The Orivesi Gold Mine (“Orivesi”) is located 180 kilometres north of Helsinki, immediately to the west of the Orivesi township in the Pirkanmaa Region in southern Finland.
The mine was initially in production between 1994 and 2003, resuming operations in 2007. During these two periods, Orivesi has produced in excess of 500,000 ounces of gold in concentrate, with ore processed through the Vammala Plant, 80 kilometres to the southwest.
Orivesi occurs within the Proterozoic Tampere Schist Belt and represents a metamorphosed palaeo-epithermal deposit. Gold mineralization is found in vertical pipe-like lode systems that are located in a broad zone of hydrothermally altered rocks that extends over an area of 50 hectares. The lode systems display depth extensions ranging from tens to hundreds of metres.
As early as the 1940’s mining activities were carried out on the present-day mine site, when sericite was quarried for use in ceramic insulators and other items.
The Orivesi gold deposit was discovered in 1982, as a result of a research project by Lohja Oy and the Department of Geology from the University of Helsinki. Outokumpu Oy ("Outokumpu") purchased the rights to the gold deposit in 1990 and conducted technical and feasibility studies over the next four years, including test mining in 1990 and 1993. Orivesi was officially opened in 1994 and Outokumpu continued operations until the sale of the mine to Dragon Mining in late 2003. Dragon Mining recommenced mining in 2007.
Orivesi was initially in operation between 1992 and 2003 producing 422,000 ounces of gold from a series of near vertical pipe-like lodes at Kutema down to the 720m level. Dragon Mining acquired the operation in late 2003 and recommenced mining in July 2007 initially on remnant mineralisation associated with the Kutema lode system above the 720m level. Two of the five principal lodes at Kutema continued below the historical extent of the decline at the 720m level and this area has been the subject of a program of staged development and production stoping down to the 1205m level since January 2011. Mining from the Sarvisuo lodes, 300 metres east of Kutema commenced in April 2008 and has been conducted from the 240m to the 620m level. The main decline is now at the 1205m level at Kutema, whilst gold mineralization has been identified down to at least the 1300m level.
Orivesi Gold Mine
The Proved and Probable Ore Reserve at Orivesi totals 46,000 tonnes @ 5.3 g/t gold for 7,900 ounces as at 31 December 2016. The Ore Reserves are based on the Mineral Resource estimates as at 31 December 2016. In addition to site specific mining, metallurgical, cost and revenue factors, the reserve estimates used a gold price of US$1,260 per ounce and a USD:EUR exchange rate of 1.13.
The Measured, Indicated and Inferred Mineral Resources for Orivesi as at 31 December 2016 and a reporting cut-off grade of 3.85 g/t gold are 157,000 tonnes @ 7.3 g/t gold for 37,000 ounces. The Mineral Resource represents material from the Kutema lode system below the 720m level and the Sarvisuo lode system and is inclusive of Ore Reserves.
For further information on the Ore Reserves and Mineral Resources for the Orivesi Gold Mine refer to the Reserves and Resources page.
Orivesi operates under an Environmental Permit granted in 2006. Dragon Mining applied to the Regional State Administration agency of Western and Inner Finland (“AVI”) for an extension of the permit in 2010. This application was rejected by the AVI in December 2015.
On the basis that Dragon Mining has made significant improvements to the water quality at Orivesi since the application was submitted, the Company lodged its appeal against the decision by the AVI. The appeal included relevant arguments supported by an updated waste management plan, the latest fish inventory report and a description of water management improvements.
The AVI’s decision to not extend the permit has also been appealed by the Centre for Economic Development, Transport and the Environment (“ELY Centre”), and on 21 March 2016 the Company submitted its reply in response to the appeal from the ELY Centre. In the next phase of the appeals process, the Company will give its reply to all concerned party statements and opinions that are expected to be received as a result of the Company’s and the ELY Centre’s appeals.
The ruling by the AVI is not binding until the appeals have been processed by the courts, until then Orivesi can operate under its current permit.
The Company maintains a contiguous tenement holding at Orivesi covering 148.50 hectares. It fully encompasses the hydrothermally altered domain that hosts the two known lode systems, Kutema and Sarvisuo.
Underground diamond core drilling at Orivesi continued with programs targetting the extensions of the Kutema lode system between the 1,200m and 1,280m levels. These programs returned a series of significant intercepts including the robust 15.00 metres @ 16.86 g/t gold. They have confirmed that the Kutema lode system extends at depth and remains open.
Aseries of diamond core drilling campaigns from the surface have recently been carried out to evaluate the upper extensions of Sarvisuo lode system and other near surface targets in the Sarvisuo West area. These campaigns have returned a series of significant intercepts including the high grade 4.80 metres @ 23.89 g/t gold, 18.00 metres @ 18.05 g/t gold, 2.00 metres @ 37.40 g/t gold, 5.00 metres @ 17.07 g/t gold, 3.50 metres @ 39.02 g/t gold, 2.40 metres @ 259.11 g/t gold, 4.10 metres @ 62.26 g/t gold, 6.00 metres @ 19.74 g/t gold and 1.50 metres @ 34.00 g/t gold.
These results are encouraging, having identified new zones of near surface gold mineralisation in both the Sarvisuo and Sarvisuo West areas. Drilling has also provided additional technical information to allow the updating of the geological model in readiness for future resource estimation and mining studies. Given the tenor of the results from the completed campaigns and the lower costs of mining at these shallow depths, the Company plans to carry out an internal study into the development of the upper Sarvisuo area in the near term.
Potential also remains within the hydrothermally altered domain surrounding the Kutema and Sarvisuo lode systems for the discovery of new gold bearing pipes or pipe clusters. Exploration activities conducted within the domain have returned a number of promising gold intercepts..