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DAILY NEWS Oct 31, 2012 5:22 PM - 0 comments

Finland's next one?

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2012-10-31

Taranis Resources (TRO-V) thinks it’s about time a junior mining company hit the big time in Northern Finland’s world class Kittila copper and gold district.

The region has already played home to the mining success of bigger boys like Agnico Eagle (AEM-T, AEM-N), Anglo American (AAL-L) and First Quantum (FM-T, FQM-L). And the country itself was recently ranked as the second best mining jurisdiction in the world by the Fraser Institute.

For John Gardiner, Taranis’ chief executive, the time is ripe for the emergence of juniors on Finnish soil.

“We’ve been there for over 10 years, we were one of the first juniors there,” he said, “and we’ve seen the country go from zero to a hundred miles an hour in terms of mining over that time.”

So why hasn’t there been a big junior success story in the region yet?

Gardiner explains that the country was closed-off to foreign ownership prior to 2000, a situation that also meant that not a single airborne geophysical survey had been flown over the country until that point.

“Outokumpo had everything back then,” he said. “It was the exploration arm of the government but after 1999 it decided to focus mainly on chromite so it got out of everything and its exploration properties went back to the government.”

Since then it’s been a series of fits and starts for the junior industry.

Initially looking to spur on foreign direct investment the government of Finland turned to the Canadian model. But by the time its policies were in place, markets were hit by the crash of 2008 and investment dried up.

Subsequent to that there have been major changes in the mining law, as the government, frustrated with companies sitting idle on land, decided to screen out the laggards by making the drill permitting process excruciatingly drawn out. Whereas before it could take two weeks to get the required permit, it can now take up to three years.

But Gardiner says Taranis has a competitive advantage when dealing with such bureaucratic issues by virtue of is first mover status in the country.

The company’s initial foray came by way of its acquisition of the Kettukuusikko deposit from a government auction.

Since then, it has continued to add to its land position and now is the dominant junior in the same district that holds First Quantum’s Kevitisa copper mine, Anglo American’s Sakatti project and Agnico-Eagle’s Kittila Gold Mine.

Taranis’ Kittila copper gold project, roughly 76 sq km of land, sits only 10-km to the southwest of Agnico’s producing gold mine.

And while such a large swath of prospective land hosts numerous areas of interest, the company’s current flagship is the Naakenavaara property.

Mineralization at Naakenavaara was originally discovered by Outokumpo, but when the major found copper grades in the 0.5% range, it deemed it too low grade to bother with and walked away without even assaying for gold

The company did leave behind core from 76 holes, however, and when Taranis had it re-assayed for gold it found that the yellow metal was there, and that the area could be broken out into two areas of mineralization.

The first is a low grade bulk minable zone that is related to a widespread flat lying unit called the black schist, that grades roughly 0.5% copper equivalent and is an average of 20 metres thick.

The second is a higher grade portion of black schist that occurs along the southeast side of the area where Outokumpo drills are focused, in a zone known as, Bulls Eye. The higher grade zone is only 2.5 metres on average but has zones with 2.45% copper equivalent and would be mined via underground methods.

But while Outokumpo focused on the 2-sq km Bulls Eye area, Taranis believes there is the potential to expand the lower grade bulk minable zone over roughly 10 sq. km in the syncline area.

“Historic drilling did find copper and gold roughly 2-km to the southwest of Bulls Eye, and along the same stratigraphic contact,” Gardiner said, “but the rest of the syncline has not seen any drilling.”

Taranis has done ground and airborne geophysical studies that show the same horizon extending through the remainder of the syncline. But to take the property to the next level will require a significant amount of capital.

Even just moving the Bulls-Eye target into a compliant Measure and Indicated Resource would require more than another 100 holes in addition to the 38 holes already drilled by Taranis in the area.

“It’s a huge asset in a little company,” Gardiner explains. “A lot of juniors are focused on smaller areas, but we choose to go after the big company type target.”

Now it needs to fund it. The large amount of capital needed to meet such ambitions currently outstrips Taranis’ means, so it will either have to form a joint venture (JV) with a major or find a large fund that believes in the project and is willing to invest on a large scale.

While there are other juniors in a similar position, Gardiner feels bolstered by not only the project’s scale but also its address.

“Finland wants to see a junior succeed,” he said. “They’ve already had Anglo, Agnico and First Quantum succeed, and in five to six months we’ll be out there drilling and trying to become the next one.”



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