Mawson advances Rompas despite Finnish bureaucracy (May 30, 2011)

Ranked the world’s fifth-best mining jurisdiction based on exploration potential and safety of investment in the Fraser Institute’s Annual Survey of Mining Companies for 2010/11, Finland is generally regarded by mining executives around the world as being more than just mining-friendly. 

The Nordic country boasts a transparent regulatory system, excellent infrastructure, a world-class mining equipment manufacturing industry, and a highly educated and skilled workforce, not to mention endowments of gold, copper, chrome, iron ore, nickel, platinum group metals, and phosphates, among other
resources.

But for Mawson Resources (MAW-T) and its Australian president, Michael Hudson, obtaining the paperwork required to carry out serious exploration in the country has been far from easy. His company has been waiting for the government to process key claim applications for its Rompas gold-uranium project since September 2009, and is potentially looking at another 6 to 18 months until the company is allowed to complete a diamond drilling program on the project. 

“It’s a good country, it’s a secure country,” Hudson maintains. “But they’ve got themselves in a bit of a conundrum in terms of processing claim applications into claims.

“For most people, it’s not a problem because you can secure ground for quite a while and you can do good early-stage work. It’s only when you come across something that’s quite unique and gets
everyone’s attention… such as Rompas…that it becomes an issue.”

Hudson says the problem dates back to around 2006, when claim applications put forward by other companies for prospects fairly close to Finland’s capital, Helsinki, resulted in some landowners feeling disenfranchised. An outdated mining law
allowed drilling as little as 50 metres from residential houses, while annual compensation payments to farmers and others for land prospective for uranium amounted to just US$13 a hectare.

Now, each claim application is subject to a detailed review, with a new mining act scheduled to be tabled in Finnish parliament this summer. But as construction in western Finland of what will be the world’s largest nuclear power plant, Olkiluoto 3, nears completion, anti-mining sentiment among civilians is gaining strength throughout many parts of the country. 

Hudson says his company’s Rompas claim applications are being treated no different from any other claims, despite being prospective for both gold and uranium. In the meantime, Mawson is allowed to carry out “prospecting work” and “low-level
exploration,” but no trenching or drilling. 

At the end of May, the company will begin a $750,000, 15-person surface exploration program focused on generating new targets for future drilling, including mapping and sampling. Much of the work will be on the 609 sq. km surrounding the Rompas project Mawson has filed new claim applications for. The company now holds a total of 833 claim applications covering 753 sq. km. 

Late last year, shares of the company jumped to a high of $2.69 from $1 after Mawson released grab sample results grading as high as 22,723 grams gold per tonne and 43.6% uranium oxide from a 6-km-long mineralized trend at Rompas. Adding to the hype, some of the samples sent back to Vancouver were briefly stopped by German air transport authorities because of high radiation levels.

Mawson acquired the project from the French nuclear giant Areva in April 2010 in exchange for issuing it close to 5 million shares at a deemed price of 29¢ each, as well as 4.2 million share purchase warrants exercisable at $1 for four years. Hudson says he was able to strike the deal on such good terms because Areva was selling many of its exploration assets around the world at the time, after the 2008 financial crisis. 

Hudson is based in Melbourne but has developed a strong network of contacts in Scandinavia and Finland over the past few years. He is also a director and large shareholder of Tasman Metals (TSM-V), exploring for rare earth elements (REEs) in Sweden with considerable market
success.

Next month, investors anxiously awaiting drilling on Mawson’s Rompas property will finally have a brief respite from Finnish bureaucracy. 

The company recently completed 28 very shallow diamond drill holes totalling 155 metres using a “low environmental footprint” drill rig mounted on a snowmobile (it had to get special permission to do so). Assays from the program – which could only test a metre or so below bedrock across one line of the 6 km trend – will be available in June or July, according to Hudson. He cautions investors not to get excited about the results, however, as it was mainly carried out to see what the bedrock looks like along strike and under cover. 

Should the company finally receive permission to fully explore the property sometime in the near future, Mawson will no doubt be ready. As of Feb. 28, 2011, it had $12.6 million in working capital with which to drill.

Shares of the company closed up 18¢ to $2 on May 18, on trading volume of 64,000 shares.