Contained Graphite Increased at Aitolampi

RNS Number : 5371R
Beowulf Mining PLC
30 October 2019
 

 

 

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations ("MAR") (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

30 October 2019

Beowulf Mining plc

("Beowulf" or the "Company")

Contained Graphite Increased by 81% For Aitolampi Higher-Grade Western Zone

Beowulf (AIM: BEM; Spotlight: BEO), the mineral exploration and development company, is pleased to announce an upgraded Mineral Resource Estimate ("MRE") for its Aitolampi graphite project in Finland. Aitolampi is part of the Company's 100 per cent owned Exploration Permit, Pitkäjärvi 1.

Oy Fennoscandian Resources AB ("Fennoscandian"), the Company's graphite business in Finland, is pursuing a strategy to develop a 'resource footprint' of natural flake graphite prospects that can provide 'security of supply' and enable Finland to achieve its ambition of self-sufficiency in battery manufacturing.  Fennoscandian is also developing its knowledge in processing and manufacturing value-added graphite products, as the Company seeks to move downstream.

Highlights:

·     An 81 per cent increase in contained graphite (compared to the 2018 MRE) for the higher-grade western zone with an Indicated and Inferred Mineral Resource of 17.2 Million Tonnes ("Mt") at 5.2 per cent Total Graphitic Carbon ("TGC") containing 887,000 tonnes ("t") of contained graphite.

·     An unchanged Indicated and Inferred Mineral Resource of 9.5 Mt at 4.1 per cent TGC for 388,000 tonnes of contained graphite for the eastern lens.

·     Updated global Indicated and Inferred Mineral Resource of 26.7 Mt at 4.8 per cent TGC for 1,275,000 t of contained graphite (reported in accordance with the 2012 JORC Code(1)).  All material is contained within two graphite mineralised zones, the eastern and western lenses, interpreted above a nominal three per cent TGC cut-off grade.

·     An augmented global Indicated and Inferred Mineral Resource of 11.1 Mt at 5.7 per cent TGC for 630,000 t of contained graphite, reporting above a five per cent TGC cut-off, based on the grade-tonnage curve for the resource.

·     The Mineral Resource was estimated by CSA Global PTY Ltd ("CSA Global") of Australia.

(1)   Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. The JORC Code, 2012 Edition. Prepared by: The Joint Ore Reserves Committee of The Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia (JORC).

 

Kurt Budge, Chief Executive Officer of Beowulf, commented:

 

"The Fennoscandian team has delivered a strong result with an 81 per cent increase in contained graphite for the higher-grade western lens at Aitolampi.

 

"The team has had a busy year, following-up drilling at Aitolampi with fieldwork across four other graphite prospects in the Fennoscandian portfolio, while effectively using funding from the 'Green Minerals' and 'BATCircle' projects to support metallurgical testwork and value-add processing for battery-grade anode material.

 

"Fennoscandian is active across the value chain, as the Company continues to pursue its strategy to develop a 'resource footprint' of natural flake graphite prospects that can provide 'security of supply' and enable Finland to achieve its ambition of self-sufficiency in battery manufacturing.

 

"I look forward to keeping the market updated on further developments."

 

Swedish Translation:

 

"Fennoscandians team har levererat ett starkt resultat med en 81 procent ökning av det totala grafitinnehållet för den högre haltiga västra grafitlinsen vid Aitolampi.

 

"Teamet har haft ett hektiskt år med uppföljning av borrningar i Aitolampi, fältjobb på fyra andra projekt i företagets portfölj, samtidigt som bolaget effektivt använt finansiering från 'Green Minerals' och 'BATCircle' projektena som stöd för metallurgiska testarbeten och raffinering av grafiten som batterianodmaterial.

 

"Fennoscandian är aktiv över hela värdekedjan och fortsätter att följa sin strategi att göra ett 'fotavtryck' av naturliga flakgrafitförekomster som kan möjliggöra för Finland att uppnå sin ambition om att bli självförsörjande inom batteritillverkning.

 

"Jag ser fram emot hålla marknaden uppdaterad med fortsatta framsteg."

 

Finnish Translation:

 

"Fennoscandianin tiimi on tuottanut vahvan tuloksen Aitolammen korkeampipitoisella länsivyöhykkeellä, jonka kokonaisgrafiittimäärä on saatu kasvamaan 81 prosentilla.

 

"Tiimillä on ollut kiireinen vuosi Aitolammen jatkokairauksilla ja kenttätöillä neljällä uudella projektilla, samaan aikaan kun yhtiö on aktiivisesti käyttänyt 'Green Minerals' ja 'BATCircle' -projektien rahoitusta tukena eri metallurgisiin testitöihin ja grafiitin jatkojaloustustesteihin akkuanodimateriaalisovelluksiin.

 

"Fennoscandian toimii aktiivisesti koko arvoketjussa ja seuraa edelleen strategiaansa tehdä "jalanjälki" luonnollisista suomugrafiittiesiintymistä, joiden avulla Suomi voi saavuttaa tavoitteensa tulla omavaraiseksi akkujen valmistuksessa.

