Bluelake Mineral AB (publ) (the "Company" or "Bluelake Mineral") is pleased to announce the results of a Preliminary Economic Assessment ("PEA") for its 100% owned copper and zinc project which comprises the Stekenjokk-Levi deposit, located in Sweden, and the Joma deposit, located in Norway (the "Project"). The PEA considers a target 750 kilo tons per annum ("ktpa") mining operation over a mine life of 17 years. The Company believes the Project has the potential to supply copper and zinc to the growing renewable energy economy of northern Europe.
PEA Highlights:
Bluelake Mineral has consolidated the ownership of these two assets which are approximately 60 km apart by paved road, with the intention of evaluating and implementing a re-start of the two historical mines utilising a single ore processing plant at the Joma project location. Future campaign mine production at Stekenjokk-Levi will be considered during winter months only. A combined Run of Mine ("ROM") production rate of 750 ktpa at Joma processing facilities to produce three separate concentrates (copper, zinc and lead) and doré (gold and silver).
"The completion of the PEA is a significant milestone as it displays Joma and Stekenjokk-Levi as financially viable and sustainable projects with potential of producing a high quality copper and zinc concentrate to the European e-vehicle and battery industry as well as other sectors for an extended period of time" says Peter Hjorth, CEO of Bluelake Mineral. "We are committed to commence the next phase of the project with the ambition of developing operations that could enable supply of critical raw materials in the ongoing electrification process which is instrumental to mitigate global climate change. We will work in close collaboration with local and regional stakeholders in order to establish this project in an environmentally sound and socio-economically sustainable way".
The PEA was prepared by independent consulting firm SRK Consulting (UK) Ltd ("SRK") and includes the respective Mineral Resource statements reported according to Canadian Institute of Mining, Metallurgy, and Petroleum ("CIM") Definition Standards for Mineral Resources and Reserves ("CIM Definition Standards"). These standards are internationally recognised and allow the reader to compare the Mineral Resource with that reported for similar projects.
The reader is advised that the PEA summarised in this press release is preliminary in nature and is intended to provide an initial, high-level review of the project's economic potential and development options. The PEA mine schedule and economic model includes numerous assumptions and the use of Inferred Mineral Resources. Inferred Mineral Resources are considered to be too speculative geologically to have economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the PEA will be realised. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
Economic Analysis
Introduction
The PEA is based on the combined production from the Joma and Stekenjokk-Levi underground mines over a 17-year period following a 2-year pre-production period for construction, development and commissioning activities. The Joma process facility has a planned production rate of 750 ktpa for the first 11 years, ramping down to 500 ktpa till the end of the mine life.
The commodity price scenarios applied in the PEA are described as follows (see Table 1):
Table 1: PEA Metal Price Scenarios
The following general assumptions have been applied in the PEA:
Table 2: Commercial Smelter Terms
Capital and Operating Costs
The annual capital cost estimate over the LoM is shown in Figure 1 with the initial 2-year period of preproduction and also a provision for closure costs at the end of the mine life.
Figure 1: Capital Cost estimate over the LoM
The annual operating cost estimate over the LoM is shown in Figure 2 with an initial production rate of 750 ktpa in Year 1, ramping down to 500 ktpa after Year 11 till the end of the mine life. The operating cost is variable based on the underground truck haulage distance which typically increases with the depth of mining and additional costs for transport of ROM from the Stekenjokk-Levi mines to the Joma processing facility. Figure 3 shows the annual split of unit operating cost (USD/tROM) over the LoM.
Figure 2: Operating Cost estimate over the LoM
Figure 3: Unit operating Cost estimate over the LoM
Economic Analysis - LTC Case
The annualised and cumulative post-tax cashflow for the LTC Case is provided in Figure 4 with an average annual post-tax cashflow of USD 21.7 m during the production Years 1 to 17 and payback in Year 6. The cashflow is variable mainly based on the annual production rate, grade variation, operating costs and ROM tonnage transported from Stekenjokk-Levi to the Joma processing facilities.
