
Dump Truck
Excavator
Excavator
Excavator
Excavator
Forklift
Forklift
Forklift
Forklift
Loader
Loader
Loader
Loader
Loader
Misc. Vehicles
Personel Vehicles
Scaler
Dewatering vehicle
ZT61-0996/MM775
January 2013
Manufacturer
Atlas Copco
Atlas Copco
Bolidens mekaniska verkstad
Dyno Nobel
GIA
Carl Ström
GIA
Volvo
Atlas Copco
Contecktor
Volvo
Caterpillar
Larssons maskiner Be
Mini maskiner
Volvo
Jungheinrich
Lundberg Hymas Skell
Servicebyn AB
Valmet
Atlas Copco
Cat
Caterpillar
Sandvik
Volvo
Various
Nissan/Ford/Chevrolet/Renault/VW
JAMA
Volvo
Final V3.0
Number
6
1
1
1
2
3
11
2
13
1
14
3
1
1
1
1
1
1
1
1
4
4
4
8
9
59
5
1
Page 103
LUNDIN MINING
Sweden
17
RECOVERY METHODS
17.1
Introduction
The existing Zinkgruvan Lead-Zinc Plant commenced production in 1977 and uses the
conventional processing technologies of crushing, milling, flotation and concentrate
dewatering to produce lead and zinc concentrates. The plant also produces paste for
underground backfill.
In June 2010, the Copper Circuit was commissioned to produce copper concentrate using a
separate grinding, flotation and dewatering circuit. The throughput of the copper circuit is
designed at 300ktpa and although throughputs at this rate have been achieved over short
periods, full processing of 300ktpa is not planned until 2015. During periods when the mine
does not produce 300ktpa of copper ore, the copper grinding circuit is able to mill zinc-lead
ores.
Both the zinc and the copper ores are relatively easy to process and have resulted in good
metallurgical performances. The copper ore responds favourably to beneficiation with
recoveries of 90.7% being obtained since the circuit was commissioned, while lead and zinc
recoveries are typically 86% and 92% respectively. The zinc throughputs continue to
increase with a record 118.3kt being milled in December 2011.
The lead-zinc, copper ore and some waste rock are hoisted to surface and are fed through a
common screening and crushing plant. As part of process and environmental improvements,
Zinkgruvan plan to remove the crushing circuit, processing run-of-mine ore with Fully
Autogeneous Grinding (FAG) technology in 2015. This will involve treating the copper ore
through the existing zinc AG mill circuit while grinding the zinc ore through a new higher
capacity FAG mill circuit. Preliminary estimates have shown the cost of the project to be
US$51M.
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17.2
Flowsheet Description
17.2.1 Crushing Circuit
In 2009, Metso Minerals installed the crushing plant with the objective of increasing the
throughput of the Autogenous Grinding (AG) mill. The circuit was later adapted in 2010 so
that copper ore could be crushed on a campaign basis and stockpiled separately from the
zinc ore.
A simplified flowsheet for the crushing circuit is shown in
Figure 17.1.
Hoist
(Shaft P2)
+90mm
Grizzly
(Vibrational)
Coase Ore
Stockpile (Pb-Zn)
-15mm
Double Deck
Screen
Transfer
Station
Fine Ore
Stockpile (Pb-Zn)
-90mm, +15mm
Cone Crusher
(GP3005)
Double Deck
Screen
-15mm
+15mm
Cone Crusher
(HP4)
Fine Ore
Stockpile (Cu)
Waste
Copper ore
Lead-zinc
Figure 17.1: Simplified Flowsheet for the Crushing Circuit
Three material types are brought to surface in campaigns via the mine hoist. These include
zinc ore, copper ore and waste rock. Once treated through the crushing plant, four products
are produced:

Copper ore, -15mm;

Zinc ore, -15mm;

Zinc ore, -250mm, +90mm; and
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
Waste, -250mm.
Primary crushed ore (crushed underground to minus 250mm) is conveyed from the P2 shaft
to a double-deck screen fitted with 100mm and 15mm screen decks. Material <100mm can
be sent either of two ways, depending on the material hoisted.
Copper ore and waste material are conveyed to a transfer station where they are either sent
to a waste stockpile or to the copper crusher circuit. Copper ore is fed to a Metso GP3005
cone crusher. The cone crusher product reports to a double deck screen from where the
+15mm fraction reports to a Metso HP4 cone crusher. The crushed product returns to the
secondary double deck screen. The minus 15mm fraction from the screen is conveyed to the
copper fines (-15mm) stockpile.
Zinc ore is transferred to a double deck screen where material >90mm is conveyed to a
coarse ore stockpile located inside the stockpile shed. Ore from the coarse ore stockpile is
reclaimed by vibrating feeders for mill feed. Similarly, ore screened to minus 15mm is
conveyed to the zinc stockpile located in the stockpile shed.
Zinc ore screened to a size fraction of -90 +15mm is conveyed to a double deck screen
where the coarse fractions report to a Metso HP4 cone crusher. The product from the cone
crusher reports back to the screen while the screen undersize (- 15mm) is conveyed to
either of two fine ore stockpiles (one located outside and the other located inside the
Stockpile Shed). Ore from the outside fine ore stockpile can be sent to the stockpile shed.
Finely crushed zinc ore from the stockpile shed is reclaimed by vibrational feeders as mill
feed.
The throughput of the crusher plant has been lower than anticipated due to various design
flaws. These include; poor material handling (exacerbated during winter months), the design
makes maintenance more difficult and there is no surge capacity between the hoist and the
crusher circuit. In addition to production related issues, noise and dust created by the
crusher circuit has caused minor environmental issues, affecting near-by residences. To
maintain throughput objectives, Zinkgruvan has been using contractor pre-crushing
equipment; however this has further complicated noise and dust issues. Zinkgruvan plan to
significantly reduce contracted crushing from 2012 onwards, which will see the amount of
ore crushed by this route reduce from 190ktpa (forecast for 2012) to 20ktpa in 2013.
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In order to resolves these issues, Zinkgruvan selected two preferred options from work done
by Jacobs Engineering and others, these were:

Option 1 (Base Case): Improvement of the existing crushing facility,
upgrading equipment and eliminating bottlenecks where possible. The design
would improve environmental, safety and maintainability issues; and