 

"Odotan innolla markkinoiden päivittämistä jatkuvan edistyksen myötä."

 

2019 Work Summary:

Mineral Resource Estimate

The Mineral Resource was estimated by CSA Global. The revised resource estimate is based on 23 diamond drill ("DD") holes for 3,608.92 metres ("m") (combined 2017 and 2019 drilling) of which five DD holes were completed in 2019 for 838.17m to augment the resource in the western higher-grade graphite mineralised lens. The mineral resource for the eastern lens did not change as no further drilling was conducted.

A volume block model was constructed using Datamine Studio RM software, constrained by topography, mineralised zones, overburden and model limiting wireframes. Drill sections were nominally spaced 50m to 100m apart and drill holes were spaced 60m to 70m apart on drill sections.  The resource was estimated within constraining wireframe solids and interpreted using logged graphite schist intersections at a nominal three per cent TGC cut-off. Grade estimation was carried out using ordinary kriging and checked using an inverse distance weighting to the power of two estimate.

The resource estimate was classified in the Indicated and Inferred categories in accordance with the JORC 2012 code, based on surface geological mapping, geophysical information, drill hole sample analytical results, drill hole logging, and assigned density values determined on density measurements from DD drill core.

JORC (2012) Table 1 is included in Appendix 1 at the end of this announcement.

MRE for Aitolampi as at 28 August 2019

Classification

Mt

TGC %

S %

Density (t/m3)

Contained graphite (kt)

Indicated

11.0

4.9

4.9

2.80

542

Inferred

15.7

4.7

4.6

2.81

733

Indicated + Inferred

26.7

4.8

4.7

2.81

1,275

Note: The Mineral Resource was estimated within constraining wireframe solids defined within the logged graphitic schist host unit and nominally above a 3% TGC cut-off. The Mineral Resource is reported from all blocks within these wireframe solids Differences may occur due to rounding.

MRE by mineralisation zone:

Zone

Classification

Mt

TGC %

S %

Density (t/m3)

Contained graphite (kt)

Western lens

Indicated

9.2

5.1

5.0

2.80

468

Inferred

8.0

5.2

4.7

2.80

419

Indicated + Inferred

17.2

5.2

4.8

2.80

887

Eastern lens

Indicated

1.8

4.1

4.4

2.82

74

Inferred

7.7

4.1

4.5

2.82

314

Indicated + Inferred

9.5

4.1

4.5

2.82

388

TOTAL

Indicated + Inferred

26.7

4.8

4.7

2.81

1,275

Note: The Mineral Resource was estimated within constraining wireframe solids defined within the logged graphitic schist host unit and nominally above a 3% TGC cut-off. The Mineral Resource is reported from all blocks within these wireframe solids. Differences may occur due to rounding.

Grade-tonnage table - all mineralisation:

Cut-off grade (TGC %)

Mt

TGC %

Contained graphite (kt)

7.5

0.04

7.6

3

7

0.2

7.2

15

6.5

0.7

6.9

49

6

2.3

6.4

145

5.5

6.2

6.0

371

5

11.1

5.7

630

4.5

15.4

5.4

832

4

20.3

5.1

1,042

3.5

25.3

4.9

1,228

3

26.7

4.8

1,273

0

26.7

4.8

1,275

 

Portfolio Exploration Programme

Following completion of drilling at Aitolampi, Fennoscandian's exploration began evaluating other prospects in the Company's exploration portfolio, conducting field work through the summer, including bedrock mapping, outcrop sampling and ground geophysics at the Company's recently granted Claim Reservation areas Polvela, Tammijärvi, Karhunmäki and Merivaara, which show potential for flake graphite mineralisation.  Composite samples from each prospect have now been sent to SGS in Lakefield, Canada for Scoping Level Metallurgical Testing.

Testwork

 

ProGraphite Gmbh ("ProGraphite") in Germany has recently completed a purification and spheronisation programme using concentrates from Aitolampi. ProGraphite specialises in the processing and evaluation of graphite materials.

 

In addition, battery tests on Aitolampi purified micronized and purified spheronised graphite are being completed at the Battery Materials Laboratory in Kokkola, Finland.

 

Environmental Baseline Studies

 

In Spring 2018, Pöyry Finland Oy ("Pöyry") completed an Environmental and Social Impact Assessment ("ESIA") Roadmap, a detailed plan for undertaking a comprehensive ESIA study.  The Company selected Pöyry for the roadmap, as it is one of the leading environmental consultants in the Finnish mining sector.

 

In January 2019, the Company initiated baseline water quality monitoring. The Finnish contractor EHP Environment Oy is providing the service of water quality monitoring using EHP-QMS monitoring stations to enable 24/7 monitoring of pH and conductivity of surface water, ground water levels as well as precipitation, wind direction and air temperature data. Surface water flow rate data and samples for chemical analysis are also being collected from four different locations.