Figure 4: LTC Case: Post-Tax Cashflow over LoM
The percentage of gross revenue by metal is provided in Figure 5, with approximately 58.9% estimated for copper, 22.5% from zinc, 8.8% from silver, 5.5% from lead and 4.3% from gold.
Figure 5: LTC Case: Percentage of Gross Revenue by Metal
A summary of the post-tax cashflow analysis results from the PEA including Net Present Value ("NPV") and Internal Rate of Return ("IRR") is provided in Table 3. Figure 6 provides a sensitivity of the NPV for the Base Case Copper price Capital and Operating costs for the Project.
Table 3: LTC Case: PEA post-tax cashflow analysis results
PEA Summary - LTC Case |
Units |
Value |
Net Free Cash |
USDm |
294 |
NPV (8%) |
USDm |
87 |
IRR |
% |
19.8% |
Figure 6: LTC Case: NPV Sensitivity Analysis
Economic Analysis - Strategic Case
The annualised and cumulative post-tax cashflow for the Strategic Case is provided in Figure 7 with an average annual post-tax cashflow of USD 36.3 m during the production Years 1 to 17 and payback in Year 3. The cashflow is variable mainly based on the annual production rate, grade variation, operating costs and ROM tonnage transported from Stekenjokk-Levi to the Joma processing facilities.
Figure 7: Strategic Case: Post-Tax Cashflow over LoM
The percentage of gross revenue by metal is provided in Figure 8, with approximately 52.5% estimated for copper, 31.5% from zinc, 7.6% from silver, 4.4% from lead and 4.0% from gold.
Figure 8: Strategic Case: Percentage of Gross Revenue by Metal
Table 4: Strategic Case: PEA post-tax cashflow analysis results
PEA Summary - Strategic Case |
Units |
Value |
Net Free Cash |
USDm |
543 |
NPV (8%) |
USDm |
201 |
IRR |
% |
34.0% |
Figure 9: Strategic Case: NPV Sensitivity Analysis
Environmental, social and governance
Demonstrating good environmental, social and governance ("ESG") practice is central to Bluelake Mineral's vision of the Project. The Joma and Stekenjokk-Levi deposits have the potential to provide a secure, local source of low-carbon intensity critical raw materials to a rapidly expanding green technology manufacturing industry in northern Europe. The following highlights the key positive ESG credentials of the Project:
The Company will need to work closely with local stakeholders including land owners to reduce the Project's impact and ensure the Project provides long-term benefits to the local area. This is particularly relevant to Sámi reindeer herding communities, with collaboration required to ensure access to pastureland and migration routes. For example, through ongoing discussions subsequent to submitting an exploitation concession application for Stekkenjokk-Levi, the Company adjusted the previous operational plan in collaboration with the Sámi community to ensure both land users can work in tandem. The Company is committed to continued engagement with all key stakeholders and in cooperation with the authorities.
The PEA outlined a number of options to reduce the impacts of the Project on the environment that will be explored further in future technical studies. This includes the use of electric vehicles, conveyor systems and the use of existing already modified brownfield sites.
The Joma Deposit
Overview
The Joma deposit is a brownfields project with Cu-Zn mineralisation of Caledonian volcanogenic massive sulfide ("VMS") style. The individual lenses vary greatly in thickness and length with the massive zone attaining a maximum thickness of about 50 m. The orebody forms a folded, plate-like body that dips steeply to the west-southwest from the surface and flattens out at depth. This project was a historical underground mine in production during the period 1972 to 1998 with approximately 11 Mt of processed ore (Grong Gruber AS). Residual and unmined zones of this deposit have been the topic of previous historical resource estimates.
