Review of the Mine Planning of Silver Mine

The mining-plan has been updated, and ore-sorter will be inserted into an ore-preparation process. The feasibility study will be updated during the year according to these encouraging results.

Ore-reserves in the category Proved and Probable are totally 2.76 million tonnes with a silver grade of 124 g/t Ag (JORC code 2012).

The silver content in the ore at the first four planned years of production is between
144-124 g/t silver and gold content is about 0.45 to 0.40 g/t in the mill-feed. During the third planned production-year capacity increase from 350 000 tonnes to 450 000 tonnes ore per year. Planned production with currently known ore-reserves is about 7 years.

The Reviewed Mineral Reserves of Silver Mine :

Ore-reserve estimate follows the Australian JORC Code. The calculations are done with a "net smelter return cut-off" at 30 €/ton ore for underground-mining and 60 €/ton for ore-feed to the mill. A waste-rock dilution of 15% at underground mining and 10% at open pit has been applied.

Jouni Kankkunen MSc (Mining), MAusIMM has conducted the ore-reserve estimate. Outotec (Finland) Oy has carried out a review of the ore-reserve estimate and the mine-technical part of the forthcoming update of the Silver Mine´s Bankable Feasibility Study. The review was conducted by Pekka Loven, MSc (Mining), MAusIMM (CP) of Outotec (Finland) Oy. He holds a Qualified Person status, according to JORC, 2012. The updated ore-reserves are based both on information from test-results and an update of the Bankable Feasibility Study, as well as information from Sotkamo Silver.

The mining plan assumes the longitudinal bench-and-fill mining method with a combination of cemented rock fill and uncemented waste fill. The sublevel interval is 20 m, which is suitable for longitudinal mining. There are areas in the ore body where the thickness exceeds 25m and sublevel open stoping with delayed backfilling will be utilised. According to the mining schedule, the production starts from the open pit and from the 140 level in the underground mine simultaneously. The geometry of the ore body is such that the need for a sill pillar is quite small.

Below: Draft Mining Plan

Silver Mine - Resource Estimate

JORC Compliant Mineral Resource Estimate

Sotkamo Silver has during 2014 received the latest independent estimate of mineral resources for Taivaljärvi's Silver Mine-deposit. 

Resources-model is due to re-interpretation of geology based on results of the sextensive sludge-drilling program with significant new silver-rich drill intersections during 2013. Special attention in modelling has been paid on geological continuity, which creates larger mineralised bodies. In the mine planning procedure, this gives an opportunity to schedule mining-operations in a way where ores with highest silver-contents will be mined during first years. The deposit is open at depth and based on geophysics. The geological formation with same properties continues below presently known 550-meter level all the way down to at least 1.500-2.000 meters.

The updated mineral-resources are based on the 2013 completed sludge-drilling program and have been estimated by the guidelines of the JORC Code (2012). Based on these figures mine-plan and ore-reserves will be up-dated during Q1/2014.

Exploration mineral resource estimation

Dr Parkkinen has also presented an NI 43-101 compliant inferred mineral resource estimation which is called "exploration mineral resource estimation". This estimation describes the total amount of the mineralisation, which includes the above presented estimation with higher silver grade and cut-off.

"Mineral Resource", cut-off grade 30 g/t Ag, density 2.8

Classification

Tonne

Silver g/t
No upper cut-off


Zinc %

Lead %

Silver
Moz
Inferred Resource 13,000,000 65 0.5 0.2 26

 

Below Exploration solids (magenta), research tunnel (light brown), holes and soil surface, looking towards NE. Inferred 13 million tonne. (Dr. Jyrki Parkkinen 2010).