EXPLORATION 1998 — Mineral exploration on rise in Sweden

For Swedish mining and exploration, 1997 will be remembered as a boom year.

Preliminary figures from the Swedish Geological Survey show that exploration in the Scandinavian country reached record heights, with total exploration expenditures topping US$27.5 million, compared with US$24 million in 1996. Investment in Stockholm-listed companies also rose considerably, to more than US$33 million from less than US$13 million. In addition, the Oslo Stock Exchange in neighboring Norway was used to raise US$4 million for exploration in Sweden.

Preliminary figures for 1997 show that Sweden is Europe’s top producer of iron ore, gold and lead; it ranks second in silver and zinc production, and fourth in copper.

The increased exploration efforts have already begun to bear fruit. In September, North Atlantic Natural Resources (NAN) discovered the Vargbacken gold deposit in the western part of Sweden’s Skellefte district, which appears to share some characteristics with a nearby gold mine, Bjorkdal. A drilling program is under way at Vargbacken. North Atlantic is also pinning its hopes on the Nautanen copper-gold deposit in the Gallivare area of Norrbotten province.

NAN, which is owned 38% by South Atlantic Resources (SCQ-V) and 38% by Toronto-based Boliden (BOL-T), has applied for an exploration permit covering 9,500 ha in the historic Sala silver district. The company is planning an “aggressive” exploration program that is expected to commence shortly.

NAN also reports that a drilling program has been completed on its Ekhult gold prospect in Smaland. No significant gold intercepts were encountered, and further exploration at Ekhult is under review.

NAN’s exploration budget in 1998 is roughly US$3 million. The company controls some 7,000 sq. km of prospective ground in Sweden.

Boliden has found more mineralization at its Renstrom Deep project. The deposit is now estimated to contain at least 350,000 tonnes grading 12% zinc.

Other developments in Swedish exploration are noted below:

* Swedish junior ScanMining has intensified its drill program at the Ersmarksberget gold-zinc deposit. The company says probable resources have been pegged at 1,200 tonnes grading 3 grams gold per tonne.

ScanMining expects to start production at Ersmarksberget within two years.

* Vancouver-based Viking Gold (VGCN-C) has drilled more than 4,000 metres on its Svartliden property.

* Toronto-based William Resources (WIM-T), which bought Swedish gold producer Terra Mining in 1996, is continuing its US$5-million exploration program in Sweden and Finland, concentrating its efforts around the operating Bjorkdal mine in Sweden.

* Rio Tinto (RTP-N) has set up a national office in the northern Swedish town of Lulea. The company spent roughly US$1 million last year exploring mostly in the Kiruna area and the Skelleftea district.

* Finnish major Outokumpu stopped mining the Viscaria copper deposit in April 1997 because of ore depletion. The company is exploring for nickel in the Norrbotten and Vasterbotten areas.

Australia’s Broken Hill Proprietary (BHP-N) is actively exploring for copper, zinc and gold in the Bergslagen district of central Sweden. The project’s current budget is more than US$600,000.

* Another Australian producer, North, is exploring for zinc and other base metals in the vicinity of the Zinkgruvan zinc mine in central Sweden. North owns Ammeberg Mining, the operator of Zinkgruvan.

North spent about US$1.3 million in 1997 on exploration near Zinkgruvan. In November, the company reported delineating a deposit with more than 2 million tonnes grading 3.5% copper.

* On the gemstone front, possibly the first diamonds ever found in Sweden were extracted from a boulder by prospectors working in the extreme northern region of Lappland. North Star Diamonds, 65%-owned by

Vancouver-based Poplar Resources (PPX-V), has signed an agreement with the prospectors and conducted a regional kimberlite indicator mineral survey in the area from which the boulder is thought to have originated.