Northland update.
Northland Resources finishes Kaunisvaara concrete work
2011-12-23 07:19 ET - News Release
Mr. Karl-Axel Waplan reports
NORTHLAND'S KAUNISVAARA PROJECT ON TIME AND ON BUDGET
Northland Resources SA is providing a year-end update on its magnetite iron ore Kaunisvaara project in northern Sweden. Pictures of the different areas mentioned are available on the corporate website or on request.
Progress at the Kaunisvaara project site was steady through the first winter months. Civil works were completed in October. More than 600,000 cubic metres of the Tapuli overburden has been removed so far, and continuing development work is being carried out at an average rate of 100,000 cubic metres of material per week.
Construction of large buildings
The crusher for the Tapuli ore is under construction. The concrete work has been completed and the focus has now shifted to building of the ore sheds in front of the mill. The steel structure will be raised in the first weeks of 2012, all according to the original timetable. Two-thirds of the roof and wall panels at the largest building on the site, the process plant, are mounted and the concrete has been poured for the autogenous grinding mills for the Tapuli and Sahavaara lines and for the foundations for the Vertimills. Detailed design of the process plant is ongoing and all long lead items, including the crusher and mills from Metso, are on track for delivery to the site at the end of second quarter of 2012.
Also on plan, the process water pond has been completed and the important water process systems are in their final stage, with only 500 meters of pipeline remaining to be laid. This will be finalized in early January. In addition, all major foundation works for the truck workshop have been completed.
Experienced Management on Site
The Kaunisvaara Office is now fully equipped. Staff moved in at the beginning of December. Northland Resources AB and the Kaunisvaara operations are all reporting to Mr. Manfred Lindvall, who has 35 years of experience which include senior positions within several leading Nordic mining companies. The senior management includes:
- Mr. Jan Rutqvist, in charge of strategic and operational planning. Mr. Rutqvist has 30 years experience of senior positions with large, open- pit operations. The most recent was as General Manager at the Bulgarian Asarel operations, and before that at Boliden's Aitik mine;
- Mr. Glenn Nilsson, Manager of the Tapuli mine. Mr. Nilsson has over 30 years of experience of managing production at Boliden's Aitik mine;
- Mr. Hans Andersson, Manager Sahavaara Mine and Manager Infrastructure. Mr. Andersson has 27 years experience of senior production and project positions within the Swedish mining industry. In his most recent position, he was responsible for crushing and conveying of ore at Boliden's Aitik expansion project;
- Mr. Kjell Johansson is responsible for managing the maintenance at the Kaunisvaara operations. Mr. Johansson has more than 30 years of experience of planning and maintenance at large mining operations and in particular Boliden's Aitik Operations;
- Mr. Egil Ostlund will join the team in February 2012. Mr. Ostlund takes on the position as mill manager and brings 30 years of experience of mineral processing operations in senior positions; the most recent was at Boliden's Aitik operations.
Dispensation for 90 Tonnes Trucks
The Swedish Transport Authority is committed to cooperate with Northland to find the most efficient transportation solution as possible. They have confirmed this by granting the dispensation for 90 tonnes gross weight trucks following extensive studies by Northland. This is the maximum weight possible due to the current condition of the bridge crossing the Tarendo River.
Northland will now proceed with the next phase of the plan which will include tests using an actual 90 tonnes truck which will help to determine the most efficient balance between gross weight and relative speed on the road to ensure an optimum number of daily roundtrips.
Logistical Solution Together with Strong Partners
Northland and its logistical partners, Savage Services, Peab and Grieg Logistics are in the final stages of completing the logistical solution for the transport of magnetite concentrate from the mine in Kaunisvaara to the port in Narvik. Pre-planning and detailed design of the rail terminal in Pitkarjarvi is ongoing, where the magnetite concentrate will be transferred from truck to railcar.
Pre-development Commenced at Fagernes
As reported in August 2011, Northland signed an agreement with the Port of Narvik, Norway for the lease of the area necessary for the operation of an iron ore terminal at Fagernes, south of the city. The terminal, which is expected to efficiently load vessels of up to 180,000 tonnes, will consist of a quay, a heated unloading facility for the railcars, a storage building and a ship loader.
On December 1, 2011, Northland received the construction permit and the engineering company Peab has initiated the construction of the quay and ancillary infrastructure. Currently the preparatory work is being carried out to enable piling for the new quay.
Market is Ready for Northland's High-Quality Product
In addition to the ongoing work in northern Scandinavia, Northland has recently met with off-take partners as well as end-use customers. As previously announced, Northland secured off-take agreements for the full production volume during 2010 with Tata Steel, Stemcor and Standard Bank, all of which are on a long-term basis. The agreement with Standard Bank is the largest and also for the longest period of time. It covers 60% of the volume for 10 years after first production.
"Standard Bank continues to work closely with Northland and has commenced the joint marketing effort, making initial contact with its extensive client base both in China and via its global network. While the market has shown recent turmoil in terms of premiums and changes in the pricing structure, there appears to be good interest in this high-grade product and we are confident in realizing good results through the marketing campaign in partnership with Northland," said Jim Coupland, Managing Director - Global Head of Base Metals and Bulk Commodities at Standard Bank.
"While our contracts with Tata and Stemcor will primarily target the European market, our agreement with Standard Bank is opening up opportunities for substantial volumes of high-grade iron ore to be marketed to the Middle East and Asian iron ore markets," said Hans Nilsson, Vice President - Marketing at Northland. "Standard Bank will buy the products from Northland and sell to the end users but the marketing of the products and prioritization of end users will be collaborative effort between Standard Bank and Northland. Our recent joint contact with customers, traders and import agents gave us increased confidence that our high-grade, high-quality magnetite concentrate will receive a premium in the market. Northland's product is particularly interesting for those companies who operate their own pelletizing plants. However, the product has also proven to have a positive impact on sinter plant productivity when replacing hematite concentrates."
Iron ore analysts are expecting iron ore prices to remain at high levels until at least 2015 due to continued strong demand in China and slower than expected ramp-up of large projects in Brazil and Africa.