 

External Collaborations and Funding

 

In April 2018, Fennoscandian joined a Cooperation Network of existing and new entrant raw materials suppliers to the emerging battery manufacturing industry in Finland. 

The Cooperation Network includes the cities of Vaasa and Kokkola; Freeport Cobalt, the world's largest cobalt refinery and producer of battery chemicals; Nornickel, the producer of world-class nickel metals and nickel chemicals in Harjavalta; Finnish Minerals Group, the parent company of Terrafame, producing nickel, zinc, cobalt and copper in Sotkamo; Keliber, which is preparing to start lithium production in Kaustinen and Kokkola; as well as Fennoscandian.

Also, Fennoscandian was granted Euros 161,000 by Business Finland for a research project entitled "Green Minerals - Graphite, Exploration to Products".  The project runs from 1 January 2018 to 31 December 2019 and has a total budget of Euros 323,750.  The Company will contribute the balance of the funding.

In March 2019, the Company announced that Fennoscandian is to receive additional funding from Business Finland, 50 per cent contribution to a budget of Euros 224,900, for graphite purification and spheroidization testwork, and the further assessment of Fennoscandian's graphite for battery applications.  Business Finland has been granted Euro 10 million funding for a project titled "BATCircle - the development of a Finland-based Circular Ecosystem of Battery Metals".

 

Competent Person Review

 

This report on Mineral Resources for the Aitolampi Graphite Project is based on information compiled by Mr Aaron Meakin, under the direction and supervision of Dr Andrew Scogings. Mr Meakin is a full-time employee of CSA Global and Dr Scogings is an Associate of CSA Global. Dr Scogings takes overall responsibility for the report. Dr Scogings is a Member of both the Australian Institute of Geoscientists and Australasian Institute of Mining and Metallurgy, and has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration, and to the activity he is undertaking, to qualify as a Competent Person ("CP") in terms of the "Australasian Code for Reporting of Exploration Results, Mineral Resources, and Ore Reserves" (JORC Code 2012).

Dr Andrew Scogings approves the disclosure of technical information in the form and context in which it appears in this announcement, in his capacity as a CP, as required under the AIM rules.

 

Dr Scogings is a geologist with more than 25 years' experience in industrial minerals exploration, product development and sales management.  Andrew has published papers on reporting requirements of the JORC Code 2012, with specific reference to Table 1 and Clauses 18 and 19 (industrial mineral Exploration Results) and Clause 49 (industrial mineral specifications). He has published numerous articles on industrial minerals, addressing aspects of QA/QC, bulk density methods and petrography for industrial minerals exploration. He was recently senior author of two significant reviews: Natural Graphite Report - strategic outlook to 2020 and Drilling grade barite - Supply, Demand & Markets published in 2015 by Industrial Minerals Research (UK), and has co-authored several papers ranking global graphite exploration projects. Andrew is a Registered Professional Geoscientist (RP Geo. Industrial Minerals) with the Australian Institute of Geoscientists.

 

Mr Aaron Meakin is a geologist with over 24 years' experience in mining, resource development and exploration. Mr Meakin has significant mine production experience, having worked at both underground and open-pit operations. His Mineral Resource estimation experience spans a range of commodities and styles of mineralisation, including graphite deposits.

 

About Beowulf Mining plc

Beowulf's strategy is to build a sustainable and innovative mining company, which creates shareholder value by developing mining assets, delivering production and generating cash flow, and in so doing meets society's ongoing need for minerals, metals and economic prosperity.

Beowulf is developing a high-quality asset base, which is diversified by geography and commodity, enabling it to simultaneously advance several projects up the mining value curve and create shareholder value.

Additionally, the Board of Directors continues to look beyond the Company for value creation opportunities.

The Company's first priority remains the award of the Exploitation Concession for Kallak North, and thereafter completing the Scoping Study.  The introduction of a strategic partner/investor who understands the value of Kallak as a high-quality asset, which could be in production within four to five years, is an ongoing consideration, but does not preclude the Company from continuing to add value to Kallak in the meantime.

Fennoscandian Resources ("Fennoscandian"), the Company's graphite business, is pursuing a strategy to develop a 'resource footprint' of natural flake graphite prospects that can provide 'security of supply' and enable Finland to achieve its ambition of self-sufficiency in battery manufacturing.  The Company is a recipient of Business Finland funding, which is supporting Fennoscandian to move downstream, and develop its knowledge in processing and manufacturing value-added graphite products.

The Company owns 40.1 per cent of Vardar Minerals ("Vardar"), a UK registered exploration company with a focus on the metal endowed Balkan region and one of the first companies to be awarded exploration licences in Kosovo.  Vardar holds exploration licences for the Mitrovica and Viti projects.  Both projects are located within the Tethyan Belt, a major orogenic metallogenic province for gold and base metals which extends from the Alps (Carpathians/Balkans) to Turkey, Iran and Indochina, and contains several world class discoveries.  The Tethyan Belt of south-east Europe can be regarded as Europe's chief copper-gold (lead-zinc-silver) province.

