KIRUNA, SWEDEN — Eurasian Minerals (TSXV: EMX; NYSE-MKT: EMXX) is a prospect generator. The company takes its prime assets — deep geological expertise and skill navigating difficult socio-political settings — to underexplored areas, where it sets up shop, picks up ground with geological potential, and finds partners to move its projects forward.
Since the system starts with finding underexplored terrain, Eurasian has worked in challenging jurisdictions the world over. For example, Eurasian was the first exploration company to enter the Balkans after that region’s terrible war, has a set of highly prospective properties in Haiti and was an early mover into Turkey, now an exploration hotspot, but then recovering from years of coups and insurgencies.
Sometimes, though, an area doesn’t have to have seen warfare, debilitating poverty or sectarian strife to be underexplored.
Sweden opened its doors to international explorers in the early 1990s. Until then, only domestic companies and the Geological Survey of Sweden (SGU) had explored the country for mineral wealth. They did well: Sweden has long been a major iron-ore miner, and has produced notable copper, zinc and lead. But the lack of international competition meant exploration was more limited than it might have been.
An iron-ore company might stumble across a copper anomaly, drill a few holes, define a small resource and move on. The SGU would probe a copper–gold prospect, and then focus on discoveries being made elsewhere. The veneer of glacial till that blankets Sweden further hindered exploration efforts.
The result was a country sprinkled with interesting occurrences and small resources, after decades of exploration that was broad but not deep. One domestic explorer, Boliden (TSX: BLS; US-OTC: BDNNF), has been successful, but the playing field was limited. Then the world was invited in.
“A lot of majors came and had a look at things, but no one solved the dilemma of the glacial cover,” said Eric Jensen, Eurasian’s global manager of exploration. “When initial efforts by foreign majors did not lead to major successes, things kind of died down.”
Eurasian entered Sweden a few years later, in 2008. The Swedish impetus came from Duncan Large, Eurasian’s chief technical advisor for Europe and Asia, who saw potential in the country’s limited exploration history.
“We were able to walk in and pick up a number of interesting properties just by staking,” Jensen said. “At the same time several other companies said: ‘Let’s go to Sweden,’ so there was a bit of an acquisition rush.”
The rush has since died down, for the same reason mineral exploration spending is down around the world: lack of funds.
“The drill-and-build approach that others used has run its course,” Jensen said. “They’re mostly broke. We’ve weathered the market downturn here because we covered a large part of our operating costs through our partnership with Antofagasta.”
Eurasian’s business model is to find project partners as soon as possible, so that costs and risks — as well as successes — are shared. In Sweden, for the first two years Eurasian’s partner was Antofagasta (LSE: ANTO; US-OTC: ANFGY).
Eurasian and Antofagasta had two deals: a joint-venture agreement and a regional exploration alliance. The joint venture deal let Antofagasta choose designated projects (DPs) from Eurasian’s portfolio. Once chosen, the major could earn 50% of a project through certain expenditures, then boost its stake to 70% with further work. The regional alliance saw Antofagasta provide Eurasian with a small pool of capital to explore for new projects, which Antofagasta was given the chance to choose as DPs.
Antofagasta chose three DPs. Two, called Kiruna South and Norrmyran, were in the northern district of Norrbotten; the third, Iekelvare, is in the central Skelleftea district. With Eurasian doing the work, Antofagasta spent $4.5 million over two years exploring those land packages.
Norrmyran did not pan out, and has since been dropped. The other areas returned encouraging indications of iron oxide copper gold (IOCG) or volcanogenic massive sulphide (VMS) mineralization, but no clear indications of large-scale porphyry potential, which is what copper-focused Antofagasta seeks. As such the major is likely stepping away from Eurasian’s projects in Sweden.
That is not necessarily a bad thing. Eurasian operates on partnerships and structures its deals such that a partner’s early stage withdrawal returns full ownership to Eurasian.
Eurasian has properties in Sweden with clear targets defined by millions of exploration dollars — a good part of which were provided by partner funding. Now the challenge is to find new project partners to fund the next stages of work.
Antofagasta’s exit is also giving Eurasian new latitude in Sweden.
“Our focus until recently was really on our partnership with Antofagasta,” Jensen said. “With them we were looking for big porphyry-type systems. Now that we’re not committed to that focus we’re stepping out to look at other things, which is exciting.”