SRK ran a mineable stope optimiser ("MSO") using the minimum stope dimensions of 10m x 10m x 3m in order to define potential realistic mining targets to be generated. The resultant MSO shapes were used to constrain the reporting of the Mineral Resource. Furthermore, SRK notes that the majority of the defined MSO shapes occur within 50m of the depletion survey for the mine as shown in Figure 10, other than at Joma South.
Figure 10: North-east view of the MSO shapes (red) in relation to the depletion survey (blue). The MSO shapes have been used to constrain the reporting of the Mineral Resources
The Mineral Resource Estimate ("MRE") for the Joma deposit, used as a basis for the PEA, is presented in Table 5 The MRE is reported and classified in accordance with the CIM Definition Standards for Mineral Resources and Mineral Reserves (May 2014) and NI43-101 Standards of Disclosure for Mineral Projects (May 2016).
Table 5: SRK December 2021 Mineral Resource statement for the Joma Project*
Deposit |
Classification |
Tonnes (Mt) |
Cu % |
Zn % |
NSR (USD/tROM) |
Cu tonnes (kt) |
Zn tonnes (kt) |
Joma |
Measured |
- |
- |
- |
- |
- |
- |
Indicated |
6.0 |
1.00 |
1.66 |
95.95 |
60.0 |
99.6 |
|
Inferred |
0.3 |
0.9 |
1.4 |
81.3 |
3 |
4 |
|
Joma South |
Measured |
- |
- |
- |
- |
- |
- |
Indicated |
- |
- |
- |
- |
- |
- |
|
Inferred |
0.9 |
1.3 |
0.5 |
102.2 |
12 |
5 |
|
Total Indicated Mineral Resource |
6.0 |
1.00 |
1.66 |
95.95 |
60.0 |
99.6 |
|
Total Inferred Mineral Resource |
1.2 |
1.2 |
0.7 |
97.0 |
15 |
9 |
*In reporting the Mineral Resource Statements, SRK notes the following:
Permitting
The Company holds nine mineral permits in the Joma region, including six permits overlying the Joma deposit, and three covering separate deposits. The Joma mine and plant areas are covered by 'extraction' permits (Norwegian: Utvinningsrett) that were approved in April 2021 for an indefinite period of time.
For environmental approval, the Company recently finalised an ESIA, which is currently under review by the authorities (Røyrvik municipality) to gain zoning plan approval (under the Planning and Building Act 2008). Prior to commencing operation, the Company must also gain approval through a discharge/emissions permit (under the Pollution Control Act 1981), operating permit (under the Minerals Act 2009) and building permit (under the Planning and Building Act 2008).
Mining
The mining inventory for Joma was estimated using a similar approach as for mineral resources. NSR values were estimated into the block model using lower consensus market forecast ("CMF") prices of 7,000 USD/t for copper and 2,150 USD/t for zinc. Minimum MSO stope shapes of 10mX x 10mY x 3mZ were used as a mining target with an NSR cut-off of 50 USD/tROM. The mining inventory totals 3.6 Mt with the following mining methods and modifying factors applied:
Figure 11 and Figure 12 provide respective plan and long views of the mining inventory (green) and historical mine development which will need to be rehabilitated to restart mining. The historical mine is currently flooded with a bulkhead blocking the entrance of the existing adit at the 480 mRL and a staged dewatering program is required during the preproduction period.
The mine plan for Joma considers storage underground of all future tailings from the process facilities as a paste backfill in the historic (and future) mining voids. This also includes future ore processed from the Stekenjokk-Levi deposit at the Joma process facility.
Materials handling at Joma considers truck haulage to surface with tailings sent back underground as slurry to an underground paste plant. Paste backfill will be moved to stopes with a combination of reticulation piping and agitator trucks as required.
