23rd Sep 2014 14:55
LONDON (Alliance News) - FinnAust Mining PLC is aiming for copper grades as high as ten times the average as it looks to build "the most profitable mine" offering big returns for a low capital outlay, Executive Chairman Alastair Clayton told Alliance News.
FinnAust's Finnish operations, consisting of the Hammislathi, Enonkoski and Outokumpu greenfield projects, have good infrastructure and are surrounded by national logging sites, leaving few environmental barriers, according to the company.
Hammaslathi, in the south-east of the country, already has an open pit mine, which FinnAust will not ressurect.
"FinnAust will be focused on exploring around it (the open pit) with the intention of underground mining which will leave a low footprint on the area. Average copper grades sit at around 0.7%, we are hoping for up to 7% copper grades, ten-fold the average. We are looking for a high grade mine that offers good returns for low capital expenditure," Clayton said in an interview.
Recent discoveries at hole R325 at the site have intercepts including 5.6 metres at 3.2% copper, 2.7% zinc and 0.7% lead. The company is aiming for 5 million tonnes of ore over an eight-year mine lifespan. It wants to build "the most profitable mine, not the biggest," Clayton said.
Further results for its Hammaslathi target will be released in two weeks, followed by a constant drip of information, the executive director said.
FinnAust has digitalised the ore body at its Enonkoski site for the first time, revealing histroic drill intercepts including 15 metres at 6.9% nickel, 2% copper and 0.3% cobalt. It believes previous owners overlooked the potential for high-grade sulphide ore bodies.
FinnAust have one single drill rig, which is drilling for 11 months of the year at Hammaslathi. "We would be drilling this mine (Enonkoski) now, but we only have one single drill rig and the discovery at Hammislathi is the current priority. Hopefully, Enonkoski will be drilled before Christmas" said Clayton.
Its Outkumpu mine, described as a "high risk, high reward exploration that could be worth infinite amounts," according to Clayton, is due to be explored further next winter as the company continues to "try to get something," he added.
"Overall, we are not ready for production, nor are we even thinking about it," Clayton said.
The three projects have needed EUR12 million in capital expenditure to date, he added.
Clayton said a well-run miner shouldn't feel the impact of commodity pricing that's being claimed by some companies. "A high quality asset that is operated correctly should not be vastly affected by commodity prices, I just don't believe it. The industry has been lazy through poor management and high cost structures," he said. "Nickel has been the best performing commodity this year, based on pricing," he added.
Western Areas Ltd, the third largest nickel producer in the world, owns 65% of FinnAust and although it has a 'similar philosophy' to FinnAust and shows 'ongoing commitment', Clayton admitted 65% is 'too much and needs addressing'. This is an ongoing topic that is being looked at, said Clayton.
FinnAust's shares were down 5.2% to 2.25 pence Thursday.
By Joshua Warner; [email protected]; @JoshAlliance
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