Sweden’s mining centres
There are three main mining regions in the long, narrow nation of Sweden. Norrbotten County in northern Sweden is famous for its iron-ore and copper mines. Included in that famous list are Kiirunavaara, the world’s largest underground iron-ore mine, and the Aitik mine, one of Europe’s largest open-pit copper mines.
Roughly 200 km south is the Skelleftea district, an area littered with sulphide mineralization but also sprinkled with epithermal and oxide precious-metal occurrences. The area has three operating zinc mines and two gold mines, plus many historic operations.
Sweden’s most historic mining district sits another 500 km south. The Bergslagen district rings Stockholm to the west, and it makes sense that Bergslagen is near the nation’s capital, because the district’s mines get considerable credit for Sweden’s global clout.
The Falun mine in Bergslagen operated for a millennium, from the 10th century until 1992. Now a UNESCO World Heritage Site, in its 16th and 17th century heydays it fuelled most of Europe’s copper needs and funded most of Sweden’s wars. Other smaller mines in the area produced significant amounts of silver and zinc.
One of the first projects Eurasian picked up in Sweden was Sakkek-Pikkujarvi, a 70 sq. km land package some 45 km southwest of Kiruna. The property saw extensive historic exploration work, including airborne and ground geophysics, base-of-till drilling, geochemistry and drilling. From that work the SGU defined an historic resource of 11.4 million tonnes grading 0.43% copper.
However, Jensen and Eurasian’s Sweden exploration manager, Peter Mitchell, think the resource is just the beginning.
“This is something you encounter all over Sweden — a lot of what we call ‘pincushion drilling,’” Jensen says. “They would identify a prospect and pin it with tightly spaced holes, not stepping out far along trend or testing other potential structures. A lot of drilling was also quite shallow. When one hole ran into lower grades they would stop and say: ‘This is what is here.’ It left behind a lot of upside in many locati
For example, at Sakkek-Pikkujarvi several holes showed grades increasing with depth, but no deep holes were drilled.
Despite all the exploration work, the area’s thick glacial cover prevented the SGU from creating a clear geological map. That was Eurasian’s first order of business, a task it accomplished via top-of-bedrock drilling. Funding for the work came from Antofagasta because Sakkek-Pikkujarvi was part of the Kiruna South DP.
The work outlined two adjacent granitic intrusions, each ringed by magnetic anomalies. The historic resource is completely within the western side of the western magnetic halo, and the potential for expansion along the halo is compelling.
More compelling, though, was the intersection of the two rings. A historic hole in that area returned 0.21% copper and 0.056 gram gold over 55 metres — but it ended in almost 2% copper.
Eurasian drilled seven holes into the target. All were strongly altered from top to bottom and five hit into copper–gold mineralization, returning such intercepts as 60.5 metres grading 0.24% copper and 0.11 gram gold, and 147.3 metres of 0.17% copper and 0.1 gram gold.
That ring intersection is now Eurasian’s key target on the property. Importantly, the mineralization there is hosted by hydrothermal breccias that crosscut stratigraphy, the sources of which have yet to be discovered.
“I’ve always liked this project because we really don’t know what the mineralization is related to,” Mitchell said. “Is what we’re seeing the fingers coming off of something really significant? There’s quite the negligee effect going on.”
Puoltsa, a Y-shaped property some 25 km north of Sakkek-Pikkujarvi, is another good example of the opportunities that exist in Sweden.
There are three main targets at Puoltsa, two near the middle of the property. At both Ailatisvaara and Gunilla, outcrop and top-of-bedrock samples show widespread alteration consistent with an IOCG system.
In particular, reliable correlation between magnetite and sulphide suggests the rocks came from the deeper part of an IOCG — and a copper–gold-mineralized IOCG system at that. Outcrop samples from Puoltsa have returned grades as high as 5% copper.
Three historic holes at Ailatisvaara each returned 150 metres carrying 0.1–0.2% copper. However, none probed beyond 120 metres depth and, even though all three ended in higher-grade mineralization, no deeper drilling was ever done.
Those intercepts showed that induced polarization (IP) is good at highlighting copper mineralization at Puoltsa. Last winter Eurasian punched a few holes into Ailatisvaara. Each returned 200 metres carrying 0.15% copper. However, a steep snowy hill prevented the team from collaring where they wanted — in the heart of a strong IP anomaly. That is where Mitchell is keen to take a drill next.
