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LUNDIN MINING

NI 43-101 TECHNICAL REPORT FOR THE ZINKGRUVAN MINE, SWEDEN

November 2017

Wardell Armstrong InternationalBaldhu House, Wheal Jane Earth Science Park, Baldhu, Truro, Cornwall, TR3 6EH, United KingdomTelephone: +44 (0)1872 560738 www.wardell-armstrong.com

Wardell Armstrong is the trading name of Wardell Armstrong International Ltd,Registered in England No. 3813172.

Registered office: Sir Henry Doulton House, Forge Lane, Etruria, Stoke-on-Trent, ST1 5BD, United Kingdom

UK Offices: Stoke-on-Trent, Cardiff, Carlisle, Edinburgh, Greater Manchester, London, Newcastle upon Tyne,Sheffield, Taunton, Truro, West Bromwich. International Offices: Almaty, Moscow

ENERGY AND CLIMATE CHANGE

ENVIRONMENT AND SUSTAINABILITY

INFRASTRUCTURE AND UTILITIES

LAND AND PROPERTY

MINING AND MINERAL PROCESSING

MINERAL ESTATES

WASTE RESOURCE MANAGEMENT

DATE ISSUED: 30 November 2017

JOB NUMBER: ZT61-1659

VERSION:

REPORT NUMBER:

STATUS:

V2.0

MM1185

Final


November 2017

PREPARED BY:

Tim Daffern Consultant Mining Engineer

Richard Ellis Principal Resource Geologist

Philip King Technical Director of Process Engineering

Stuart Richardson

Edvard Glücksman

Andrew Beveridge

Senior Mining Engineer

Senior Environmental and Social Specialist

Principal Geotechnical Engineer

APPROVED BY:

Dr. P S Newall Managing Director of WAI

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CONTENTS

1 SUMMARY........................................................................................................................... 8

1.1 Introduction ...............................................................................................................................8

1.2 Description & Location...............................................................................................................8

1.3 Geological Setting & Mineralisation ..........................................................................................9

1.4 Exploration.................................................................................................................................9

1.5 Mineral Resource Estimates ......................................................................................................9

1.6 Mining and Mineral Reserves ..................................................................................................10

1.7 Mineral Processing, Metallurgical Testing and Recovery Methods.........................................12

1.8 Infrastructure...........................................................................................................................12

1.9 Environmental Studies, Permitting and Social or Community Impact ....................................13

1.10 Capital and Operating Costs..................................................................................................13

1.11 Economic Analysis Results ....................................................................................................14

2 INTRODUCTION ................................................................................................................. 15

2.1 Independent Consultants.........................................................................................................15

2.2 Qualified Persons, WAI Review and Site Visit..........................................................................16

2.3 Units and Currency ..................................................................................................................17

3 RELIANCE ON OTHER EXPERTS............................................................................................ 18

4 PROPERTY DESCRIPTION AND LOCATION............................................................................ 19

4.1 Mineral Tenure ........................................................................................................................20

4.2 Surface Rights ..........................................................................................................................25

4.3 Royalties...................................................................................................................................25

4.4 Environmental Aspects ............................................................................................................26

4.5 Permits .....................................................................................................................................26

5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY ........ 27

5.1 Accessibility..............................................................................................................................27

5.2 Climate .....................................................................................................................................27

5.3 Local Resources & Infrastructure.............................................................................................27

5.4 Physiography............................................................................................................................28

6 HISTORY ............................................................................................................................ 29

6.1 Ownership History ...................................................................................................................29

6.2 Exploration History ..................................................................................................................30

6.3 Historical Mineral Resources and Mineral Reserves ...............................................................31

6.4 Production................................................................................................................................32

7 GEOLOGICAL SETTING AND MINERALISATION..................................................................... 33

7.1 Regional Geology .....................................................................................................................33

7.2 Property Geology .....................................................................................................................34

7.3 Description of Mineralised Zones ............................................................................................37

8 DEPOSIT TYPES .................................................................................................................. 42

8.1 Mineral Deposit Type...............................................................................................................42

8.2 Exploration Model ...................................................................................................................43

9 EXPLORATION.................................................................................................................... 44

9.1 Near Mine Exploration.............................................................................................................44

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9.2 Regional Exploration ................................................................................................................44

9.3 Future Exploration ...................................................................................................................44