 

Enquiries:

Beowulf Mining plc


Kurt Budge, Chief Executive Officer

Tel: +44 (0) 20 3771 6993

SP Angel

(Nominated Adviser & Broker)


Ewan Leggat / Soltan Tagiev

Tel: +44 (0) 20 3470 0470

Blytheweigh 


Tim Blythe / Megan Ray 

Tel: +44 (0) 20 7138 3204

 

Cautionary Statement

Statements and assumptions made in this document with respect to the Company's current plans, estimates, strategies and beliefs, and other statements that are not historical facts, are forward-looking statements about the future performance of Beowulf. Forward-looking statements include, but are not limited to, those using words such as "may", "might", "seeks", "expects", "anticipates", "estimates", "believes", "projects", "plans", strategy", "forecast" and similar expressions. These statements reflect management's expectations and assumptions in light of currently available information. They are subject to a number of risks and uncertainties, including, but not limited to , (i) changes in the economic, regulatory and political environments in the countries where Beowulf operates; (ii) changes relating to the geological information available in respect of the various projects undertaken; (iii) Beowulf's continued ability to secure enough financing to carry on its operations as a going concern; (iv) the success of its potential joint ventures and alliances, if any; (v) metal prices, particularly as regards iron ore. In the light of the many risks and uncertainties surrounding any mineral project at an early stage of its development, the actual results could differ materially from those presented and forecast in this document. Beowulf assumes no unconditional obligation to immediately update any such statements and/or forecasts.

Appendix 1:   JORC (2012) Table 1

Section 1: Sampling Techniques and Data

Criteria

Commentary

Sampling techniques

Diamond drill core was sampled based on visually observed graphite mineralisation.

The drill core was either half-cut (drillholes AITDD17001-AITDD17005) or quarter-cut (drillholes AITDD17006-AITDD17008, AITDD18009-AITDD18023).

Sampling was carried out under Oy Fennoscandian Resources Ab (Fennoscandian) sampling protocols and quality assurance/quality control (QAQC) procedures as per industry best practice.

The drill core has been sampled on geological intervals (1-3 m intervals) and 2 m intervals within wider mineralised intercepts where appropriate. All samples were crushed and pulverised to produce a sub-sample to be analysed for total graphitic carbon (TGC) by Leco furnace, total carbon (TC) by Leco furnace and total sulphur (TS) by Leco furnace and infrared spectroscopy.

Drilling techniques

Diamond drilling was completed by Northdrill Oy from Finland. Using WL76 equipment, with a core diameter of 61.77 mm. Core was orientated for all holes using Reflex ACT 3 core orientation tool.

Downhole surveys for all drillholes were completed by Northdrill Oy using a non-magnetic multi-shot Devico Deviflex instrument.

Drill sample recovery

The core recovery was physically measured and recorded by the drillers for every core run. Any core loss was recorded on the core blocks.

Core recovery was double-checked and measured for all drillholes by Fennoscandian geologists logging the core. The core length recovered was calculated as a percentage of the theoretical core length.

No additional measures were taken to maximise the core recovery.

The core recovery was generally very good. A sampling bias has not been determined.

Logging

All drill core was geologically logged determining lithology, mineralogy, mineralisation, texture, and structural observations.

Density, rock quality designation (RQD) and core recovery was measured for all drill core by the Fennoscandian geologists.

All drill core was photographed in wet and dry states after logging was completed and sample intervals had been marked on the core boxes.

Subsampling techniques and sample preparation

The drill core was either half-cut (drillholes AITDD17001-AITDD17005) or quarter-cut (drillholes AITDD17006-AITDD17008 and AITDD18009-AITDD18023). All core was sawed by ALS Finland Oy (ALS).

All core sawing was completed by ALS in Outokumpu.

Samples were prepared by ALS as per industry best practice. The entire sample is crushed with more than 70% passing the <2 mm, then reduced in a splitter to 250 g. The 250 g sample is pulverised with more than 85% passing <75 microns. A subsample of pulp is taken from homogenised sample to be analysed for TGC by Leco furnace, TC by Leco furnace and TS by Leco furnace and infrared spectroscopy. The sample sizes were considered appropriate for the type of mineralisation (graphite).

Quality of analytical data and laboratory tests

All samples were assayed for TGC by Leco furnace. TGC is determined by digesting sample in 50% HCl to evolve carbonate as CO2. Residue is filtered, washed, dried, and then roasted at 425°C. The roasted residue is analysed for carbon by high temperature (Leco) furnace with infrared analyser detection.

All samples were assayed for TC by Leco furnace.

All samples were assayed for TS by Leco furnace and infrared spectroscopy.

Selected samples were assayed with UltraTrace Level Method - 51 elements, including gold and mercury, by aqua regia digestion and a combination of ICP-AES and ICP-MS analysis.

The analytical methods are considered appropriate for the style of mineralisation.

Laboratory QAQC methods include insertion of certified standards, blanks and duplicates.

