Nan boosts Storliden resource

North Atlantic Natural Resources (NAN), a Swedish public company trading on the Stockholm Stock Exchange, has released an independent resource estimate for the Storliden copper-zinc deposit near the town of Mala in northern Sweden.

Vancouver-based South Atlantic Resources (SCQ-V) and Toronto-based Boliden (BOL-T) each hold 38% of NAN, which raised $23 million last summer for its Scandinavian exploration programs. About $10 million of this total remains in its treasury.

The Storliden deposit is reported to host resources totalling 1.8 million tonnes grading 10% zinc, 4% copper and 0.07% lead, plus 29 grams silver and 0.3 grams gold per tonne. This represents an 80% increase in overall tonnage from estimates released three months ago.

Storliden is in the Skellefte district, where NAN, controlling more than 2,500 sq. km, is the largest claim-holder. The land package was acquired based on the results of a 1997 geophysical survey.

The latest resource estimate was made by independent mining engineer Brian Spratley and audited by Strathcona Mineral Services. Of the total, 1.5 million tonnes are classified as drill-indicated with grades of 11.5% zinc, 4.4% copper, 0.06% lead, 28 grams silver and 0.3 gram gold. The inferred resource of 300,000 tonnes grades 3.4% zinc, 2.4% copper, 0.13% lead, 28 grams silver and 0.3 gram gold. Fifty-seven holes were used to define the limits of the deposit and to calculate the resource estimate.

The Storliden deposit consists of several parallel, sub-horizontal, stacked layers of mineralization hosted in volcanic sedimentary rocks. The horizontal extent defined by drilling is 400 metres, with an average width of 100 metres. The average overall thickness of mineralized intercepts is 8 metres, though it varies from 0.5 to 27.9 metres. The average depth of the deposit is 130 metres from the surface, with mineralized intersections varying between 53 and 186 metres in depth.

Limited metallurgical tests by Lakefield Research on a composite 120-kg sample indicates recoveries of 87% for zinc, more than 90% for copper, 65% for gold and 83% for silver.

On the exploration front, NAN says there is considerable potential for discovering more sub-parallel and stacked mineralized lenses in the Storliden area. The current program, which includes drilling of outside targets, is expected to continue into 1999.

Meanwhile, definition drilling is in full swing at the Storliden deposit, along with environmental studies and permitting efforts. Depending of the results, a feasibility study may follow. If a production decision is made, NAN estimates, at least 18 months would be required for construction.

In the event NAN decides to sell the deposit, Boliden holds a right of first refusal and is entitled to buy at least a 51% interest at a fair market price. If a third party makes an offer, Boliden can acquire the deposit at the same price and conditions. However, if it declines to exercise its right, NAN can proceed with development.

NAN says the project will benefit from roads, power, a trained workforce, and the availability of Boliden’s existing processing facilities. The base metal producer owns an operating mill and smelter 90 km and 130 km, respectively, from Storliden.