EUROPE’S FIRST SILVER MINE TO BE OPENED IN SOTKAMO
The concentrate production of Sotkamo Silver Mine will begin in March, after a determined development period that was started in 2010. Nearly 40 years will have passed since the discovery of the silver deposit in Taivaljärvi upon the start of the concentrate deliveries. Sotkamo Silver Mine is the first of its kind in Finland.
15. March 2019
Researchers discover silver deposit in 1980
Funded by the Finnish Ministry of Trade and Industry, the Kuhmo ore project of the University of Oulu was carried out in 1977–1980. During the project, the 200-kilometer long Kuhmo schist belt was examined as a basic research in support of ore prospecting. The research in the Taivaljärvi area conducted during the project led to the discovery of a silver deposit in 1980. Tauno Piirainen, Research Director of the project, as well as researchers Kalle Taipale and Ilkka Tuokko received the state’s ore reward in 1983 on account of the discovery.
On the southern side of Tipasjärvi, researchers discovered exposed rock with visible sulfides as well as ejected stones, agglomerates, which are characteristic of a nearby volcanic eruption vent. In Canada, these stones are called mill-rocks, as they are often located near ore deposits and one can hear the sounds of the concentration plant when standing on them. Further research in the area led the researchers to discover several volcanic rock boulders containing sphalerite and galena in a channel dug in Tipasjärvi. Their discovery was made public to all ore prospecting organizations in the project’s report series in fall 1980. The project also included a percussion drill sample line in the incoming direction of the glacier. High concentrations of zinc and lead were discovered in the surface expression area of the deposit beneath the moraine, located approximately 500 meters from the boulders.
A mining claim in the Taivaljärvi area
Kajaani Oy staked a claim in the area after the publication of the Kuhmo project’s results in 1980. Kajaani Oy’s ore prospecting organization explored the silver deposit and other parts of the approximately 25-kilometer schist belt until 1988 using moraine geochemistry and certain deposits by carrying out drillings. The first hole reaching the deposit was drilled in 1981 and the extent of the silver deposit on surface as well as its extension to a depth of approximately 550 meters was confirmed already then by carrying out diamond drillings from surface.
Research on the exploitability of the silver deposit
Kajaani Oy (later merged with UPM) and Outokumpu Oy established the Taivalhopea joint venture in fall 1988 to survey the usability of the deposit. Taivalhopea commissioned the excavation of a 2600-meter research tunnel, currently used in production, reaching 350 meters depth on the footwall side of the deposit. In addition, the currently used ventilation shaft was excavated from surface to a depth of approximately 340 meters. The deposit was explored with drillings from the tunnel and land surface, in addition to which concentration tests were carried out, plans for mining and a concentration plant were made, and a feasibility study commissioned by Outokumpu was carried out in spring 1991. When the study was completed, the price of silver was USD 4/troy ounce, resulting in the decision to abandon the project. The research data and mining concession remained the property of Taivalhopea. The tunnel was filled with water, leaving the area unused until the 2000s.
Sotkamo Silver applies for research permit in the area
The Taivalhopea joint venture let the mining concession lapse in 2005. Silver Resources (later Sotkamo Silver), established in 2006, applied for and received a research permit in the area and purchased the research data from the Taivalhopea joint venture. The tunnel was drained of water and research was continued with drillings and environmental assessments. In 2011, a pilot-scale concentration test was carried out and a mining concession was applied for. The environmental and water economy permit for the mining operations was granted in 2013. In the feasibility study phase, the process was developed further by testing preconcentration technology and incorporating it into the production process.
Sotkamo Silver listed on the stock exchange in 2010
Sotkamo Silver AB (publ) is listed on Stockholm’s NGM Stock Exchange and parallel listed on Nasdaq OMX Helsinki. Approximately 90% of its ownership is in Finland, with approximately 14,000 shareholders in total. The largest owners are Ilmarinen Mutual Pension Insurance Company, Hexof Oy, Timo Lindborg and Finnish Minerals Group. Sotkamo Silver AB’s Board of Directors consists of five members, all of them Finnish financial or mining industry professionals. The subsidiary owns the deposits located in Finland and has carried out all studies and assessments related to the opening of the mine.
Funding for the construction of the mine to be confirmed in spring 2018
The final funding needed for the construction of the silver mine was obtained in late winter 2018, primarily from Finnish investors. This was a turning point for Finnish investors and marked the beginning of restoring their faith in domestic mining. The total investments will amount to approximately EUR 70 million, including previous investments. Annual revenue will initially be at a level of EUR 30–40 million before capacity increase. Intense construction of the mine began in spring 2018, and production will be started in March 2019. The mine will offer direct employment to approximately 100 people and indirect employment to a considerably larger number of people. Ore will be mined from open-pit as well as underground mines. The concentration process will be carried out with usual methods, with concentrates being produced with the conventional flotation process.
Environmental values will be an important factor already at the construction stage
Communication has been maintained with operators and stakeholders in the nearby area since the start of operations through informal evening events and with the environmental monitoring group gathering on a regular basis. During the construction of the mine, particular attention has been paid to environmental values, and a multi-stage water treatment plant will be introduced immediately upon the start of production. The aim of the investment in the treatment plant at an early stage is to minimize the current impact of operations on the environment and simultaneously ensure the possibility of ramping up production in the future.
Ore reserves in the mine can last longer than researched
The known ore reserves in the silver mine are sufficient for approximately seven years of production. In the production stage, the research of the deep extension of the deposit will be continued. This has already been started using deep geophysics and additional drillings. The plan is to expand production from the current 450 meters’ depth to nearly a kilometer’s depth, which could expand the mine’s life cycle considerably. In addition, there are several known promising silver and gold ore occurrences near Tipasjärvi greenstone belt’s volcanic centers, and they may evolve into significant satellite mines supporting the operations of the concentration plant at the silver mine.
Metal concentrates from the mine will be refined in nearby smelters with respect for the environment
Concentrates are delivered to Boliden’s smelters in Kokkola and Rönnskär, where environmental values have long been the basis of operations. Once the sound of ore mills hits the mill rock outcrops, it has been nearly 40 years since the discovery of the deposit.
The mine strengthens Finland’s mineral and metal production cluster in the EU
The Sotkamo Silver mine produces approximately 45,000 kilos of silver annually, which is a significant addition to Finland’s current production level of 85,000 kilos a year. Silver is used, among other things, in electronics, cars, batteries, solar panels, antibacterial treatments, water treatment, plating of bearings and engine parts, medicine, catalysts, jewelry and as an investment. Also gold, lead and zinc can be recovered from the Sotkamo ore. Silver, lead and zinc are all battery metals, which are expected to be in high demand in the coming years, as the use of electric cars becomes more widespread.
Sotkamo Silver Oy
Chairman of the Board
Sotkamo Silver AB (Publ)
Chairman of the Board
15. March 2019