Option 2: Replacement of the existing crushing and screening circuits by
introducing autogeneous grinding of copper ore and installing a new higher
capacity AG mill for the zinc ore.
After reviewing the various options, Zinkgruvan have selected Option 2 as the preferred
option, as it was shown to deliver the most acceptable outcomes in solving the current
issues. Option 2 also allows for the potential to expand the lead-zinc Plant to 1.5Mtpa in
future years. Zinkgruvan now plan to select a consultant to undertake a feasibility study with
the aim of commissioning of the circuit in Q1 2015.
In the interim, Zinkgruvan have been actively remedying some of the issues surrounding the
crushing plant. This has included the initial construction of a 10m high berm around the
crushing circuit to limit noise and placing external cladding around some of the key areas of
the crushing circuit that are high emitters of noise and dust.
17.2.2 Lead and Zinc Circuit
17.2.2.1 Introduction
The lead-zinc flowsheet uses conventional technologies including AG milling, flotation,
thickening and filtration. The flowsheet is summarised in Figure 17.2.
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ROM Ore
Stockpiles
AG
Mill
Rougher
Float
Rougher-Scavenger Tails
Float
Conc.
Tailings
thickener
Tailings
Facility
Conc.
Bulk Cleaner
Float
Tails
Regrind
Mill
Paste
Plant
Conc.
Tertiary
Mill
Lead - Zinc
Seperation
Zn Product
(tails)
Zinc conc.
dewatering
Zinc Conc.
Stockpile
Lead conc.
dewatering
Lead Conc.
Stockpile
Pb Conc.
Lead Cleaner
Float
Conc.
Figure 17.2: Simplified Flowsheet for the Lead-Zinc Circuit
17.2.2.2 Autogenous Grinding (AG)
The feed to the mill consists of approximately 30% lump ore (+90mm) and 70% finely
crushed ore (-15mm). The ore is ground in a single Morgardshammar CHRK 6580 AG mill to
80% passing 130μm. The mill is 6.5m in diameter, 8.0m long and powered by two variable
speed 1,600kW motors. The mill product is classified by a bank of Krebs 500mm cyclones
with the underflows returning to the mill and the overflows passing to the bulk lead-zinc
flotation circuit.
17.2.2.3 Flotation
The Zinkgruvan flotation circuit is unusual, as it involves the bulk flotation of lead and zinc
minerals. The bulk concentrate is then subjected to a separation stage where zinc minerals
are depressed and lead minerals floated.
The cyclone overflow is conditioned with sulphuric acid to reduce the pH to 8 with sodium
isopropyl xanthate (SIPX) used as the collector. The pulp is pumped to two 38m3 OK rougher
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flotation machines and the concentrate from these cells passes to the lead-zinc bulk
cleaning stage. The tailings pass to six 40m3 Metso cells and the tailings from these cells are
the final plant tailings. The concentrates from the first four cells pass to the Pb-Zn bulk
cleaning stage and the concentrates from cells five to eight are pumped to a regrind mill.
The reground product is pumped back to the head of the rougher circuit.
The bulk lead-zinc concentrate is reground to 80% passing 44µm and the zinc minerals are
depressed by the addition of sodium metabisulphite. The separation is achieved in three
stages consisting of 6 x 15m3 and 4 x 15m3 Metso cells and a third, locally constructed, JELE
flotation cell.
The flotation plant is monitored using a Courier 30 on-stream analyser.
17.2.2.4 Dewatering
The lead concentrate passes to a Sala 7m diameter thickener and the zinc concentrate is
dewatered in a 15m diameter Sala thickener.
The lead concentrate is filtered using a Svedala VPA pressure filter and the zinc concentrate
is filtered using a VPA 15 pressure filter.
17.2.2.5 Paste Fill
The processing plant staff are responsible for operating a conventional paste backfill plant
which consists of a Baker Hughes 10.5m thickener, a Dorr Oliver disc filter (11 x 3.25m discs)
and mixer tanks. Cement is added at a rate of 2% for secondary stopes and 4% for primary
stopes. The paste is pumped underground at 78% solids. Paste production in 2011 was
154,367m3, which is significantly less than in 2006, when some 271,664m3 were backfilled.
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17.2.3 Copper Circuit
17.2.3.1 Introduction
The copper circuit is a relatively new addition to the facility and was commissioned in June
2010. The circuit has a design capacity of 300ktpa and uses conventional crushing, grinding
and flotation technologies, as shown in Figure 17.3.
Copper Ore
Stockpile
Ball
Mill
Rougher
Flotation
Conc.
Tails
Three Stage
Tails
Cleaner Flotation
Conc.
Concentrate
Thickener
Rougher Scavenger
Flotation
Conc.
To Tailings
Facility
Regrind
Mill
Concentrate
Filter
Concentrate
Stockpile
Figure 17.3: Simplified Flowsheet for the Copper Circuit.
17.2.3.2 Grinding
Crushed ore (-15mm) is conveyed to a single 3.3m diameter, 6.6m long ball mill fitted with a
1,250kW motor. The mill has an adjustable speed drive. The ball mill is operated in closed
circuit with a cluster of three “gMax” 381mm (15 inch) diameter cyclones with the target
product grind size of some 80% passing 80µm.
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17.2.3.3 Flotation
Flotation takes place in eight 15m 3 Metso flotation cells. The rougher concentrates (first
four cells) are cleaned three times to produce a final copper concentrate assaying 25% Cu
with 92% recovery. The cleaner tailings and scavenger concentrate are re-ground in a 1.8m
diameter, 3.6m long ball mill fitted with a 132kW motor.
17.2.3.4 Dewatering
The copper concentrate is dewatered using a 10m diameter Sala unit. The thickened
concentrate is filtered using a Metso VPA pressure filter.
17.3
Production Data
17.3.1 Lead and Zinc Circuit
The production throughput records for the concentrator since 1985 are summarised in
Figure 17.4 below.
Figure 17.4: Zinkgruvan Pb-Zn Mill Feed Data (2012: September YTD)
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Throughput has remained relatively consistent from 1985 to 1995, averaging some 670ktpa.
After 1995, the throughput steadily began to increase reaching 787ktpa in 2006. The
throughput significantly increased from 2006, reaching 1,018ktpa in 2011. In 2012 (up until
September), some 844kt of lead-zinc ore has been processed.
Lead head grades have ranged from 1.59% to 4.56% Pb and have been higher in recent
years since the treatment of Burkland Ore. Zinc head grades have ranged from 7.2% to
11.2% Zn and have been highly variable since 2000.
The plant recoveries of lead and zinc are given in Figure 17.5 below.
Figure 17.5: Zinkgruvan Pb-Zn Circuit Recoveries (2012: September YTD)
Between 1985 and 2011, lead recoveries have ranged from 83% to 85.4%. In 2005, the lead
recovery peaked at 89.5% after which it has fallen slightly. For 2012, year-to-date lead
production records show an improvement with a recovery of 85.4% being obtained.
Zinc recoveries have remained relatively consistent, ranging from 95.3% (1985) to 91.5%
(2011). At the beginning of the decade the recoveries fell to 86.4% but thereafter they
increased and have since remained above 90%.
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The grades of lead and zinc concentrates produced are shown in Figure 17.6 below.
Figure 17.6: Zinkgruvan Lead and Zinc Concentrate Grades
(2012: September YTD)
Between 1985 and 2011, the lead concentrate grades have ranged from 62.7% to 75% Pb.
Recent years have seen the concentrate grade increase to 76.7% Pb which is an
exceptionally high grade concentrate. Silver grades in the lead concentrate are typically in
the range 1,100 to 1,500g/t Ag.
Zinc concentrate grades have remained consistent since 1985 to 2011 with grades averaging
54.8% Zn. Zinc concentrate grades have decreased slightly in recent years from 56.7% Zn
(1998) to 52.6% Zn (2011). However, year-to-date records for 2012 show an increase in the
concentrate grade with 54% Zn being obtained.
17.3.2 Copper Circuit
The copper circuit was commissioned in June 2010. The production throughput records for
the concentrator since commissioning are summarised in Figure 17.7 below.
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Figure 17.7: Zinkgruvan Copper Mill Feed Data (2012: September YTD)
During commissioning in 2010, the throughput of the copper circuit was 27.2kt, averaging
some 33tph. The throughput significantly increased to 109.6kt in 2011, as the circuit ran for
a period of eleven months; however the feed rate was below the design rate at 35tph. In
2012 (YTD), the copper circuit has processed some 115.9kt of copper ore at a processing
rate of 43tph.
The copper head grade fell from 2.2% Cu in 2010 to 1.78% Cu in 2011; however the 2012
year-to-date records show the copper head grade is now at 2.25% Cu.
The plant copper recovery and concentrate grade are given in Figure 17.8 below.
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Figure 17.8: Zinkgruvan Copper Recovery and Concentrate Grade
(2012: September YTD)
The copper recovery has remained relatively unaltered since the circuit was commissioned
in 2010. The copper recovery for 2012 (up until September) is 91.63%.
The copper concentrate grade has also remained relatively steady, with a grade of 25.26%
Cu being obtained for 2012 (up until September). The concentrates generated for 2012 have
on average contained 1,036g/t As, 1.05% Pb and 5.92% Zn and 193g/t Ag. The copper
concentrate incurs penalty charges due to the presence of lead and zinc although these are
offset by the credits received for silver.
17.4
Plant Consumables
The consumables for the copper and lead-zinc circuits are summarised in Table 17.1.
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Table 17.1: Plant Consumables (2011)
Item
Steel Media
Xanthate
Dow Frother
Flocculant
Cement
Sodium Hydroxide
Sulphuric acid
Sodium Bisulphite
Electricity
Units
g/t
g/t
g/t
g/t
g/t
g/t
g/t
g/t
kWh/t
Consumption
48
54
89
93
8,751
106
629
2,129
34.6
Power costs in recent years have been highly variable. Electricity is currently bought on the
spot market and the budgeted figure for 2012 was €0.10/kWhr.
The plant consumables are typical for the treatment of a moderately soft copper and leadzinc ore.
17.5
Mill Labour
The Mill Manager is responsible for both the copper and zinc circuits including the paste
backfill plant. The concentrator is operated with five shift crews for a total complement of
60 personnel. Day crews carry out routine tasks such as reagent mixing, ball loading, general
clean-up etc. The plant is scheduled to operate 24 hours per day, seven days per week. The
manning levels are summarised in Table 17.2.
Table 17.2: Mill Labour (2011)
Personnel
Mill Manager
Supervisor
Metallurgy
Production
Maintenance
Electrical
Laboratory
Total
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1
25
14
8
4
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17.6
Assay Laboratory
The assay laboratory only undertakes analysis of samples generated from the processing
plant. Geological samples are prepared at the facility and are sent to an external laboratory
for analysis.
The assay laboratory receives 15 process samples each day. Pulp samples are filtered, dried
and representatively split (using Jones Riffles) to produce sub-samples (20-30g) for chemical
analysis. The flotation feed and tailings are pulverised prior to undertaking chemical
analysis, as these samples contain relatively coarse material.
Chemical analysis is generally undertaken using two acid digestions:

250mg of pulp is boiled in 10ml of HNO3 with the sublimate being redissolved in HCL. The sample is then diluted in H2O and analysed for Zn, Pb,
Ag, Cu, and Fe by AAS; and

500mg of pulp is boiled in 15ml of aqua regia, the solution is then reduced
before being dissolved in H2O to analyse for Co and Ni by AAS.
Following acid digestion, the samples are analysed using Atomic Absorption Spectroscopy
(AAS). Blanks, duplicates and in-house standards are routinely applied during analysis.
However, the laboratory does not send samples to external laboratories for systematic
verification (Round Robin). The laboratory is not accredited and QA/QC procedures could
not be obtained during the site visit.
WAI recommends that the laboratory obtains accreditation and that samples are routinely
sent to external laboratories as part of a quality assurance programme, although it is noted
that no samples used in the Mineral Resource estimate are assayed in this laboratory.
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18
PROJECT INFRASTRUCTURE
The Zinkgruvan mine is located in the south-central Sweden, 175km west-southwest of
Stockholm. The mine site is some 15km from the town of Askersund and comprises a deep
underground mine, a processing plant and associated infrastructure and tailings disposal
facilities. Concentrates are trucked from the mine to a nearby inland port from where they
are shipped via canal and sea to European smelter customers.
The nearest airport is in Örebro with flights to Copenhagen and other centres. Örebro also
hosts a university and considerable light and heavy industry. As with virtually all of southern
Sweden there is an extensive network of paved highways, rail service, excellent
telecommunications facilities, national grid electricity, an ample supply of water and a highly
educated work force.
The mine is well served by roads. Currently all ore is transported by road approximately
100km to the inland port of Otterbäcken where it is loaded on to sea going ships for
transport to smelters.
Electricity is obtained from the National Grid. It is understood that the majority of electricity
generation in the area is via hydro-electric schemes, although recently a number of wind
turbines have been installed adjacent to the mine. The mine site is well served by
telecommunications with excellent mobile phone coverage.
Annual energy consumption at the mine is recorded at 104GWh (both electric and fossil fuel
energy). Sweco Environment AS has investigated potential energy savings at the mine and
the mine has an Energy Reduction Plan (2011) comprising 11 separate topics, 9 of which will
be fully implemented within the next 2-3 years. US$1.7M investment in this area should
result in the saving of 2,250t CO2/year. One of the areas with the biggest potential to save
energy is the optimisation of the mine ventilation which, on its own, has the potential to
save 2,250MWh.
50% of the water sent to the tailings management facility (TMF) is returned to the
processing plant. Water removed from the underground workings, together with all site
drainage water is sent to the TMF with the tailings/process water. Total mine dewatering
produces around 600,000m3/y water.
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The mine is able to extract water from Åmmeberg (Lake Vattern) for use in the process.
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19
MARKET STUDIES AND CONTRACTS
Storage capacity at the mine is around 4,000wmt for zinc concentrates, 2,000wmt for lead
concentrates and 1,500wmt for copper concentrates (Photo 19.1). The concentrates are
weighed as the trucks leave the warehouse at the mill on their way to the port of
Otterbäcken. The concentrates are trucked for five days per week with three turnarounds
per truck per day (12 hours shifts/24 hours per day).
Photo 19.1: Concentrate Warehouse and Weighbridge at Zinkgruvan
At Otterbäcken the concentrates are stored in a warehouse owned by the port operator
Vänerhamn and rented to Zinkgruvan (Photo 19.2). Vänerhamn also owns the terminal at
the port and have given the right to use the same to Zinkgruvan. The terminal is fully ISPS
compliant.
The storage capacity at Otterbäcken is around 30,000wmt, divided into four storage bins
with the respective capacity of 10,000wmt for zinc concentrates, 8,000wmt for lead
concentrates, 8,000wmt for copper concentrates and 4,000wmt used for storage of a small
quantity of mixed concentrates coming from the cleaning of the port and warehouse after
loading and which are trucked back to Zinkgruvan for reprocessing.
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Photo 19.2: Port of Otterbäcken Warehouse
Stevedoring is performed by Vänerhamn under contract. Loading is performed by two front
end loaders transporting the concentrates from the warehouse to the quay where a mobile
crane is used for loading the vessel. The load rate is approximately 500wmt/h.
The concentrates are shipped from Otterbäcken by bulk vessels. Since Otterbäcken is
located on the lake Vänern and the vessels have to pass locks and a canal to reach the ocean
there are only a few ship owners having suitable (shallow and narrow) vessels. Zinkgruvan is
using Thun, a Swedish ship-owner, with whom they have a long term contract of
affreightment.
Photo 19.3: Vessel Loading in Otterbäcken
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Official weighing and sampling is normally done at the discharge port under the supervision
of an internationally recognized company.
All concentrates, zinc, lead and copper, are predominantly sold under long term contracts
directly to mainly European smelters. However, some 10%-15% of the zinc concentrate
production is sold to trading companies on a spot basis by tenders. The quality of all
concentrates is high with few penalty elements and there are no issues in selling the
products. The commercial terms under the long term contracts are negotiated on an annual
basis and the concentrates are sold at the respective benchmark for zinc, lead and copper
concentrates or better.
All silver contained in the concentrates belongs to Silver Wheaton under a silver streaming
agreement and is invoiced separately when the silver content reaches payable levels.
No major changes in the commercial terms other than treatment and refining charges which
follows the market are expected for the coming years.
Credit risks are managed under a strict credit management programme which was
implemented in 2011 and which monitors the clients’ payment performance as well as
restricts the credit exposure.
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20
ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT
20.1
Environment, Social Setting and Context
Zinkgruvan is a zinc-lead-silver mine located near Åmmeberg in Askersund Municipality,
Örebro County, in the Province of Närke, Sweden, approximately 250km west of the
Swedish capital, Stockholm. The ore deposits are located just to the east of northern Lake
Vättern. There is a long history of mining in this area with iron ore and silver being exploited
from the 14th century. Mining at Zinkgruvan has been continuous since the Belgian Company
Société des Mines et Fondries de Zinc de la Vieille Montagne (Vieille-Montagne) opened the
current mine. Zinkgruvan was part of Vieille-Montagne for 138 years. In 1995, the mine was
sold to the Australian mining company North Ltd, who in turn was taken over by Rio Tinto in
2001. In 2004, the Swedish-Canadian exploration company, South Atlantic Ventures Ltd
acquired Zinkgruvan and in the same year was renamed Lundin Mining Corporation.
20.1.1 Surface Waters
The Zinkgruvan mine is located close to northern Lake Vättern in an area with numerous,
natural small lakes and streams/rivers all of which flow/discharge to the Lake Vättern. Of
particular significance are the surface water bodies of the Enemossen TMF, an area of
former boggy terrain, that now forms the principal tailings disposal facility for the mine, a
small natural lake, named Hemsjön, situated immediately to the south of the current TMF
and a Clarification Pond (Klarningssjö), artificially created by pumping return water from the
TMF to a holding lake to settle any solids prior to pumping water back to the plant for use in
the process. Water in the clearing pond has an average residence time of around 7 days.
Hemsjön is currently under consideration as a potential TMF location for the tailings
disposal area required once the Enemossen TMF is full in 2017.
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Photo 20.1: Clearing Lake – Klaringssjö – Used to Clarify Water
Before Return to the Process Plant from the TMF
20.1.2 Groundwater
The underground works are dewatered and water pumped to the surface at the rate of
600,000m3/y. All water pumped from the mine workings is used in processing.
A comprehensive groundwater modelling exercise has been undertaken by local consultants
and is included with the recent EIA prepared to support the licence changes required in
2017 when a new TMF will be required. WAI understands that apart from use of
groundwater abstracted from the mine working (recovered via the TMF) there are no
additional users of groundwater in the immediate vicinity of the mine.
20.1.3 Water Supply
50% of the water sent to the TMF is returned to the processing plant. Water removed from
the underground workings, together with all site drainage water is sent to the TMF with the
tailings/process water. Total mine dewatering produces around 600,000m3/y water.
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The mine is able to abstract water from Åmmeberg (Lake Vattern) for use in the process.
The current permit allows pumping of up to 110l/s but it is understood that currently 35l/s
water is abstracted. Water is pumped via a pipeline running along the track bed of the
disused railway that took ore from the mine to the former processing plant at Åmmeberg,
situated on a bay in Lake Vättern. The water is pumped to a freshwater lake situated
immediately adjacent to the mine site approximately 10km from where it is extracted, for
use in the process.
20.1.4 Communities and Livelihoods
There has been a history of mining at Zinkgruvan dating back over 150 years. Indeed, the
current township owes its existence to mining.
Forestry and agriculture complement mining as a main source of income in the area.
20.1.5 Infrastructure and Communications
The mine produces a regular local newsletter for the local community and 3-4 times a year a
magazine that is freely available in the community.
20.2
Project Status, Activities, Effects, Releases and Controls
20.2.1 Past Activities
Until the 1970’s ore was processed in Åmmeberg on the shores of Lake Vättern. Ore used to
be roasted and for over 120 years >3Mm3 of tailings were deposited in the Lake. The
buildings that contained the former processing facilities have been restored and are now
primarily used for light industry. Some buildings, such as the former locomotive shed have
been preserved as a museum.
The former TMF has been restored for use as a golf course and marina/holiday village. The
present mining company retains certain residual liabilities associated with the former TMF
and processing facilities.
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20.2.2 Current Operations
Current operations at Zinkgruvan comprise the underground mining of sulphidic zinc, lead
and copper ores, autogenous grinding, production of concentrates by flotation for sale and
disposal of tailings at a purpose engineered TMF at Enemossen. Some tailings are thickened
to paste, mixed with cement and used to backfill active mine stopes.
The current environmental/operating licence for the exploitation of up to 1.5Mtpa ore
expires on 1 December 2017 from when the site will need a replacement licence. A new
licence application, for the exploitation of up to 1.5Mtpa ore was submitted in late summer
2012. As part of this application, Lundin Mining Corporation submitted an EIA for a future
expansion of mining and, as the existing TMF would be full in the next 6-7 years, details
were provided regarding a preferred replacement tailings disposal area in Lake Hemsjön.
AMEC performed a compliance check on the projects permitting package and Environmental
Impact Assessment against Swedish Regulations, EU regulations and the International
Finance Corporation (IFC) Standards (as amended in January 2012).
Photo 20.2: Tailings Disposal at Enemossen TMF
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20.2.3 Proposed Operations
Although the existing permit allows for the extraction of up to 1.5Mtpa ore, the future mine
operation will consistently extract higher tonnages of ore than achieved previously and the
recovery of copper will be integral to the processing.
The principal difference from an environmental perspective is probably the recommended
use of Hemsjön as a replacement TMF from 2017 onwards. Hemsjön is a natural lake up to
14m deep, although 4-5m depth is more typical. The company has calculated that this will
have a 17-18 years storage capacity for tailings produced at an annual rate of 400,000 –
500,000m3. The mine has produced capital estimates totalling US$12.74M between 2013
and 2017 to create the new TMF with an accuracy of + 25%. WAI considers that this figure is
realistic, but notes that these costs reflect development of a TMF at Hemsjön. Several other
alternative locations for the future tailings storage have been assessed and if one of these
were ultimately approved through the permitting process, the capital costs for these other
options could vary from the base case.
AMEC concluded that there were no non-compliance issues concerning Swedish Regulations
or EU Regulations and BAT. The documentation was found to be largely compliant with IFC
requirements with the following exceptions:

Discharge from the TMF has on occasion exceeded the IFC zinc limit of
0.5mg/l;

An additional section in the EIA was recommended to consider cumulative
impacts from the project;

A specific section describing community health and safety effects was
recommended so that it could be demonstrated clearly that relevant IFC
performance standards were being complied with; and

