Scandinavian offshoot signs agreement

THE BOURSE WHISPERER: Kiruna Iron AB, the wholly owned subsidiary of ASX-listed Scandinavian Resources, has entered into a cooperation agreement with Boliden Mineral AB.

The agreement covers the Lannavaara Permits located approximately 70 kilometres north-east of Kiruna, in the Norrbotten Region of northern Sweden.

Boliden is a leading European metals company focused mainly on zinc and copper with operations conducted across mining and smelters.

Kiruna Iron is the largest permit holder in the Kiruna district and controls the majority of the district’s historical iron deposits and is striving to become a producer of premium quality iron concentrate.

“It is a pleasure indeed to enter into this Agreement with Boliden, as they have a proud history in Sweden,” Kiruna Iron technical director Olof Forslund said in the company’s announcement to the Australian Securities Exchange.

“We hope this will be the start of a long term relationship whereby we both have exploration success at Lannavaara.

“We will soon commence detailed assessment of the historical work completed by the Geological Survey of Sweden prior to planning our own activities.”

The Lannavaara Permits contain the Kevus and Teltaja iron deposits that were discovered in the early 1920’s.

Work carried out by the Geological Survey of Sweden (SGU) in the early 1970’s resulted in both deposits being investigated by detailed geophysical surveys as well as seven diamond drill holes into each for a total of 1,500m.

The purpose of the agreement between Kiruna Iron and Boliden is to explore the Lannavaara Permits for the mutual benefit of both companies.

This is based on Boliden being focused on zinc, copper, gold, silver and lead while Kiruna is focused on iron.

The cooperation will enable the companies to minimise costs for exploration of the Lannavaara Permits and to share the results of exploration.

In consideration of the exploration right, Kiruna has undertaken to invest US$1.5 million in exploration expenditure on the Lannavaara Permits within five years.

If it meets this minimum commitment it will have earned a 100% interest in the iron (only) rights.

If the minimum commitment is not met, Kiruna will not have earned any interest at all.

After the minimum commitment has been met, Kiruna must then invest US$1 million in exploration expenditure every three years to maintain its interest.

If the continuing commitment is not met Kiruna will not earn any interest in the iron rights except in relation to exploitation concessions granted by the expiry of the last period or subsequently granted as a result of an application made within that time.

Kiruna will provide Boliden, free of charge, any and all exploration data it collects with respect to the Lannavaara Permits.

A further agreement will be entered into if either Boliden or Kiruna wish to proceed to mining.