Duplicate samples were completed at an average rate of 1:22, while certified reference materials (CRMs) were inserted at an average rate of 1: 20 and blanks were inserted at an average rate of 1:27.

External laboratory checks at Actlabs Finland at rate of 1:40 for laboratory pulps and 1:40 for coarse rejects where practicable.

The quality control sample results give confidence in the accuracy and precision of the data, and no issues with carry-over contamination were noted.

Verification of sampling and analyses

Rasmus Blomqvist, the Competent Person for the exploration result reporting, has reviewed the drill core and verified significant graphite intersections.

No twinned holes have been drilled.

All location, geological and geotechnical data has been electronically stored relational databased which is managed by CSA Global.

No adjustments have been made to any assay data in this report.

Location of data points

All drill hole collars have been surveyed by T&J Holmback Ab Oy using a differential global positioning system (GPS) with an accuracy of ±1 cm.

The dip and azimuth of down the hole was measured by Northdrill using a non-magnetic multi-shot Devico DeviFlex survey device. Measurements were taken every 3 m for the 2017 program and every 4 m for the 2018 program. The five holes drilled in 2019 were surveyed, however there were issues with the data which were not able to be resolved prior to this Mineral Resource estimate. Drill rig set up data was therefore used. Given the relatively short lengths of these holes (114.1-211.5 m), and the fact that significant movement is not observed in the other holes, the Competent Person considers that this is reasonable.

The grid system used is EUREF FIN TM35FIN.

The topographic data used for the drill sections has been gridded from elevation data acquired from the National Land Survey of Finland.

Data spacing and distribution

The nominal drillhole section line spacing is between 50 m (southern four drill lines) and 100 m (northern two drill lines) apart, with drillholes variably spaced on the drill section lines to appropriately intersect the targeted mineralisation horizons.

Based on the geology at Aitolampi, which is a gneissic/schist terrane, a drill spacing of between 50 m and 100 m is considered sufficient for classification of Inferred and/or Indicated Mineral Resources in terms of geological confidence.

Most diamond core samples are taken as approximately 2 m lengths of half or quarter core, with barren core being sampled either side of graphite intersections. Diamond core sample breaks corresponded to geological boundaries wherever possible.

Orientation of data in relation to geological structure

All drillholes have been drilled perpendicular to the interpreted strike of the mineralisation and lithology.

No sampling bias as consequence of orientation-based sampling has been identified.

Sample security

The sample "chain of custody" is managed by Fennoscandian's geological personnel.

All core is stored in a locked facility in Kaarina.

Audits or reviews

The logging and assay data were imported into Datamine by CSA Global and no significant issues were found. Assay certificates were compared with the assay data provided and no errors were detected prior to the 2019 Mineral Resource update.

Mr Galen White, of CSA Global, has visited the assay laboratories in Outokumpu, Finland, and while no project samples were being handled at the time, the laboratory has a good reputation of having good standards of sample preparation and analytical procedures.

The sampling protocols employed are considered suitable for the mineral of interest (graphite), and analysis of quality control data, including umpire laboratory testing, indicated that laboratory procedures were satisfactory and fit for purpose, and that the analyses reported to date were acceptable.

 



 

Section 2: Reporting of Exploration Results

Criteria

Commentary

Mineral tenement and land tenure status

The Aitolampi mineralisation is located within exploration permit Pitkäjärvi (ML2016:0040).

The exploration permit is 100% owned by Oy Fennoscandian Resources Ab. No native title interest, historical sites, national parks or nature conservation areas exist within the exploration permit.

The exploration permit is in good standing with the local mining authority TUKES.

Exploration done by other parties

No historical exploration for graphite has been completed at the Aitolampi prospect.

Geology

The Pitkäjärvi exploration permit area belongs to the geological unit of the Karelian domain, part of the proterozoic svecokarelian supracrustal rocks. The area is in a regional open fold of considerable size, about 10 km wide and 20-30 km long which is cut by a regional fault zone(s) in the northeast. The fold is clearly visible on aeromagnetic and electromagnetic maps. Quartz-feldspar-biotite (QFB) gneiss is the most common rock type in the area. The main mineral composition of the gneiss is quartz, feldspars (mainly plagioclase), micas (mainly biotite) ±graphite. Accessory minerals seen in thin sections are zircons, garnets, sericite and chlorite. Graphite schist is common as layers and lenses in the QFB gneiss. These metasediments have been metamorphosed to the upper amphibolite to granulite facies (650-700°C, 4-5 kbar).

The graphite mineralisation at Aitolampi comprises several graphite lenses which generally extend for several hundred metres along strike and dips 40-50° to the southwest. Based on the completed drill program, the known graphite/sulphide-bearing lenses consists of 40-140 m wide continuous units of predominately fine to medium graphite flakes, containing approximately 4% TGC. The hanging wall and footwall is comprised of QFB-rich gneisses with common garnet porphyroblasts. The graphitic lenses are commonly intruded by pegmatite veins which vary in thickness from a few decimetres to tens of metres.