A Resettlement Action Plan and potentially a formal Livelihood Restoration
Plan should be considered.
WAI concurs largely with the findings of the AMEC Review. It is noted that, although
Hemsjon is the preferred option for the new TMF, Lundin Mining has considered a number
of alternative locations should tailings disposal at the preferred site not be possible.
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There are studies underway to replace the front end crushing and grinding circuits and to
fully convert the existing zinc circuit to handle copper and build a new line for zinc.
Investment estimated at US$51M is required to achieve these plans. In addition to
metallurgical considerations these changes will result in environmental (dust and noise
reduction are expected) as well as health and safety improvements.
Photo 20.3: Pollution Control Sump at Zinkgruvan Mine to Collect Site Drainage Waters
WAI notes that the level of zinc in water associated with the tailings is relatively high (i.e.
exceeds the 0.5mg/l limit persistently). Zinkgruvan has attempted to implement changes,
especially in the management of surface drainage, that aim to restrict the amount of zinc
entering solution. WAI considers that if these measures do not result in the required
improvements some form of active treatment (such as precipitation) may be required to
comply with the mine’s IPPC licence.
20.3
Mine Waste Rock
Waste rock from the mine is preferably stored uncemented in the secondary stopes
underground. Where waste has to be hoisted to surface, it is either used for tailings dam
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construction or crushed and sold into the local aggregates market. Some waste rock has
been used recently to form an acoustic bund around the crushing area of the site.
20.4
Water Management
All process water and water pumped from underground workings is pumped almost 4km to
the Enemossen TMF.
Site drainage and any arisings from sensitive areas around the site is collected in sumps and
then pumped to one of two emergency storage ponds. These ponds clarify the liquid, allow
solids to settle and the clear water is pumped to the TMF with the tailings. Water
management and a comprehensive site water balance is covered in the recent (August
2012) EIA contained in the new Permit Application.
Apart from the tailings disposal, there are no aqueous effluents discharged from the site.
20.5
Emissions to Air
Permanent dust monitoring around the site has been established since August 2012. A total
of 3 monitoring locations are inside the mine site and one is located outside the boundary of
the site. In general WAI would agree that emissions to air at the site should not be regarded
as significant.
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Photo 20.4: Dust Monitoring Outside Site Boundary
(adjacent to noise bund under construction)
Noise monitoring has demonstrated that during the day, noise levels are not a problem.
However, noise monitoring at the closest residential properties has demonstrated that night
time limits of 45dB(A) can be exceeded. An approximately 10m high bund is being
constructed around the site, adjacent to residential properties in Zinkgruvan. Although not
yet fully complete, this has already reduced night time noise levels at the nearest
properties. WAI considers that when finished the noise bund will ensure compliance with
permitted maximum noise levels.
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Photo 20.5: Construction of Noise Bund
20.6
Waste Management
Excluding mine wastes (waste rocks and tailings) considered elsewhere, the mine produces
relatively small volumes of other categories of waste. All waste is segregated on-site,
collected in separate containers (skips) for off-site disposal. All waste is collected and
disposed of by appropriately licensed waste operators. WAI considers waste to be well
managed at the site.
20.7
Hazardous Materials
The principal varieties of hazardous waste produced at the site are relatively small
quantities of materials such as batteries and relatively low volumes of waste oils.
Waste oils are collected and removed from the site by an appropriately licensed operative.
Solid hazardous wastes (e.g. batteries) are collected and stored in separate containers in the
area used to store other waste streams for off-site disposal.
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WAI considers that the separation, storage and disposal of hazardous materials conforms to
all EU waste directives and is considered best practice.
20.8
Security, Housekeeping and Fire Safety
At the time of the site visit, the standard of housekeeping was exemplary. The mine site is
surrounded by a fence with controlled access.
The TMF is located approximately 4km from the main mine site. The TMF (a clearing pond)
is not fenced and is accessible potentially by members of the public.
The mine has a number of trained fire safety specialists (15 people are trained as fire
officers) and extinguishers are located in the offices/surface buildings. There is a trained fire
officer present as part of each shift. The mine manager is responsible ultimately for fire
safety. In the event of a major incident the fire would be attended by professional fire
fighters from Askersund and/or Mariedam (approximately 10 km away).
20.9
Permitting
Currently the mine is fully permitted and compliant in Swedish regulations. The current
Environmental/Operating Permit expires in December 2017.
20.9.1 ESIA
A formal EIA was prepared by local (Swedish) consultants as part of the application process
for a replacement permit. This EIA has been examined by international consultants and is
considered to satisfy Swedish, European and International EIA requirements.
20.9.2 Environmental Permits and Licences
An application was made in August 2012 for a replacement of the existing permit. To date
(December 2012) no formal feedback has been received.
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20.10 Environmental Management
Lundin Mining does not operate a formally accredited Environmental Management System
such as ISO 14001. However, the mine operates in general accordance with ISO 14001.
There is a designated EHS manager who reports directly to the General Manager.
Environmental performance is reported on a monthly basis to the Main Board.
20.10.1 Environmental Policy and Company Approach
Lundin Mining publish Health, Safety, Environmental and Community policy statements in
all offices. The policy is bilingual (Swedish and English) and signed by Paul Conibear
(President and CEO) and is currently dated August 2011. It is the stated policy that Lundin
Mining “...is committed to achieving a safe, productive and healthy work environment...”
and that business should be carried out in “...a manner designed to protect our employees,
adjacent communities and the natural environment...”
Although not formally accredited to any recognised EMS the company operates to best
practice and standards reflective of best management systems.
It is company policy to have a complete audit, including EHS matters, every 3 years carried
out by independent consultants.
20.10.2 Environmental Management Staff and Resources
The HSE department at the mine comprises 10 people including 2 dedicated, specialist
environmental engineers who are responsible for sampling, and environmental monitoring
around the site.
WAI considers that adequate resources are devoted to environmental (and health and
safety) teams to ensure that they can work effectively. There is a small on-site laboratory.
Currently all environmental samples are analysed off-site. Whilst there are clear benefits in
such a policy (e.g. complete independence) investment in internal environmental analyses