10 DRILLING ........................................................................................................................... 45

10.1 Drilling by Vieille Montagne (1857-1990) and Union Miniere (1990-Late 1995) .................46

10.2 Drilling by North Limited (Late 1995-August 2000) ..............................................................47

10.3 Drilling by Rio Tinto (August 2000-June 2004)......................................................................47

10.4 Drilling by Lundin Mining (June 2004-2017) .........................................................................47

10.5 Drill Core Diameter ...............................................................................................................47

10.6 Drill Core Recovery................................................................................................................47

10.7 Extent of Drilling ...................................................................................................................48

10.8 Drill Hole Collar Surveys........................................................................................................48

10.9 Downhole Surveys.................................................................................................................48

10.10 Drill Sections......................................................................................................................48

11 SAMPLE PREPARATION, ANALYSES, AND SECURITY............................................................. 50

11.1 Core Sampling .......................................................................................................................50

11.2 Bulk Density Determination..................................................................................................52

11.3 Sample Preparation ..............................................................................................................52

11.4 Analysis .................................................................................................................................52

11.5 Sample Security and Chain of Custody .................................................................................53

11.6 Quality Assurance and Quality Control Programmes ...........................................................54

11.7 Adequacy of Procedures .......................................................................................................66

12 DATA VERIFICATION........................................................................................................... 67

13 MINERAL PROCESSING AND METALLURGICAL TESTING ....................................................... 70

14 MINERAL RESOURCE ESTIMATES ........................................................................................ 71

14.1 Introduction ..........................................................................................................................71

14.2 Mineral Resource Estimate Data ..........................................................................................71

14.1 Geological Interpretation and Domaining ............................................................................73

14.2 Drill Hole Data Processing.....................................................................................................76

14.3 Grade Capping.......................................................................................................................76

14.4 Compositing ..........................................................................................................................78

14.5 Continuity Analysis................................................................................................................79

14.6 Variography...........................................................................................................................80

14.7 Volumetric Modelling ...........................................................................................................81

14.8 Density ..................................................................................................................................82

14.9 Grade Estimation ..................................................................................................................84

14.10 Grade Estimation Validation .............................................................................................86

14.11 Mineral Resource Reconciliation ......................................................................................87

14.12 Mineral Resource Depletion and Non-Recoverable Mineral Resources ..........................90

14.13 Cut-Off Grades for Evaluation...........................................................................................90

14.14 Mineral Resource Classification ........................................................................................90

14.15 Mineral Resource Statement ............................................................................................91

14.16 Comparison to Previous Estimates ...................................................................................92

15 MINERAL RESERVE ESTIMATES ........................................................................................... 94

15.1 Methodology.........................................................................................................................94

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15.2 Mineral Reserve Statement ..................................................................................................96

15.3 Mining Modifying Factors .....................................................................................................98

15.4 Reconciliation........................................................................................................................99

15.5 WAI Review ...........................................................................................................................99

16 MINING METHODS........................................................................................................... 102

16.1 Access and Infrastructure ...................................................................................................103

16.2 Rock Mass Characterisation................................................................................................103

16.3 Underground Mine Layout..................................................................................................112

16.4 Mining Methodologies........................................................................................................113

16.5 Drill and Blast, Design and Operations ...............................................................................114

16.6 Ore and Waste Handling .....................................................................................................115

16.7 Production Schedule ...........................................................................................................115

16.8 Mine Infrastructure.............................................................................................................119

16.9 Mine Services ......................................................................................................................121

16.10 Equipment.......................................................................................................................123

16.11 Human Resource Arrangements.....................................................................................125

16.12 Health and Safety Management .....................................................................................125

17 RECOVERY METHODS....................................................................................................... 127

17.1 Flowsheet Description ........................................................................................................127

17.2 Process Plant Consumables ................................................................................................133

17.3 Plant Sampling ....................................................................................................................133

17.4 Mill Labour ..........................................................................................................................134

17.5 Assay Laboratory.................................................................................................................134

17.6 Historic Production Data.....................................................................................................135

17.7 Concentrate Storage and Transport ...................................................................................139

18 PROJECT INFRASTRUCTURE .............................................................................................. 141

18.1 Energy .................................................................................................................................141

18.2 Water ..................................................................................................................................141

18.3 Tailings Storage Facility.......................................................................................................141