Drillhole information

Not relevant. Exploration results are not being reported.

Data aggregation methods

Not relevant. Exploration results are not being reported.

Relationship between mineralisation widths and intercept lengths

Not relevant. Exploration results are not being reported.

Diagrams

Appropriate diagrams contained in the report to which this Table 1 applies.

Balanced reporting

Not relevant. Exploration results are not being reported.

Other substantive exploration data

Previous metallurgical test results from surface grab samples at Aitolampi were announced on 25 January 2017. Regional-scale mapping has been carried out in the area to identify outcrop of graphitic material.

Previous metallurgical test results and market application tests from drill core samples at Aitolampi were announced on 30 January 2018 and 2 October 2017.

Geophysical data from the Geological Survey of Finland (GTK) regional airborne and helicopter borne electromagnetic, magnetic and radiometric surveys have been processed by Resource Potentials Pty Ltd to generate and identify targets. The GTK surveys highlighted anomalies over the Aitolampi area which were surveyed by Fennoscandian in more detail using ground-based frequency domain electromagnetic methods as summarised in the body of this report.

Further work

An Environmental and Social Impact Assessment Roadmap will be completed by Pöyry Finland Oy, followed by environmental and biodiversity baseline studies.

 



 

Section 3: Estimation and Reporting of Mineral Resources

Criteria

Commentary

Database integrity

Drilling data is electronically stored in a relational database, DataShed, that is managed by CSA Global.

Validation of the data import include checks for overlapping intervals, missing survey data, missing assay data, missing lithological data, and missing collars.

Assay files form the laboratory are directly imported into the database. All other files are provided by Fennoscandian in Excel format for import into the database.

Data used in the Mineral Resource estimate is sourced from csv files that were exported from the Datashed database for import into Datamine Studio RM software.

Site visits

A site visit to the Aitolampi Project was completed by CSA Global Principal Consultant, Mr Galen White between 21 and 23 May 2018. During the visit, ground truthing was completed over the project site as well as inspection of core processing facilities in Outokumpu, and visual inspection of core material at the Kaarina storage facility.

During the site visit the following activities were completed:

·   Walking the ground at Aitolampi, ground truthing, verification of drillhole collars chosen at random, and comparison of GPS coordinate data with data contained in the database. No issues were found. Graphitic schist was observed in outcrop.

·   Visit to the core processing facility in Outokumpu. This was not active at the time of the visit, but it is considered a good quality facility.

·   Visit to the core storage facility in Kaarina. Inspection of mineralised material intervals (graphite schist) and contacts (with hanging wall and footwall metasediments) for the six drillholes, representing the mineralised zones, on three profiles, and review of down-dip zones. Visual inspection made against logged geology and assay data. Mineralisation was confirmed and correlated with database intervals. No issues were detected.

Based on his observations, Mr White concluded that data collection and core processing has been to a good standard.

Geological interpretation

Based on surface geological mapping, drillhole logging and sample analysis data and geophysical (Slingram) anomaly extents data, the large-scale structure of the modelled graphitic schist lenses appears to form synclinal portions of larger fold structures within a hanging wall and footwall package of QFB gneiss. The northern end of the western lens appears to be terminated by folding while the southern end is constrained to a nominal 100 m extension past the last drilling section by a lack of drill data.

Surface mapping and geophysical anomalies do indicate that the lens continues southwards, but for the purposes of Mineral Resource estimation a sensible strike extent constraint was required. For the eastern lens (as for the southern extent of the western lens), the extents to the north and south are extended a nominal 100 m past the last drilling sections, which is within the confines of the surface mapping of the graphitic schist and the geophysical anomaly extents.

Drillhole logging has shown graphitic lenses and surrounding gneiss are intruded by pegmatite veins that vary from decimetre scale to tens of metres. The pegmatite has limited the graphite schist interpretation extents on some sections but was not found to be continuous or broad enough, on and along section, to require modelling of pegmatite depletion zones.

Drillhole logging data shows a barren overburden layer, presumed to be glacial till, of a few metres in average thickness which was not sampled. The overburden surface layer has been modelled over the full extent of the modelled area.

CSA Global did not note any significant oxidation or weathering zones based on the graphite and sulphur chemical analysis results and core photography, and hence no weathering surfaces have been generated

Surface mapping, drillhole intercept logging, sample analysis results and geophysical data have formed the basis of the geological and mineralisation interpretations. Assumptions have been made on the depth and strike extent of the mineralisation based on the drilling and geophysical data, as documented further on in this table.

The extents of the modelled mineralisation zones are constrained by available drill and geophysical data. Alternative interpretations are not expected to have a significant influence on the global Mineral Resource estimate.

The continuity of the geology and mineralisation can be identified and traced between drillholes by visual, geophysical and geochemical characteristics. The geology and mineral distribution of the system appears to be reasonably consistent though affected by folding and shearing. Confidence in the grade and geological continuity is reflected in the Mineral Resource classification.

