By Karan Kumar – Exclusive to Gold Investing News
Nordic Mines AB plans to reach full production capacity at its Laiva mine in Finland before the end of 2011, the company announced last month. The Laiva mine contains some of the largest gold reserves in the Nordic region. Finland is an up and coming player in the gold mining sector, which is dominated by China, the United States, Australia, Russia and South Africa.
In October, Finland said it would speed up mining permit applications with the Economy Minister Jyri Haekaemies stating the ministry has given the Finnish Safety and Chemicals Agency funds to triple the number of officials processing the applications.
“I’m really satisfied to be able to report that we’re about to start gold extraction at the Laiva mine. After over two months’ work on commissioning and fine-tuning the concentration plant and subsequent production processes, most of the plant is now operational. Our goal is to achieve full production capacity at the Laiva mine before year-end,” Nordic Mines’ Chief Executive Officer Michael Nilsson said. He added that just six years after Nordic Mines started exploration at the Laiva mine in Finland, most of the processing plant is now operational.
High-grade gold in Finland
While Finland arrived late on the world stage of gold mining, it holds promise and already many mining companies are investing in the country to look for gold. In May of this year, Finland announced a highly promising gold deposit in Petäjäselkä near Kittilä in Finnish Lapland during test drilling by the Geological Survey of Finland (GTK). Some of the test samples have contained as much as 28 grams of gold per ton, according to Risto Pietilä, director of the GTK unit in Rovaniemi. The usual gold content in the mines in Lapland is about 4 grams per ton.
The GTK says that Finland currently has five gold mines but believes that their number will increase in the future as about 200 gold deposits have already been test-drilled around the country. Lapland has the most promising. Kittilä already has one operating gold mine owned by Canadian-based mining company Agnico-Eagle (TSX:AEM), which extracted and enriched about 5,000 kg of gold from its Kittilä mine, which is the largest mine in the Nordic countries. With the price of gold at its highest for 50 years, the new discovery is certain to attract interest from international mining companies.
According to Finland’s Ministry of Employment and the Economy, mining production has doubled over the past decade and the growth has been especially fast in recent years. In 2010 Finnish mines set a new production record reaching a total of 70 million tons. Base metal mine, Talvivaara, in eastern Finland and gold mine, Suurikuusikko, in Finnish Lapland have contributed significantly to this growth.
Nordic Mines’ current gold exploration projects in Finland also include Oltava, Tormua and Kumiseva. The company said in its third-quarter earnings release that the gold deposits in Laiva are have an ore reserve of 12.9 million tonnes and a gold content of 1.85 grams per tonne. Once fully operational, the mine is expected to yield 118,000 ounces or around 3,700 kg of gold per year.
Mining in Finland
Other miners also have gold mining interests in Finland. Canada’s Northland Resources (TSX:NAU,FWB:NPK) is developing its 100 percent owned Hannukainen iron oxide-copper-gold project in the Kolari district of Northern Finland. Australia’s Dragon Mining (ASX:DRA) owns the Jokisivu and Orivesi gold mines in Finland and the Vammala production centre, in close proximity of the gold mines. The company is exploring and investing more in the region. Dragon Mining said on December 6 that receipt of all results from the Phase 5 drilling campaign undertaken on the Juomasuo deposit at the Kuusamo Gold Project in Northern Finland were encouraging. An analysis showed gold intercepts including 5.65 meters at 16.56 grams a ton.
Gold futures for February delivery fell to $1,577 an ounce on December 15, with prices dropping nearly 8 percent in the previous three days. While some analysts warn that gold prices may tumble to $1,400 soon, the metal is still up more than 75 percent since the end of 2008. Gold prices have climbed 11 percent in 2011, heading for an 11th straight annual gain, as investors sought a haven amid prospects of stagnating global growth.
Securities Disclosure: I, Karan Kumar, hold no direct interest in the companies mentioned in this article.