Figure 11: Plan view of the Joma Mining Inventory and historical mine development and stopes
Figure 12: Long view of the Joma Mining Inventory and historical mine development and stopes, looking northeast
The Stekenjokk-Levi Deposit
Overview
The Stekenjokk-Levi deposit (Figure 13) is a brownfields project with Zn-Cu-Pb-Ag-Au mineralisation of Caledonian VMS style. This project was a historical underground mine in production during the period 1976 to 1988 with approximately 7 Mt of processed ore (Boliden). The ore is typically shallow dipping to flat with thickness between 2 and 20 m. All mining took place underground as cut-and-fill mining using the coarse fraction of the flotation tailings as back-fill material with high percentage ore recovery achieved. Flatter areas used the room and pillar method with the coarse tailings backfill as a working floor in thicker areas. Unmined zones of this deposit have been the topic of previous historical resource estimates.
Figure 13: View of the Resource block model for the Stekenjokk-Levi deposit coloured by Classification, blue = Inferred material
The MRE for the Stekenjokk-Levi deposit, used as a basis for the PEA, is presented in Table 6. The MRE is reported and classified in accordance with the CIM Definition Standards for Mineral Resources and Mineral Reserves (May 2014) and NI 43-101 Standards of Disclosure for Mineral Projects (May 2016).
Table 6: SRK Mineral Resource Statement for the Stekenjokk Project, Sweden, as of 23 November 2021*
*In reporting the Mineral Resource Statements, SRK notes the following:
Permitting
The Stekenjokk-Levi deposit is currently covered by two exploration licences. Applications for exploitation concessions were submitted to the authorities in 2019 and currently under review. Although the Jämtland County Administrative Board ("CAB") agreed to authorising the Stekenjokk K nr 1 permit, the Västerbotten CAB requested the Company to conduct more detailed environmental studies into the impact of the potential mine on the Natura 2000 protected area of Vardo-, Laster- och Fjällfjällen surrounding the Levi K Nr 1 permit area. This study was completed in 2021 and submitted to the authorities for review.
In addition to the exploitation concession, mining activities require an environmental permit (under the Swedish Environmental Code, 2000). For this environmental approval, the Company is required to undertake a more detailed ESIA, which will be reviewed by Swedish Environmental Protection Agency in conjunction with the Västerbotten/Jämtland CAB. In addition, a building permit (under the Planning and Building Act 2010) and land designation (under the Minerals Act, 1991) are required.
Mining
The Stekenjokk-Levi deposit is separated into two mines with shared surface infrastructure. All future ore from the Stekenjokk and Levi mines will be transported from Sweden 60 km to the Joma process facilities in Norway. All tailings from the processing of Stekenjokk-Levi will be stored underground as a paste backfill in the substantial historic voids at the Joma mine.
The mining inventory for both the Stekenjokk and Levi mines were estimated using a similar approach as for the mineral resources. NSR values were estimated into the block model using lower CMF prices of 7,000 USD/t for copper, 2,150 USD/t for zinc, 1,850 USD/t for lead, 1,380 USD/oz for gold and 19.3 USD/oz for silver. Mineable shapes were defined using a minimum mining width of 2 m where the dip of the mineralisation is in excess of 40° and a minimum mining width of 3 m where the dip of the mineralisation is less than of 40°with an NSR cut-off of 60 USD/tROM.
The mining inventory for Stekenjokk totals 5.4 Mt with a combination of R&P and longhole open stoping mining methods applied with modifying factors of 5% dilution and 15% losses.
Figure 14 and Figure 15 provide respective plan and long views of the mining inventory by method as well as existing development that will need to be rehabilitated to restart mining and future planned development. The historical Stekenjokk mine is currently flooded and a staged dewatering program is required during the preproduction period. Materials handling at Stekenjokk considers truck haulage to surface prior to contract transportation to the Joma process facilities.
Figure 14: Plan view of the Stekenjokk Mining Inventory by mining method and existing and planned development
Figure 15: Long view of the Stekenjokk Mining Inventory by mining method and existing and planned development, looking northwest
The mining inventory for Levi totals 2.3 Mt (57% tonnes from Levi South and 43% tonnes from Levi North) with the following mining methods and modifying factors applied:
Figure 16 and Figure 17 provide respective plan and long views of the mining inventory by method as well as the future planned development through decline access at Levi South. Materials handling at Levi considers truck haulage to surface prior to contract transportation to the Joma process facilities.