At Gunilla, a geochemical copper anomaly measuring 600 by 150 metres corresponds with the magnetite ring around a granitic intrusion. In a mirror of Sakkek-Pikkujarvi, the key area of interest at Gunilla is that magnetite halo.
“When I went there one day I didn’t find overwhelming amounts of copper, but every rock that I broke open had chalcopyrite in it,” Mitchell said. “That’s just really unusual, that kind of consistency.”
Eurasian completed 37 top-of-bedrock holes at Gunilla in mid-2013. The best samples graded better than 0.5% copper — and came from the alteration halo. Next step: drilling.
The third target at Puoltsa is also a granitic intrusion with an enticing ring and associated magnetic high. Throughout the area, similar magnetic rings contain magnetite–actinolite–scapolite alteration with copper mineralization.
If the concept at Puoltsa is IOCG, the property is in the right neighbourhood. There are three good sized and well-mineralized IOCG deposits within a 10 km radius of Puoltsa.
“This project is essentially a boulder field,” said Jensen at Eurasian’s Iekelvare project in central Sweden, near the town of Jokkmokk. “These are outrageously high-grade boulders. The question is, how did they get here and where did they come from?”
Dubbed “dog boulders” because the SGU found them using dogs trained to sniff out sulphide mineralization, they are chunks of IOCG-rich mineralization. Samples from 25 boulders graded on average 3.6% copper, 0.85 gram gold and 36.95 grams silver. One of the highest-grade boulders assayed 18% copper, 0.157 gram gold and 134 grams silver.
Those grades are certain to attract attention, and indeed Phelps Dodge and the SGU took turns exploring Iekelvare. Both drilled the boulder field and pulled some interesting results, such as 110 metres of 0.72% copper equivalent.
It was, however, an odd decision to drill right into the boulder field. Boulders don’t generally rise up out of the ground, especially large boulders in an area that was glaciated.
The ice moved southeast across what is now Puoltsa. The area northwest — or up ice — from the boulder field remains untested. It is also host to a copper-in-soil anomaly.
In addition, Eurasian completed base-of-till and top-of-bedrock drilling. The results showed coincident copper, zinc and molybdenum anomalies, which suggests the glacial till has not been displaced since the receding glacier deposited it.
“Previous companies drilled near the boulders and no one found the source, so it’s likely farther up the ice flow direction,” Jensen said. “There is a copper anomaly and the right kind of alteration up there. So the next step is to run an electromagnetic (EM) survey, because we expect this kind of mineralization will show up nicely on EM. If there’s a signature you drill it.”
Storasen is another Eurasian property in central Sweden, this time on the western side of the country. The 56 sq. km property covers a geological window through the nappes of younger sedimentary rocks to the metamorphosed mafic volcanics below.
Those mafic volcanics show disseminated, web-textured and vein-controlled copper sulphides, gold and platinum group elements. The showings enticed the SGU and a Canadian junior named Poplar Resources to drill at Storasen in the 1990s and early 2000s, which culminated in a historic resource of 5.3 million tonnes grading 0.474% copper, 0.179 gram gold and 0.279 gram palladium.
The resource defined by Poplar was typical of many in Sweden: it came from some 40 shallow holes — none deeper than 160 metres — drilled in disparate campaigns over 20-odd years that ignored “obvious geologic controls,” according to Jensen.
The resource is in an area known as the Central zone, which also hosts a prominent copper-in-soil anomaly. The deposit has room to grow, at depth and laterally. The lateral potential is particularly intriguing.
In an attempt to show the limits of the deposit, the SGU drilled two lines of base-of-till samples. One line cut straight across the middle of the deposit southwest to northwest and the results outline the mineralization perfectly, proving the technique’s efficacy. Samples from the second line, drilled parallel almost 2 km to the northwest, were generally immaterial — all except one, the northernmost sample, which carried more than 400 parts per million copper.
Given how reliably the base-of-till samples outlined the known deposit, Mitchell thinks the highly anomalous
hit to the northwest deserves a follow-up. Adding to the intrigue at Storasen, as at Iekelvare the property is littered with high-grade boulders. The boulders at Storasen have returned assays as high as 7.73% copper, 9.45 grams palladium and 2.4 grams gold.
“This boulder cluster from the Bell zone is really remarkable,” Jensen said. “The rocks are just laced with chalcopyrite.”
The boulders stretch out northwest–southeast, aligned with the dominant ice flow direction. There’s a bit of a twist to that tale, however: at Storasen the ice moved southeast, but some glaciologists believe the flows at Storasen reversed in their final stages.