could be useful in allowing additional, routine samples to be examined and assist with early
identification if there are any concerns.
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20.10.3 Systems and Work Procedures
The mine has written Standard Operating Procedures for all work tasks. These are reviewed
regularly and assessed against best practice for EHS matters.
20.10.4 Environmental Monitoring, Compliance and Reporting
The current environmental monitoring and sampling position is provided in Table 20.1. In
addition there is a geotechnical inspection of the dams at the TMF at least once per year.
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NI 43-101 Technical Report for Zinkgruvan Mine, Sweden
Table 20.1: Overview Sampling/Measurement
Parameter
Measuring
Location
Sample/Measurement
Frequency
Conducted by
Documented
by
Conditions/Terms
Water
Clearing lake
Watersample and
waterflow
Once every
month
HN/TK/AT
HMS
Clearing lake
Watersample
Weekly
HN/TK/AT
HMS
Mine Water
Mine water
Spare pond,
industry area
Björnbäcken
Watersample
Watersample
Watersample
Twice per year
Weekly
Twice per year
HN/TK/AT
HN/TK/AT
HN/TK/AT
HSM
HMS
HMS
ZN 0.5mg/l, PH<7.0 Susp
5.0, Pb 75µ/l, Cd 0.5µg/l,
Cu <20 µg/l
ZN 0.5mg/l, PH<7.0 Susp
5.0, Pb 75µ/l, Cd 0.5µg/l,
Cu <20 µg/l
-
Watersample
HN/TK/AT
HMS
-
Åmmeberg,
golfcourse
Åmmelångenlake Trysjön
lake Trysjön –
processing plant
Lake wiksjönSalaån
Clearing lake
Ekershyttebäcken
Clearing lake
Processing plant
Lake
Åmmelången
Watersample
VP/allmänservice
HMS
-
Waterflow
4 times per
year
4 times per
year
Weekly
VP/allmänservice
HMS
Max 110 l/s, yearly average 50 l/s
Waterflow
Weekly
VP/allmänservice
HMS
Max 140 l/s
Waterflow
Weekly
VP/allmänservice
HMS
Sept-Apr 10 l/s, May-August 15 l/s
Waterflow
Weekly
VP/allmänservice
HMS
Max 300 l/s
Waterflow
Weekly
VP/allmänservice
HMS
-
Waterlevel
Weekly
VP/allmänservice
HMS
Dammed: +93.52
Lowering: +92.50
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Table 20.1: Overview Sampling/Measurement (Continued)
Parameter
Noise
Dust
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Location
Sample/Measurement
Frequency
Conducted by
Documented
by
Conditions/Terms
Lake Viksjön-
Waterlevel
Weekly
VP/allmänservice
HMS
Lake Trysjön
Waterlevel
Weekly
VP/allmänservice
HMS
Tailingspond
Waterlevel
Weekly
VP/allmänservice
HMS
Damned: +173.00
Lowering: +172.20
Damned: +167.75
Lowering: +172.15
Damned: freeboard 2m
Tailingspond
Clearing lake
Clearing lake
North Vättern’s
catchment area
Watersample
Waterlevel
Watersample
Water sample, sediment
sample
HN/TK/AT
VP/allmänservice
HN/TK/AT
Medins
HMS
HMS
HMS
Medins
Dammned: +178.00
-
Surrounding
residential area
External noise equivalent
Db(a)
Weekly
Weekly
Weekly
Continuously
throughout
the year
rd
Every 3 year
Independent
consultant
HMS
Industry area
Exhaust 800 m
Internal noise
Dust, airflow,
temperature
Continuously
rd
Every 3 year
?
Independent
consultant
HMS
HMS
Daytime (07-18) 55 dB(A)
Evenings (18-22) 50 dB(A)
Night time (22-07) 45 dB(A)
?
Air from u.g crushing <20mg/m3
Air from crushing a.g.<10mg/m3
Industry area
surroundings
Dust
Once every
month
HN/TK/AT
HMS
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Data inspected by WAI indicates that monitoring confirms general compliance with all limits
established in the current permit and with the mine’s IPPC licence. There are two exceptions
to this statement; firstly the limit of 0.5mg/l for zinc has been exceeded consistently in
water sampling at the clearing lake, and secondly, night time noise levels have occasionally
exceeded the 45db (A) limit at the closest residential properties.
All monitoring results are provided to the Permitting Authorities and summaries of (where
required) results have been included in the recent EIA that formed part of the application
for a new Permit.
WAI considers that the measures taken to reduce noise levels, including the formation of a
noise bund that will ultimately be up to 10m high, should ensure that the 45db (A) limit is
achieved. The mine has initiated a series of improvements to better control surface drainage
and storm water at the site and there is some indication that this is beginning to result in
improved water quality. However, the basic chemistry of zinc is such that the permit limit of
0.5mg/l will be difficult to achieve consistently unless additional treatment methods are
considered.
20.10.5 Emergency Preparedness Response Plan
The mine has a current Emergency Preparedness and Response Plan (Räddningsplan) dating
from February 2012. The plan covers all foreseeable incidents and is updated, at least,
annually. The plan is readily available and contains up to date telephone numbers of the
people designated to co-ordinate the response to different scenarios.
20.10.6 Training
The HSE manager is responsible for training at the mine. Each new employee undergoes a
basic induction in environmental and health and safety. Regular training exercises
(emergency scenarios) are undertaken. Short, basic HSE training was given to site
contractors approximately 18 months ago and although external contractors were not
included in 2012 health and safety training activities, they were included in the more formal
emergency exercises. It is the intention to integrate long-term contractors better into the
training policy on site. All employee training records are up to date and kept in the HR
department.
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20.11 Social and Community Management
As stated previously Lundin Mining has an integrated Health, Safety, Environment and
Community Policy. The company is committed to engage with the local community and
other interested parties in relation to all safety, health and environmental aspects of the
business.
20.11.1 Consultation, Dialogue and Grievance Mechanisms
Meetings are held between the mine and the local community. A public meeting was held
on 14 November 2012 in Zinkgruvan. A regular magazine and newsletter are published by
the mine and are freely available to the community.
The company operates a grievance policy and records all complaints in a formal manner.
Indeed, the initiative to create the noise bund resulted partly from complaints from the
public.
Table 20.2 below records all community concerns and complaints received by the Mine in
2012.
Table 20.2: External Complaints Received at Mine, 2012
Date
1) 27/07
Concern
Vibrations
2) 17/09
Dust from Copper and
Zinc Stockpiles
3) 18/10
Dust from Copper and
Zinc stockpiles
Response
Vibration meter
Installed 27/07
Better
management
and re-organisation of
stock piles
See above
Status
No further complaints
received
Works complete
No recent complaints
Works complete
No recent complaints
WAI considers that the Company’s approach to consultation with the local community and
its grievance mechanism conforms to international best practice.
20.11.2 Social Initiatives and Community Development
The mine supports a number of events in the local community including sponsorship of the
local football team and the local cross-country skiing team. In addition the mine provides
financial support to the local mid-summer party. The 2012 budget for community
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development has been set at US$130k. The mine is to provide specialist training equipment
for local schools, including provision of gymnastic facilities.
20.12 Health and Safety
Lundin Mining is committed to operating Zinkgruvan Mine to the best possible health and
safety standards, as demonstrated in its published Health, Safety, Environment and
Community Policy and believes in continuous improvement in their health and safety
performance.
20.12.1 Health and Safety Management
The mine has a dedicated Health and Safety Manager (HSE Manager) and the HSE
Department includes one fire safety specialist and one safety specialist. A medical station is