Dimensions

The eastern lens of the modelled graphite schist mineralisation strikes approximately 130° to 310°, dipping on average about 50° towards 220°, with a modelled strike extent of approximately 525 m. The lens is on average roughly 35 m in true thickness and has been extended down dip, primarily based on the interpretation of a synclinal fold, to a maximum of roughly 60 m down dip past the deepest drill intersection. This depth equates to an approximate maximum depth below the topographic surface of 150 m. The extents of the lens to the north and south are extended a nominal 100 m past the last drilling sections, which is within the confines of the surface mapping of the graphitic schist and the geophysical anomaly extents.

The western lens of the modelled graphite schist mineralisation strikes approximately 140° to 320°, dipping on average about 50° towards 230°, with a modelled strike extent of approximately 530 m. The lens is on average roughly 65 m in true thickness and has been extended down dip, primarily based on the interpretation of a synclinal fold, to a maximum of roughly 80 m down dip past the deepest drill intersection. This depth equates to an approximate maximum depth below the topographic surface of 150 m. The northern end of this lens appears to be terminated by folding while the southern end is constrained to a nominal 100 m extension past the last drilling section, which is within the confines of the surface mapping of the graphitic schist and the geophysical anomaly extents.

Given the continuity defined over the drilled extents (drill section spacings of 50-100 m) and being additionally informed by the geophysical anomaly data and surface mapping of the graphite schist outcrop, these extrapolation extents are considered reasonable.

Estimation and modelling
techniques

The Mineral Resource estimate was completed in Datamine Studio RM software using the ordinary kriging (OK) estimation method, with an inverse distance weighting to the power of two (ID2) estimation method also completed for validation purposes. Estimations were completed for TGC, TC and TS. The western and eastern lenses are separately coded using a numeric mineralisation zone code. A detailed statistical analysis was completed for each of the grade variables estimated within each lens separately. This analysis showed that the coefficient of variation was generally low for all grade variables, and in the Competent Person's opinion, no balancing cuts were required to prevent estimation bias associated with outlier values.

Drill spacing is variable down dip on the drill sections spaced 50 m or 100 m apart. Maximum extrapolation away from data points is to 100 m along strike and up to 80 m down dip. Kriging neighbourhood analysis (KNA) was used in conjunction with the modelled variogram ranges and consideration of the drill coverage to inform the search parameters.

The variogram modelling considered the grade continuity trends observed in the drill data with the resultant modelling for each lens showing the direction of maximum continuity (major axis) dipping 33° towards 280°, with the semi-major axis dipping 27° towards 171°, and the minor axis 45° toward 050° for the western lens and 30° towards 284.7°, with the semi-major axis dipping 30° towards 175.3°, and the minor axis 45° toward 050° for the eastern lens.

Search ellipse orientation are set to match the modelled variogram directions. Search ellipse extents are set to 60 m (major axis), 60 m (semi-major axis) and 15 m (minor axis) for the western lens and 80 m (major axis), 60 m (semi-major axis) and 15 m (minor axis) for the eastern lens based on the results from the KNA. The search volume was doubled for the second search pass and increased tenfold for the third search pass to ensure all block were estimated.

Based on the KNA, a minimum of 12 and a maximum of 28 samples are allowed for a block estimate in the first and second search pass, reducing to a minimum of 8 samples and a maximum 16 samples for the final pass for the western lens. A minimum of 15 and a maximum of 27 samples are allowed for a block estimate in the first pass, reducing to a minimum of 12 samples and a maximum 21 samples for the second pass, and a minimum of 8 samples and a maximum 15 samples for the final pass for the eastern lens.

A maximum of six samples per drillhole was allowed with no octant-based searching being used.

TC and TS have also been estimated.

With reference to the drill spacing and the results from the KNA, a volume block model with parent block sizes of 20 m(N) x 20 m(E) x 4 m(RL) was constructed using Datamine Studio software. Minimum sub-cells down to 2 m(N) x 2 m(E) x 2 m(RL) were allowed for domain volume resolution.

No assumptions have been made regarding selective mining units at this stage.

The separate interpreted mineralisation lenses that have been domained based on the geological, geochemical and geophysical data, have been separately estimated using hard boundaries between the domains. The model is depleted by a surface overburden zone that is assumed to be barren, and which has been interpreted based on the geological drill logging data.

Block model validation has been completed by statistical comparison of drill sample grades with the OK and IDW check estimate results for the two separate lenses. Visual validation of grade trends along the drill sections was completed and trend plots comparing drill sample grades and model grades for northings, eastings and elevation were completed. These checks show reasonable comparison between estimated block grades and drill sample grades.

With no mining having taken place there is no reconciliation data available to test the model against.

Moisture

Tonnages have been estimated on a dry in situ basis.

Cut-off parameters

No lower grade cut-off for reporting has been used. The modelled mineralisation interpretation has been driven primarily by the geological logging of the graphite schist unit with a nominal lower cut-off of 3% TGC employed in some instances and hence all modelled mineralised material has been reported.