As such it is likely the boulders came from the southeast, rather than from the northwest. Supporting the concept of northwest transport, an SGU base-of-till sampling program outlined a copper anomaly the same shape and size as the Central zone resource, spatially offset 1 km northwest.
And unlike at Iekelvare, where the boulders are mineralogically disparate from the bedrock, the Storasen boulders match the bedrock lithologies in what Jensen describes as “clear evidence of local derivation.”
There are boulders and a soil anomaly 1 km northwest of the Central zone resource. The boulders at the Bell zone are more mineralized and show evidence of local derivation — yet there has been no drilling southeast of that zone, an area Eurasian has now dubbed an “obvious exploration target.”
When Eurasian’s two-year regional alliance with Antofagasta expired, the company found itself free to pursue prospects outside of the copper porphyry paradigm. Gumsberg was one of the first results of that expanded perspective.
Located 200 km northwest of Stockholm, Gumsberg hosts seven historic mines: four copper, two lead–zinc and one silver. Those mines lie along two parallel northeast–southwest trends: the copper prospects define the northern Gumsgruven trend while the lead–zinc and silver targets define the southern Vallberget trend.
Because the area is famous for its silver, lead and zinc — the Ostrasilverberg mine flourished in the 15th century — the Gumsgruven copper trend has seen far less exploration than the Vallberget silver–lead–zinc trend.
At Gumsgruven, outcrops show massive sulphide breccias with chalcopyrite and pyrrhotite. The lineation suggests intense folding, creating potential for repeated pods of mineralization.
To the south Eurasian’s geologists have again mapped massive sulphides, though the sulphides along the Vallberget trend offer sphalerite, galena, pyrrhotite and scheelite. That zonation — more sphalerite in the south, more chalcopyrite in the north — suggests a textbook VMS system on its side.
The historic mines at Gumsberg are small but the shafts run deep, as much as 60 metres. The fact that miners chased high-grade mineralization along near vertical structures is a positive, according to Jensen.
“The mineralization that has been found here is basically vertical,” he said. “That’s significant because it’s a perfect geology for mining. Prospecting is more difficult, though, because it means the smallest footprint of exposure.”
That being said, there are some pretty clear indications of high-grade mineralization. Samples from the dump piles beside each historic pit regularly run better than 3% copper and 0.5 gram gold. Mineralization is apparent in many a rock picked off the ground. And while the shafts are deep considering historic mining techniques, they are shallow on today’s scales.
“The obvious thing to do is to set-up a drill and drill 100 or 200 metres below these pits,” Jensen said. “When you look at the dump material and it’s full of high-grade copper and zinc — you’ve eliminated a lot of risk here.”
Gumsberg is certainly in esteemed company. The Falun mine located 30 km to the north was the world’s number-one copper producer in the 16th century and is etimated to have produced 28 million tonnes grading 6% zinc, 2% lead, 0.5% copper, 50 grams silver and 0.4 gram gold over its millennium of operation, from podlike lenses of massive sulphide mineralization.
Another nod to the region’s mineral potential sits 50 km east. The Garpenberg mine is Sweden’s oldest active mine, in production since the 13th century. Owner Boliden is expanding the operation, which still sits on a resource totalling 13.2 million tonnes of 5% zinc, 4% lead, 0.4% copper, 130 grams silver and 0.9 gram gold.
There are few, if any, places in the world where everyone embraces mining. Most Swedes accept mining as an integral part of their country. That majority, however, does not include Sweden’s indigenous people.
The Sami and their reindeer have been in Sweden longer than any Swedes. Today there are 20,000 Sami left in Sweden, though only 3,000 still depend on reindeer for their livelihoods.
Those that do mostly live in the northern half of the country. That means anyone exploring in the Norrbatten or Skelleftea districts needs to develop a relationship with the Sami. That can be difficult, because the Sami are distrustful of the Swedish government and have even less faith in the rush of explorers who showed up in recent years.
“Even though mining impacts only a small footprint relative to the size of the country, the issue is that each of these indigenous communities has a relatively narrow strip of land, typically just 10 to 20 km wide, in which to migrate their reindeer,” Jensen said. “The whole country is divided into these narrow reindeer corridors, so the worry is that a mine could easily narrow or cut off one of these corridors. So they have legitimate concerns.”