19 MARKET STUDIES AND CONTRACTS.................................................................................. 145

20 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT............... 146

20.1 Environmental & Social Setting and Context ......................................................................146

20.2 Method of study and information sources .........................................................................146

20.3 Access to the Site ................................................................................................................148

20.4 Water Resources.................................................................................................................148

20.5 Infrastructure and Communications...................................................................................149

20.6 Project Status, Activities, Effects, Releases and Controls ...................................................149

20.7 Energy Consumption and Source........................................................................................151

20.8 Mine Waste.........................................................................................................................151

20.9 Water Management and Effluents .....................................................................................152

20.10 Air Quality .......................................................................................................................152

20.11 Noise and Vibration ........................................................................................................153

20.12 Hazardous Materials Storage and Handling....................................................................153

20.13 Biodiversity and Ecosystem Services ..............................................................................153

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20.14 Fire Safety .......................................................................................................................154

20.15 Environmental and Social Impact Assessment ...............................................................154

20.16 Environmental Management ..........................................................................................154

20.17 Social and Community Management..............................................................................156

20.18 Health & Safety ...............................................................................................................158

20.19 Mine closure plans ..........................................................................................................158

21 CAPITAL AND OPERATING COSTS...................................................................................... 159

21.1 Mining Costs........................................................................................................................159

21.2 Mineral Process Plant Operating Costs...............................................................................159

21.3 Total Operating Costs..........................................................................................................160

21.4 Mining Capital Costs ...........................................................................................................161

21.5 Mineral Process Plant Capital Costs....................................................................................161

21.6 Total Capital Costs...............................................................................................................162

22 ECONOMIC ANALYSIS....................................................................................................... 163

23 ADJACENT PROPERTIES .................................................................................................... 164

24 OTHER RELEVANT DATA AND INFORMATION.................................................................... 165

25 INTERPRETATION AND CONCLUSIONS .............................................................................. 166

26 RECOMMENDATIONS....................................................................................................... 168

26.1 Geology and Mineral Resources .........................................................................................168

26.2 Mining and Mineral Reserves .............................................................................................168

26.3 Mineral Processing..............................................................................................................168

26.4 Environmental Studies, Permitting and Social or Community Impact................................168

27 REFERENCES .................................................................................................................... 170

TABLES

Table 1.1: Total Mineral Resources for Zinc Zones at Zinkgruvan ........................................................10

Table 1.2: Total Mineral Resources for Copper Zones at Zinkgruvan...................................................10

Table 1.3: Total Mineral Reserves for Zinc Zones at Zinkgruvan ..........................................................11

Table 1.4: Total Mineral Reserves for Copper Zones at Zinkgruvan.....................................................11

Table 2.1: Authors Responsibilities.......................................................................................................16

Table 4.1: Coordinates of the Zinkgruvan Mining Concession .............................................................21

Table 4.2: Coordinates of the Klara Mining Concession .......................................................................22

Table 4.3: Coordinates of the Marketop Mining Concession ...............................................................22

Table 4.4: Coordinates of the Dalby Hytta nr 1 Exploration Concession..............................................23

Table 4.5: Coordinates of the Flaxen nr 1 Exploration Concession ......................................................24

Table 4.6: Coordinates of the Hjortronmossen nr 1 Exploration Concession ......................................24

Table 4.7: Coordinates of the Orkaren nr 2 Exploration Concession....................................................25

Table 4.8: Coordinates of the Hövdingamon nr 2 Exploration Concession ..........................................25

Table 6.1: History of Exploration Drilling by Company .........................................................................31

Table 6.2: Zinkgruvan Production by Year from 1994 ..........................................................................32

Table 9.1: Exploration Budget for 2017 and 2018 ................................................................................44

Table 10.1: Summary of Drilling at Zinkgruvan.....................................................................................46

Table 11.1: Summary of Stratigraphic Sequence and Lithology Codes ................................................51

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Table 11.2: Zinkgruvan Analytical Laboratory - AAS Detection Limits For Geological Samples ...........53

Table 11.3: ACME ICP-ES Method Detection Limits..............................................................................53

Table 11.4: GeoStats Standard Reference Materials and Reference Values ........................................61

Table 12.1: Summary of Drill Holes within Mineralised Zone Wireframes...........................................68

Table 14.1: Drill Hole Data used for Mineral Resource Estimation ......................................................72