Mining factors or assumptions

It has been assumed that these deposits are amenable to open cut mining methods and are economic to exploit to the depths currently modelled. No assumptions regarding minimum mining widths and dilution have been made.

Metallurgical factors or assumptions

2017 testwork: Drill core composites were taken from holes drilled in 2017 across three parts of the deposit. 17001 is a series of short samples across both low and higher-grade mineralisation of the eastern domain, 17002 is from the higher-grade parts of the western domain, while 17003 is from the higher-grade intercepts in the lower part of the eastern domain.

Head sample analyses showed that graphitic carbon grades ranged from 4.60% TGC for sample 17003 to 6.47% TGC for sample 17002. Flotation testwork by SGS Canada demonstrated that approximately 10-20% of the liberated flakes were larger than 180 micron (100 mesh), approximately 30% were in the range 106-180 micron and approximately 50-60% were smaller than 106 micron and that final overall concentrate grades are in the range of approximately 96-98% carbon. Recoveries were in the range of 78-92%.

2019 testwork: About 470 kg of Aitolampi drill core mineralisation from 2017 and 2018 drill holes was delivered to the Geological Survey of Finland (GTK) in Outokumpu, during January 2019.

Feed analyses measured 6.2% C grade in the feed and the main elemental impurities were SiO2 (55.8%), AI2O3 (12.0%) and FeO (10.8%). Four size fractions of the feed were analysed by Mineral Liberation Analyzer (MLA) to obtain quantitative mineralogical data, and to indicate graphite liberation. The weight % values were obtained by combining the size fractions results and balancing them based on their respective weight proportion from the feed. The Graphite content of the feed was calculated to be 4.1%. The main gangue minerals are quartz (28.4%), feldspars (33.4%), pyrrhotite (16.7%), and phlogopite (7.0%).

A total of 350 kg of graphite mineralisation was processed in batches. The processing included initial crushing to -1.6mm, flash flotation, primary grind, secondary grind and three cleaner flotation stages. Separate two-stage polishing grind and cleaner flotation stages were done for three different size fractions: +180 micron; 180-75 micron; -75 micron.

The final (fifth cleaner) concentrate had an average purity of 94.7% TGC. Approximately 30% of the flakes were coarser than 180 microns, while approximately 15% of the flakes were finer than 75 microns.

The conventional flotation process produced flake graphite concentrates of acceptable quality, potentially for markets such as brake lining pads, lubrication, refractories and batteries. The available process testwork in conjunction with drill sample observations from the remainder of the deposit supports the classification of the Aitolampi deposit as an Industrial Mineral Resource in terms of the JORC Code, Clause 49.

Environmental factors or assumptions

Environment studies have started but the work has not been completed by Fennoscandian regarding waste disposal options. It is assumed that such disposal will not present a significant barrier to exploitation of the deposit and that any disposal and potential environmental impacts would be correctly managed as required under the regulatory permitting conditions.

CSA Global notes that a shallow lake exists at the southern end of the project area. A hydrological assessment has been recommended to assess the likely impact on mining.

Bulk density

Density measurements by weight in air, weight in water method have been completed for 767 samples across a range of material types from the drill core.

The density measurement result data has been separated by mineralisation type into eastern lens and western lens respectively, and waste rock. No density measurements have been obtained for the overburden material and hence the lowest measured waste rock density has been assigned to this domain. The means of the measured densities from the various domains have been applied to the appropriate domains in the block model as follows:

·   Eastern lens: 2.82 t/m3

·   Western lens: 2.80 t/m3

·   Waste rock: 2.75 t/m3

·   Overburden: 2.6 t/m3.

Classification

Classification of the Mineral Resource has accounted for the level of geological understanding of the deposit, quantity, quality and reliability of sampling data, assumptions of continuity and drillhole spacing.

The Mineral Resource estimate has been classified in accordance with the JORC Code (2012 Edition) using a qualitative approach. All factors that have been considered have been adequately communicated in Section 1 and Section 3 of this table.

The Mineral Resource is classified as an Indicated Mineral Resource for those volumes where in the Competent Person's opinion there is adequately detailed and reliable, geological and sampling evidence, which are sufficient to assume geological and mineralisation continuity.

The Mineral Resource is classified as an Inferred Mineral Resource where the model volumes are, in the Competent Person's opinion, considered to have more limited geological and sampling evidence, which are sufficient to imply but not verify geological and mineralisation continuity.

The volumes located within the exclusion zone were not classified.

The Mineral Resource estimate appropriately reflects the view of the Competent Person.

Audits or reviews

Internal audits and peer review were completed by CSA Global which verified and considered the technical inputs, methodology, parameters and results of the estimate. No external audits have been undertaken.

Discussion of relative accuracy/confidence

The relative accuracy of the Mineral Resource estimate is reflected in the reporting of the Mineral Resource as per the guidelines of the JORC Code (2012 Edition).

The Mineral Resource statement relates to global estimates of in situ tonnes and grade.

No mining has taken place at this deposit to allow reconciliation with production data.

 

 

 

 


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