The Sami’s concerns are certainly legitimate, but they are not legal. The Sami have no official rights to their lands — no title, no control over resources, no right to allow or deny development. Groups wanting to work on Sami lands are required to consult the local Sami group, but the Sami have no way to stop a government-sanctioned project, other than by physical protest.
That is precisely what happened at Beowulf Mining’s (LSE: BEM) Kallak project. With a government exploration permit in hand, Beowulf headed to Kallak to start exploring. The local Sami, however, believe there is no way to explore — let alone develop a mine — at Kallak without seriously disrupting their reindeer migration. The result was protests, arguments and general contention.
It only took a few such confrontations for Sweden’s Sami to become apprehensive towards every mineral explorer wanting to work in their neighbourhood.
“The hard thing for us was that we had developed good relations with several of these groups, and overnight everything changed because of factors outside of our control,” Jensen said. “Nonetheless we have to manage it. From our perspective, dismissing this as something Sweden and the Sami have to solve is a short-sighted approach.”
The underlying problem is that the Swedish government is not consulting the Sami when it makes exploration-and-development permitting decisions.
“The issue is that once the government grants a licence and you have a work permit, you have the right to go in and do it,” Mitchell said.
“The indigenous people believe this is their land,” Jensen added. &l
dquo;Instead of feeling like they have a voice in these decisions, the Sami feel completely disenfranchised right now.”
Eurasian is tackling the situation head-on. Half of the people who work for Eurasian in Sweden are Sami, and Mitchell spends a lot of time talking with Sami communities at each project about what the company is doing, and asking what Eurasian can do to help.
The effort is paying off. At the same time protesters were blocking Beowulf from entering its Kallak project, Eurasian was drilling without problem at its adjacent Iekelvare project. When The Northern Miner visited Sweden, Eurasian arranged a lunch with local Sami leader Mats Berg.
Given the option, Berg would ban all further mining development in Sweden. However, he knows that is not a realistic option because the world needs minerals and Sweden has good deposits.
“The first thing to do is to decide the rules,” Berg said. “We need to have the right to say no, because if we have the right to say no, we also have the right to say yes.”
For Berg, the path to a solution starts with Sweden adopting United Nations Convention 169. Known as the Indigenous and Tribal Peoples Convention and promoted by the UN’s International Labour Organization, the convention recognizes indigenous peoples’ right to self-determination within a nation-state and sets standards for national governments regarding indigenous peoples’ economic, socio-cultural and political rights, including the right to a land base.
The convention is law within nations that have adopted it. Canada has, along with the U.S. and 19 other nations. Sweden has not, despite 23 years of petitioning from the Sami.
Until then, the Sami’s continuing feeling of disenfranchisement will keep tensions high for any company that fails to make reindeer management a key aspect of exploring in northern Sweden.
How to explore in Sweden
Sweden is covered in glacial till, a 5- to 40-metre thick blanket that obscures bedrock and interferes with geophysics. In addition, the country is laced with bogs and lakes that make moving around difficult.
For Eurasian, the answer has been top-of-bedrock drilling. As is the company’s style, once Eurasian had a year of experience under its belt costs came way down.
“Our first survey cost us about $1,200 a hole,” Mitchell said. “Now we’re down to $680 a hole, and I think we can trim it even more. For comparison, it costs about $250 to collect a rock sample, by the time you pay salaries and mobilize and all that, so top-of-bedrock is really economic and gives so much more information.”
Top-of-bedrock drilling is not only economic — it is also environmental and efficient. The 14-tonne rig leaves little trace of its work and at Iekelvare, for example, was able to complete 223 holes in 28 days.
“It really is light on its feet,” Mitchell said. “For something that big we are really able to do remarkably little environmental damage.”
The SGU is another ally for prospectors in Sweden. Like most national geology centres, the SGU has an immense database of maps, exploration results and property histories. What makes the SGU stand out, though, is its core-storage facility.
The core warehouse contains more than 4 million metres of core from more than 17,000 holes drilled all over Sweden, all labelled and available for viewing. There is also proprietary core in the facility, including Eurasian’s drill core, because companies are encouraged to keep their core there. It’s a win-win: Eurasian doesn’t have to build a large core-storage facility of its own, and the SGU knows it will get to keep Eurasian’s core once the company is done with it.
“This is quite the facility, quite the archive — there’s core here from the 1800s,” Jensen said.
Mining is certainly a big, historic business in this country. However, that doesn’t mean every outcrop in Sweden has been assessed. Far from it.