Table 14.2: Summary of Zinkgruvan Search Parameters......................................................................85

Table 14.3: Summary of Annual Reconciliation (July 2016 to June 2017) ............................................88

Table 14.4: Total Mineral Resources for Zinc-Lead Zones at Zinkgruvan .............................................92

Table 14.5: Total Mineral Resources for Copper Zones at Zinkgruvan.................................................92

Table 15.1: Total Mineral Reserves for Zinc Zones at Zinkgruvan ........................................................96

Table 15.2: Total Mineral Reserves for Copper Zones at Zinkgruvan...................................................96

Table 15.3: Mining Factors 2017...........................................................................................................98

Table 15.4: Reconciliation: Average 2017 Stope Mining Factors (%) ...................................................99

Table 16.1: In Situ Stress Measurements............................................................................................104

Table 16.2: Geological Strength Index (GSI) .......................................................................................105

Table 16.3: Rock Strengths .................................................................................................................105

Table 16.4: Stope Dimensions for the 5-year Mine Plan ....................................................................108

Table 16.5: Production Drilling Design................................................................................................114

Table 16.6: Five Years Planned Production.........................................................................................116

Table 16.7: Underground Equipment List (Owned)............................................................................124

Table 16.8: Underground Equipment List (Contractor) ......................................................................124

Table 17.1: Plant Consumables 2016..................................................................................................133

Table 17.2: Mill Labour 2017 ..............................................................................................................134

Table 17.3: Copper Plant Historic Data...............................................................................................137

Table 17.4: Concentrate Analyses.......................................................................................................139

Table 21.1: ZMAB Mining Operating Cost - Forecast 2018 to 2022 ...................................................159

Table 21.2: ZMAB Process Operating Cost – Plan/Forecast 2018 to 2022 .........................................160

Table 21.3: ZMAB Total Operating Cost – Forecast 2018 to 2022......................................................160

Table 21.4: Summary of Mine Sustaining Capital Plan from 2018 to 2022 ........................................161

Table 21.5: Summary of Mineral Processing Plant Sustaining Capital Plan from 2018 to 2022.........161

Table 21.6: Summary of Sustaining Capital Plan from 2018 to 2022 .................................................162

FIGURES

Figure 4.1: Property Location Map (Geology.com)...............................................................................19

Figure 4.2: Location of Licence Areas (SWEREF 99 TM Coordinate System) ........................................20

Figure 6.1: Comparison of Zinkgruvan Mineral Resources from 1982 to 2017 and Rate of Mining

Production.............................................................................................................................................31

Figure 7.1: Location of Zinkgruvan and Regional Geology....................................................................33

Figure 7.2: Geology of the Zinkgruvan Area .........................................................................................34

Figure 7.3: Stratigraphic Sequence at Zinkgruvan ................................................................................35

Figure 7.4: Location of Mineralised Zones at Nygruvan and Knalla Areas of Zinkgruvan.....................37

Figure 7.5: Plan View showing the Geology of Nygruvan Area.............................................................39

Figure 7.6: Geological Cross Section through Nygruvan Area ..............................................................39

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Figure 7.7: Plan View showing the Geology of Burkland Zone including Copper Stockwork ...............41

Figure 7.8: Geological Cross Section through Lindängen and Sävsjön Zones.......................................41

Figure 8.1: Genetic Model for the Zinkgruvan Deposit (Jansson et al., (2017)) ...................................42

Figure 10.1: Plan Views Showing Location of Drill Holes and a) Mining and Exploration Concessions and

b) Inset of a) Showing Near Mine Area Only ........................................................................................49

Figure 11.1: Internal Pulp Duplicate Analysis Plots for Zinc .................................................................56

Figure 11.2: Internal Pulp Duplicate Analysis Plots for Lead ................................................................57

Figure 11.3: Internal Pulp Duplicate Analysis Plots for Silver ...............................................................58

Figure 11.4: Internal Pulp Duplicate Analysis Plots for Copper ............................................................59

Figure 11.5: Blank Sample Analysis for Zinc, Lead, Silver and Copper..................................................60

Figure 11.6: SRM Sample Analysis for Zinc, Lead, Silver and Copper for 309-16 .................................62

Figure 11.7: External Pulp Duplicate Analysis Plots for Zinc – ACME vs ALS CHEMEX .........................63