present at the Mine and from 2013 a nurse will be present on-site 2 days per week with a
Company Doctor hired in, providing 20hour per month consultation/advice. Regular blood
samples are taken of workers in contact with lead ores.
Lundin Mining actively encourages the reporting of near-misses and this possibly accounts
for the relatively high number of reported “incidents” compared with many other similar
installations. WAI understands that there have been no significantly elevated lead levels in
blood in recent times.
20.12.2 Performance and Accident Records
The number of lost time accidents showed a marked improvement between 1991 and 1996
(from a total of 48 in 1991 to 11 in 1996). However between 1996 and 2009 the statistics
remained relatively constant, although there has been sustained improvement since 2010.
The number of lost time accidents at the site including those to contractors is shown in
Figure 20.1.
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Figure 20.1: Number of Lost Time Accidents (including contractors) 1991 – November 2012
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Central Sweden
The last fatality at the Mine was in 2002 resulting from an accident on a quad bike. This led
to a change in policy, banning the use of quad bikes around the site.
WAI considers that health and safety is well managed and conforms to best international
practice. Concern was expressed that a disproportionate number of the accidents at site
were to contractors and there is new effort to include external contractors in all future
training events. This approach is commended by WAI.
20.13 Mine Closure and Rehabilitation
The current Mine Closure and Rehabilitation Plan was produced by Nils Eriksson in 2009.
The plan was accepted by the Swedish Authorities. The 2009 plan was developed to
conform to the demands of the changes in closure regulation brought in by the Swedish
Authorities in 2008 (SFS 2008: 722). In essence the reclamation plan focuses on reclamation
of the Enemossen TMF. Reclamation of the TMF accounts for US$11.4M, i.e. the majority of
the total costs which had been estimated in 2009 at US$12.6M.
Closure Plans (and associated costs) are, by their nature, documents that need periodic (if
not continuous) updating, with detailed design only undertaken immediately prior to
closure. Lundin Mining recognised this and the 2009 should be regarded as an outline plan.
A detailed plan is only required by the authorities if the site has less than 5 years active life.
This is not the case at Zinkgruvan.
Lundin Mining recognises that it is time to review the current closure plan. The Enemossen
facility will be full by 2017 and on completion of this TMF progressive restoration and
rehabilitation of the Enemossen facility will be carried out. WAI considers that the current
plan remains valid but that it will need updating to reflect recent advances in restoration
techniques and costs will need updating. WAI notes that some long term testing of tailings is
underway at Enemossen. This work is being directed by the local university and will be used
to inform the next closure plan, especially with respect to cover requirements.
WAI is satisfied that the current closure plan adequately covers the main aspects that will be
required on closure and notes that the plan will be updated over the next few years. The
closure of the current TMF in 2017 allows potential for progressive restoration, the results
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of which will be valuable to assist future closure plans for the new TMF as well as the rest of
the site.
WAI notes that there is little deposition of waste rock presently as virtually all is deposited in
secondary stopes underground or used in tailings dam construction. Previous waste rock
arisings have been used in road construction around the site and hence, there are no waste
rock dumps that will require restoration/rehabilitation.
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21
CAPITAL AND OPERATING COSTS
21.1
Mining Costs
The current mine unit operating costs are presented in Table 21.1 below.
Table 21.1: Mining Operating Costs
SEK/t Ore
Surface Operations
Mining Management
Mining Survey
Mining Geology
"Joint" Geology
Process management
Energy
Clearance
Ventilation
Other fixed installations
SubTotal
Underground Operations
Facilities leading / mountain stream
Backfill / mining building
Media
shipments
supplies
Joint staff / other
Joint costs u.j
Shaft / Clearance / Tips / Crushers / Skip
Pumps / fans
SubTotal
Preparation
Total Surveys
Total Preparatory Work-Rock
Total Preparation/Production Ore
Sub Total
Mining Costs
Drilling
Charging
Loading
Rock reinforcement
Bergtansport
Service Vehicles
Staff Transportation
Other Equipment
Sub Total
TOTAL OPERATING COST
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66.20
1.94
3.19
1.47
6.18
25.04
1.93
3.59
3.04
112.57
45.43
4.26
24.05
4.78
67.30
8.65
5.02
6.02
3.60
169.12
10.29
55.06
70.11
135.46
13.80
1.85
7.84
9.79
1.13
2.61
2.34
7.24
46.58
463.73
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21.2
Process Operating Costs
Zinkgruvan AB do not split the operating cost between the copper and lead-zinc circuit, but
instead report an overall operating cost for the entire processing plant. The operating cost
for the plant is summarised in Table 21.2.
Table 21.2: Operating Cost for Processing (2011)
Area
SEK/t
Labour
Electricity
Consumables
Other Services
Maintenance
Total
Tonnage Treated, 000t
28.42
17.94
34.77
43.15
15.51
138.79
1,109
The operating cost for 2011 for the plant was 138.79SEK/t. The operating cost is therefore
US$20.8/t at an exchange rate of US$0.15 per 1SEK.
The process operating cost budget/forecast for 2012 to 2017 is presented in Table 21.3.
Table 21.3: Zinkgruvan Process Opex Plan/Forecast 2012 to 2017
Total Cost, MSEK
Unit Cost, SEK/t
Unit Cost*, US$/t
2012
Actual
114.5
133.1
20.0
2012
Budget
147.4
123
18.5
2013
Forecast
161.8
131
19.7
2014
Forecast
164.5
131
19.7
2015
Forecast
152.2
105
15.8
2016
2017
Forecast Forecast
142.4
146.7
96
98
14.4
14.7
*based on an exchange rate of 0.15US$ per 1SEK.
This budget/forecast includes the zinc plant and copper plant. The operating cost up until
2014 is forecast to be US$19.7/t after which it reduces significantly, falling to US$14.7/t in
2017. The reduction in the plant’s operating cost is due to the commissioning of a new AG
mill in 2015 and increased throughputs.
21.3
Process Capital Costs
A summary of the process sustaining capital expenditures budgeted between 2013 and 2017
is summarised in Table 21.3 below.
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Table 21.4: Summary of Plant Sustaining Capital Plan from 2013 to 2017
Item
Tailings Facility and Pipeline
Plant Upgrades
General/Infrastructure
Total
2013
1781
5450
1,527
8,758
Capital Cost, US$ ‘000
2014 2015 2016 2017
1336 1336 3,562
0
1639
594
297
297
2,829 2,403 2,141 3,273
5,804 4,333 6,000 3,570
Total
8,015
8,277
12,173
28,465
As part of maintaining an effective operating plant, Zinkgruvan have allocated a sustaining
capital budget of US$28.46M between 2013 and 2017. The budget estimate is to an
accuracy of +/- 25% and is based on Zinkgruvan’s in-house experience.
A summary of the new investment budgeted between 2013 and 2017 is summarised in
Table 21.4.
Table 21.4: Summary of Planned New Capital Investments
Item
Mill
New TMF
Increase Filtration Capacity
Total
2013
2014
2015
2016
2017
13,333 31,111 6,222
0
0
148
296
2,963 5,926 3,407
2,370
0
0
0
0
15,852 31,407 9,185 5,926 3,407
Total
50,667
12,741
2,370
65,778
Zinkgruvan have completed a Pre-Feasibility Study to remove the crushing circuit, opting for
Fully Autogeneous Grinding (FAG) for both copper and zinc circuits. Consequently, it is
planned that:

The existing zinc FAG mill will be converted to process copper ore at a rate of
300ktpa; and

A new FAG mill will be purchased for the treatment of the zinc ore at a rate of
1,200ktpa.
The existing configuration of the copper and zinc flotation circuits will remain unaltered. It is
estimated in the pre-feasibility that a capital investment of some US$50.7M is required to
upgrade the mill circuits, remove the crusher circuit and install new ROM handling
equipment. Both the capital cost and payback period will be confirmed by the detailed
Feasibility Study that is currently underway.
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A further US$2.37M has been estimated for the addition of a further filtration unit.
Zinkgruvan have estimated a capital expenditure of US$12.76M for the construction of a
new tailings facility. However it should be noted that no clear decision has been made with
regards to the location of the new tailings facility. The capital estimates are to an accuracy
of +/- 25% and are based on Zinkgruvan’s in-house experience.
21.4
Mining Capital Costs
The mining sustaining capital expenditures budgeted between 2013 and 2017 are
summarised in Table 21.6 below.
Table 21.6: Summary of Mine Sustaining Capital Plan from 2013 to 2017
Item
Horizontal Development
Vertical Development
Mine Other
Infill Core Drilling
Total
2013
16,418
1,978
6,957
2,077
27,430
2014
16,369
1,718
6,656
963
25,706
2015
2016
2017
16,298 15,676 12,723
1,734
407
694
4,553
3,665
2,021
753
753
628
23,339 20,502 16,066
Total
77,484
6,531
23,854
5,174
113,043
Sustaining capital in the mine includes on-going horizontal and vertical development
necessary to achieve the mine schedule, infill diamond drilling, together with mobile and
other equipment replacement programmes. A total of US$113.04M is forecast to be spent
over the next 5 years.
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22
ECONOMIC ANALYSIS
Producing issuers may exclude the information required under Item 22 for technical reports
on properties currently in production unless the technical report includes a material
expansion of current production.
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23
ADJACENT PROPERTIES
The Zinkgruvan property is situated at the southernmost end of the Bergslagen mineralised
belt, which to the north hosts numerous iron ore and base metal deposits many of which
have seen production. At the present time, the only significant other production from the
belt is from the Garpenberg zinc-silver mine, operated by Boliden, which is located 175km
to the north (see Figure 23.1).
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Figure 23.1: Location of Zinkgruvan within the Swedish Mining Districts
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24
OTHER RELEVANT DATA AND INFORMATION
There is no other relevant data or information to report.
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25
INTERPRETATION AND CONCLUSIONS
Zinkgruvan is a mature mining operation with well-established technical parameters in both
the mine and processing plant. The orebody geology and geometry are well understood, and
the mine has a longstanding, successful record of upgrading Mineral Resources and
converting Mineral Resources to Mineral Reserves through systematic underground
development, diamond drilling and mine planning.
The mine operates in a well-established fiscal and legal setting. Environmental issues are
clearly understood and have been managed in a professional manner. The local
infrastructure and workforce are both stable and predictable.
The Mineral Resource and Mineral Reserve estimation methodology is in accordance with
industry standards, and has been proven over time through the exploration and mining
cycle. Technical parameters used to convert Mineral Resources to Mineral Reserves are
based on years of experience and have proven to be appropriate. Mineral Resources and
Mineral Reserves are estimated in accordance with NI 43-101 requirements.
The metallurgical performance of the zinc-lead mineralisation is also well established and
consistent. There is little variation in run-of-mine ore over time and recoveries and
concentrate grades are stable and predictable.
Deep intersections of ore grade material at the same stratigraphic position as the main
Zinkgruvan ore horizon strongly suggest continuation to depth of the main ore zones in
three areas. The areas are Burkland below 1,500m, the western part of Nygruvan at depth
and the extension of the Mellanby/Cecilia zones. Based on past experience it is considered
likely that the Mineral Resources will continue to expand with additional exploration work.
Given the depth of likely new discoveries and extensions and that of the current
underground working, further exploration work will involve more underground
development and diamond drilling.
The initiation of copper production in 2010 at Zinkgruvan now offers the potential to
increase the overall production rate and provide diversification of metal production,
reducing the economic sensitivity of the mine to lead and zinc prices.
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From an EHS perspective the mine is well organised and in general complies with best
practice. The site is compliant generally with its IPPC Licence conditions with the exception
of zinc in solution at the TMF and local night time noise levels. A new closure plan will be
produced shortly with revised costing. WAI considers that it is inevitable that these will be
higher than those of the current plan. The noise bund under construction should facilitate
compliance with night time noise limits.
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Central Sweden
26
RECOMMENDATIONS
WAI has the following recommendations:

Evaluate whether additional water treatment is required so that zinc
concentration in TMF return water can ever the mine’s IPPC Licence
standards; and

ZT61-0996/MM775
January 2013
Include contractors in any forthcoming H&S training.
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LUNDIN MINING
Central Sweden
27
REFERENCES
Hedström, P., Simeonov, A., Malmström, L., 1989; The Zinkgruvan Deposit, South-Central
Sweden: A Proterozoic, Proximal Zn-Pb-Ag Deposit in Distal Volcanic Facies: Economic
Geology, v 84, pp 1235-1261.
Sädbom, S., 2002; Extern och intern analysering av geologiska prover samt kvalitetskontroll
vid analysering (External and internal assaying of geological samples and quality control at
assaying), Internal Report, ZMAB.
Sullivan, J., MacFarlane, R., Cheeseman, S., 2004; A Technical Review of The Zinkgruvan
Mine in South-Central Sweden, a report from Watts, Griffis and McQuart Limited to South
Atlantic Ventures Ltd.
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DATE AND SIGNATURE
The effective date of this Technical Report, entitled “NI 43 101 Technical Report for
Zinkgruvan Mine, Central Sweden” is 18 January 2013.
Mark Owen
Date: 18 January 2013
Lewis Meyer
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Central Sweden
CERTIFICATE OF AUTHOR
I, Mark Lyndhurst Owen, BSc, MSc, MCSM, CGeol, EurGeol, FGS do hereby certify that:










I am a Technical Director of: Wardell Armstrong International Ltd Wheal Jane,
Baldhu, Truro, TR3 6EH, United Kingdom;
I graduated with a Bachelor Degree in Geology from Exeter University, Exeter,
Devon, UK in 1980 and thereafter graduated with a Masters Degree in Mining
Geology from Camborne School of Mines, Camborne, Cornwall UK in 1981;
I am a Fellow and Chartered Geologist of the Geological Society of London and
European Geologist;
I have practised my profession as a Mining Geologist for the past 31 years in areas of
gold and base metals evaluation in a number of countries around the world;
I have read the definition of “qualified person” set out in National Instrument 43-101
(“NI 43-101”) and certify that I am a “qualified person” for the purposes of NI 43101;
I am responsible for all of the items, “NI 43 101 Technical Report for Zinkgruvan
Mine, Central Sweden” dated 18 January 2013;
I visited the property discussed in the 2013 Report during November 2012 for a
period of 3 days;
As of the date of this certificate and to the best of my knowledge, information and
belief, the 2013 Report contains all scientific and technical information that is
required to be disclosed to make the 2013 Report not misleading;
I am independent of the Lundin Mining Corporation as described in section 2.1 of NI
43-101; and
I have read the instrument NI-43-101 and the 2013 Report has been prepared in
compliance with NI 43-101.
Name M L Owen BSc, MSc, MCSM, CGeol, FGS, EurGeol
ZT61-0996/MM775
January 2013
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Central Sweden
CERTIFICATE OF AUTHOR
I, Lewis Meyer, ACSM, MCSM, BEng, MSc, PhD, CEng, FIMMM do hereby certify that:










I am an Associate Director of: Wardell Armstrong International Ltd Wheal Jane,
Baldhu, Truro, TR3 6EH, United Kingdom;
I graduated with a Bachelor Degree in Mining Engineering from Camborne School of
Mines, Camborne UK in 1991, Masters Degree in Rock Mechanics & Foundation
Engineering form University of Newcastle Upon Tyne in 1995, and PhD in
Geomechanics from the University of Exeter, UK in 2001;
I am a Fellow and Chartered Engineer of the Institute of Materials, Minerals and
Mining;
I have practised my profession as a Mining Engineering for the past 21 years in areas
of gold and base metals evaluation in a number of countries around the world;
I have read the definition of “qualified person” set out in National Instrument 43-101
(“NI 43-101”) and certify that I am a “qualified person” for the purposes of NI 43101;
I am responsible for all of the items, “NI 43 101 Technical Report for Zinkgruvan
Mine, Central Sweden” dated 18 January 2013;
I visited the property discussed in the 2013 Report during November 2012 for a
period of 3 days;
As of the date of this certificate and to the best of my knowledge, information and
belief, the 2013 Report contains all scientific and technical information that is
required to be disclosed to make the 2013 Report not misleading;
I am independent of Lundin Mining Corporation as described in section 2.1 of NI 43101; and
I have read the instrument NI-43-101 and the 2013 Report has been prepared in
compliance with NI 43-101.
Name Lewis Meyer, ACSM, MCSM, BEng, MSc, PhD, CEng, FIMMM
ZT61-0996/MM775
January 2013
Final V3.0
Page 157

LUNDIN MINING NI 43-101 Technical Report for the Zinkgruvan

Transcription

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