Sotkamo Silver has in 2017 continued negotiations with financiers to begin the actual mine construction with a strong cash position and full funding without the need for any replenishment funding. During 2017 and until today, the Company has had and still has several ongoing discussions regarding the funding. We work with many alternatives and are having advanced discussions with some financing contributors. This has taken longer time than earlier was expected and will continue to do so. I look forward to Sotkamo Silver finding a win-win solution among those several financing discussions that are going on.
At the same time, we continue to prepare for the definitive construction start with engineering planning and with already started infrastructure investments, both above and below the ground. The building for the concentrating plant has been ordered. The earthmoving and foundation works for the production plant have been commenced at the construction site. Construction will continue as planned in the first half of 2018.
We are in full swing to start the production during the beginning of 2019. To keep this schedule, the Company reached an agreement at the turn of the year for the delivery of the mill circuit for the Silver Mine. The agreement means that the two mills included in the mill circuit will be delivered during the autumn of 2018. As a result of this agreement, the Company has already decided to invest more than 8.5 million euros in the construction projects under way in the Silver Mine, in addition to the normal corporate and development costs. The Company has decided to fund these Silver Mine project investments from its cash reserves.
We have now started a Tekes project, which is a subset of the mine construction and the production development process. In this project, Sotkamo Silver will introduce a production process for the ore pre-sorting, and a maintenance program based on modern remote controlled technology. This is an independent system in the production process, and it deploys Big Data, industrial intranet and remote process control. The project will increase the material efficiency and energy efficiency of the mine and reduce carbon dioxide emissions and water consumption. It will thereby strengthen the future prospects of Silver Mine and improve our ability to respond to the metal price fluctuations.
During the coming years, we plan to activate our exploration and research work in the vicinity of the Silver Mine. We have several interesting exploration targets with good prospects for containing minable silver-zinc-lead-gold deposits in the vicinity of the Silver Mine and below the known mineral resources.
We will also activate our exploration in Sweden by investigating opportunities to start tungsten exploration. We have applied for seven prospecting licenses in Bergslagen area around the known mineralisations and historic mining sites. They have a good potential for tungsten deposits and future mining production. Tungsten is expected to be an important factor, as comes to the high-tech future, and the European Union considers tungsten to be one of the critical raw materials for the European market. Its demand is steadily increasing, and a global shortage of tungsten is expected to lead to a constant price increase.
The Company also explores opportunities to activate the prospecting in the Mo I Rana area in Norway, where we have some research targets and five mining licenses in the former Mofjell mine. The area has a significant ore-geological potential with over 200 known deposits, of which over 90 are located within the Company's research areas. There are nine sulphide mineralisation zones each of which is several kilometres long. Mo i Rana area in Norway is favourable for rich and large massive sulphide deposits, so-called VMS (Volcanic-hosted Massive Sulphides).
The mineral resource estimate comes from the previous mining business, and the amount of historical mineral resources is estimated to be 3.16 million tonnes containing 2.5% zinc, 0.4% lead and 0.3% copper. In samples taken in the sulphide-impregnated part of the mine, high gold values of between 5 and 10 g/tonne have been observed. Another promising target in this very interesting area is Sølvberget (Silver Mountain) with high silver levels, sometimes up to 100-300 g/tonne in conjunction with veins rich in galena. The Company owns a total of 20 exploration rights in the area. For further development of these deposits, we explore opportunities to find a partner for possible joint venture financing.
The most important event of the year was the redemption period for Sotkamo Silver's warrants in August. The Company received approximately 53.2 MSEK (approximately 5.6 million euros) of new capital. This improves the Company's ability to finance the Silver Mine project. This important support from our shareholders will create a good basis for the Company's future.
We are now facing a exciting time. Together with our qualified employees, shareholders and partners, we will construct the mine, launch the mining work and maintain it. We will also continue to develop Company's other projects for many years to come.
Downloud: Annual Report 2017 (in Swedis)
CEO Timo Lindborg