Figure 16: Plan view of the Levi Mining Inventory by mining method and existing and planned development
Figure 17: Long view of the Levi Mining Inventory by mining method and existing and planned development, looking southwest
Mining Inventory and Schedule
The PEA mining inventory is provided in Table 7 showing the contribution of ROM tonnes and grades from the individual mines of Joma, Stekenjokk and Levi.
Table 7: Mining Inventory for the Joma, Stekenjokk and Levi mines
The combined mining schedule for the Project is shown in Figure 18 considers the following:
Figure 18: Annual combined mining schedule
Table 8 provides a summary of the main development and rehabilitation milestones to be achieved prior to and during production for the Joma, Stekenjokk and Levi mines. The mine plan also includes a provision to commence dewatering of the Joma mine from Year -2 and dewatering of the Stekenjokk mine from Year 4.
Table 8: Development and Rehabilitation milestones for the Joma, Stekenjokk and Levi mines
Mineral Processing
The PEA assumes that a single beneficiation plant will be built on the site of the previous Joma concentrator with a capacity of 750 ktpa. Due to differing head grades and historical metallurgical responses, the ores from Joma, Stekenjokk and Levi will be processed in individual campaigns.
The flowsheet will consist of crushing and grinding ahead of flotation to produce separate concentrates. Joma ore will produce copper and zinc concentrates, and Stekenjokk and Levi will produce copper, zinc and lead concentrates. Precious metals (gold and silver) will report to the different concentrates according to their specific metallurgical responses.
Concentrate grades and metal recoveries used in the PEA are shown in the Table 9 below which are based on historical production performance.
Table 9: Processing recoveries and concentrate grades
Green Case Assessment
An additional concept-level 'Green Case' has been assessed to understand the early-stage potential for a fully electric mine utilising developing battery-electric technologies for underground loaders and trucks. The main atmospheric contaminants from underground mining are emissions from dieselpowered equipment, primarily loaders and trucks. Table 10 provides a summary estimate of the LoM diesel fuel and lubricant usage for each mine.
Table 10: Summary of diesel fuel and lubricant usage over LoM
Figure 18 shows a high-level estimate of the carbon dioxide and sulphur dioxide emissions from the diesel equipment and emulsion explosive usage over the PEA mine plan for Joma and Stekenjokk-Levi.
Figure 18: Atmospheric Contaminants from Mining Activities
Table 11 provides a comparison of the concept-level capital and operating costs which indicates higher capital costs for the electric mine approach but opportunities for a lower operating cost over the LoM.
Table 11: Green Case - LoM Capital and Operating Cost comparison
The results from the Green Case Assessment provide an early indication of the potential for reducing atmospheric contaminants in the mine plan for Joma and Stekenjokk-Levi and the indicative costs. It is recommended that future more detailed planning is undertaken with consultation with equipment suppliers to understand the requirements (and costs) of reducing diesel-powered mobile equipment and practically implementing developing battery-electric and trolley assist technologies at the individual mines.
Future Work
Based on the results of this PEA, the Company intends to advance the consolidated Joma and Stekenjokk-Levi projects to the confidence level of a PFS while continuing it's ongoing permitting and stakeholder engagement activities at both projects. The PFS will require further mining technical studies and in parallel detailed ESIA studies for final permitting approval. The key aspects of the future work program include:
The PFS and supporting investigation and technical work will be used as a basis for future permitting applications that must be obtained after the zoning plan has been adopted:
The PEA will be used as a basis for detailed project planning and estimating the cost of future studies (including the ESIA) and permitting for the Project.
