Agnico boost its stake in Riddarhyttan

Agnico-Eagle Mines (AGE-T) has agreed to acquire 12.7 million share of Swedish-based and listed Riddarhyttan Resources for US$10.8 million.

Agnico can pick up the shares form Riddarhyttan largest shareholder, privately held Swedish miner Dunross & Co. The notes will boost Agnico stake in the company to 14.1%.

Riddarhyttan’s key asset is the Suurikuusikko gold deposit in Finland. The advanced-stage exploration project is situated about 890 km north of Helsinki. Agnico says the 22-claim 17-sq.-km property has geology and topography similar to its land package in the Precambrian greenstone belt of Quebec’s Abitibi region.

Gold mineralization at Riddarhyttan occurs along a north-trending, steeply dipping shear zone stretching for some 16.1 km. The gold is associated with near-surface, lens-shaped sulphide bodies that strike north-south and are almost vertically oriented.

The Main zone at Suurikuusikko runs almost 1.6 km in length, varies in thickness from 3 to 30 metres, and has been traced to a depth of at least 366 metres. The zone remains open at depth.

According to Riddarhyttan, most of the gold is associated with arsenopyrite and pyrite, with less than 10% found a s free gold in the upper oxidized parts of the mineralized zones.

Since 1998, Riddarhyttan has sunk some 393 holes (totalling around 75,000 metres) along a 16-km mineralized structure. Of that length, about 1 km has been tested to depths of 300-460 metres (around the main zone). Another 3 km of the structure has been drilled to a depth of up to around 150 metres.

Riddarhyttan plans further drilling and metallurgical testing this year aimed at defining a mineral resource, uncovering new mineralized occurrences, and providing material for further metallurgical test work. The company will also review a previously completed preliminary economic assessment of the project.

Agnico expects the deal to close by mid-May, pending the replacement with Agnico representative of Dunross’ two agents on Riddarhyttan’s board.