Stakeholder Engagement
The Company continues to work in partnership with the local authorities and understands the importance of strong local support and partnerships with all stakeholders. The Company will use the PEA as a communication tool to continue dialogue with project-affected people, particularly Sámi representatives.
The Project is expected to provide approximately 200 jobs during the life of mine operation with a significant socio-economic impact on the region expected.
Independent Qualified Person
The PEA was prepared by SRK for Joma Gruver AS (part of the Bluelake Mineral Group), managed by Mr Chris Bray (MAusIMM(CP) who is a Qualified Persons ("QP") as defined in CIM Definition Standards. The Mineral Resources used as a basis for the PEA were the responsibility of Dr Lucy Roberts MAusIMM(CP) of SRK who is defined as a QP under the CIM definition standards.
____________
Stockholm, May 2022
Bluelake Mineral AB (publ)
The Board of Directors
Publication of information
This information is inside information which Bluelake Mineral AB (pull) is required to publish in accordance with the EU Market Abuse Regulation. The information was submitted, for publication on May 5, 2022, at 8.50 am CET, by the contact person below.
Additional information
For additional information, please contact:
Peter Hjorth, CEO, Bluelake Mineral AB (public), phone +46-725 38 25 25
Email: [email protected]
General information about the Company
Bluelake Mineral AB (pull) is an independent Swedish company active in exploration and mine development of copper, zinc, nickel and gold resources.
The Company owns approximately 99% of the subsidiary Vilhelmina Mineral AB, which is focusing on development of copper and zinc deposits in the Nordic region. In Sweden, the Company owns Stekenjokk-Levi project, where a total of approximately 7 million tonnes of ore were mined between 1976 and 1988 with an average grade 1.5% Cu and 3.5% Zn. Stekenjokk-Levi is, according to a recent Mineral Resource Estimate by SRK Consulting, containing inferred mineral resources of approximately 6.7 million tonnes with 0.9 % Cu, 2.7 % Zn, 0.6 % Pb, 55 Ag g/t and 0.2 g/t Au for Stekenjokk and inferred mineral resources of 5.1 million tonnes with 1.0 % Cu, 1.5 % Zn, 0.1 % Pb, 22 Ag g/t and 0.2 g/t Au for Levi (at a NSR cut-off of 60 USD/t). In Norway, the Company is owner in the Joma field, where approximately 11.5 million tonnes of ore were processed between 1972 and 1998 with an average grade of 1.5% Cu and 1.5% Zn. The Joma field (excluding Gjersvik) is, according to a recent mineral estimate by SRK Consulting, containing indicated mineral resources of approximately 6 million tonnes with grades amounting to 1.00 % Cu and 1.66 % Zn and inferred resources of 1.2 million tonnes with grades 1.2 % Cu and 0.7 % Zn (at cut-off of 50 USD/t).
In addition, the Company owns the nickel projects Rönnbäcken (which is Europe's largest known undeveloped nickel resource) and Orrbäcken in Sweden. According to a recently updated mineral resource update in by the mining consulting company SRK, the Rönnbäcken project contains a mineral resource of 600 million tonnes with an average grade of 0.18% Ni, 0.003% Co and 5.7% Fe ("measured and indicated"). The updated preliminary economic assessment that SRK completed predicts a production of 23,000 tonnes of nickel, 660 tonnes of cobalt and 1.5 million tonnes of iron per year for 20 years, which would be a significant proportion of Sweden's total annual use of nickel which thereby has a strategic value. Orrbäcken is an exploration license that is considered to have potential as a nickel deposit.
The Company owns the gold project Haveri, through its subsidiary Palmex Mining Oy, which in 2014 carried out a so-called Preliminary Economic Assessment (PEA) prepared by SRK Consulting. This report estimates 1.56 million oz. historically inferred mineral resource of gold equivalents with a grade of 0.93 g/t gold.) Kattisavan is mainly considered to have potential as a gold resource and is located within the so-called gold line, close to projects such as Svartliden, Fäboliden and Barsele.