Figure 11.8: External Pulp Duplicate Analysis Plots for Lead – ACME vs ALS CHEMEX ........................64

Figure 11.9: External Pulp Duplicate Analysis Plots for Silver – ACME vs ALS CHEMEX .......................65

Figure 11.10: External Pulp Duplicate Analysis Plots for Silver – ACME vs ALS CHEMEX .....................66

Figure 14.1: Location of Drill Holes in the ZMAB Drill Hole Database ..................................................73

Figure 14.2: Mineralised Zones at Zinkgruvan......................................................................................75

Figure 14.3: Log Probability Plots of Zinc-Lead Mineralisation for Selected Samples for a) Zinc, b) Lead,

c) Silver and d) Copper..........................................................................................................................77

Figure 14.4: Log Probability Plots of Burkland Zone Copper Stockwork Mineralisation for Selected

Samples for a) Zinc, b) Lead, c) Silver and d) Copper............................................................................78

Figure 14.5: Histogram showing Sample Lengths for a) Zinc-Lead Mineralisation and b) Copper

Stockwork Mineralisation .....................................................................................................................79

Figure 14.6: Example Continuity Map of Zinc Grades at Burkland .......................................................80

Figure 14.7: Example of Modelled Variograms for Zinc Grades at Burkland........................................81

Figure 14.8: Plots of Density for Zinc-Lead Mineralisation a) Histogram of Density Measurements, b)

Histogram of Calculated Density Values Calculated from Zn, Pb and Ag Grades, and c) Q-Q Plot of

Measured Density against Calculated Density......................................................................................83

Figure 14.9: Histogram of Density Measurements for Burkland Copper Stockwork Zone...................84

Figure 14.10: Example SWATH Analysis for Zn in Burkland Zinc-Lead Mineralisation -1125m to -960m

Levels.....................................................................................................................................................87

Figure 14.11: Zinc-Lead Mineralisation Reconciliation for July 2016 to June 2017..............................89

Figure 14.12: Long Section through Zinkgruvan showing Resource Classification (ZMAB, 2017)........91

Figure 15.1: Long Section Through Nygruvan Area Showing Mineral Reserve Classification ..............97

Figure 15.2: Long Section Through Knalla Area Showing Mineral Reserve Classification ....................97

Figure 15.3: Long Section Through Copper Area Showing Mineral Reserve Classification ..................98

Figure 16.1: Location of Current Mining Areas...................................................................................102

Figure 16.2: Schematic Flow Sheet of the Paste Plant........................................................................110

Figure 16.3: Schematic Paste Distribution System .............................................................................111

Figure 16.4: Control Panel View of Paste Distribution System Control ..............................................111

Figure 16.5: Long-Section Through Nygruvan Zone Showing Mining Plan for 2018 - 2022 ...............117

Figure 16.6: Long-Section Through Sävsjön Zone Showing Mining Plan for 2018 - 2022 ..................117

Figure 16.7: Long-Section Through Western Areas Showing Mining Plan for 2018 – 2022...............118

Figure 16.8: Long-Section Through Burkland Zone Showing Mining Plan for 2018 - 2022 ................118

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Figure 16.9: Long-Section Through Burkland Copper Stockwork Zone Showing Mining Areas for 2018 -

2022 ....................................................................................................................................................119

Figure 16.10: Schematic Ventilation system.......................................................................................121

Figure 16.11: Schematic Drill Water (2017)........................................................................................122

Figure 16.12: Schematic Mine Water Management (2017) ...............................................................123

Figure 17.1: Crushing Flowsheet.........................................................................................................128

Figure 17.2: Grinding Circuit ...............................................................................................................130

Figure 17.3: Zinc-Lead and Copper Flotation Flowsheets..................................................................131

Figure 17.4: Zinc-Lead Ore Plant Throughput and Head Grade.........................................................135

Figure 17.5: Zinc-Lead Ore Recoveries of Zinc and Lead ....................................................................136

Figure 17.6: Zinc and Lead Concentrate Grades .................................................................................136

Figure 17.7: Copper Plant Throughput and Head Grade ....................................................................137

Figure 17.8: Copper Plant Recovery and Concentrate Grade.............................................................138

Figure 18.1: Location of Enemossen TSF ............................................................................................142

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1 SUMMARY

1.1 Introduction

Wardell Armstrong International Limited (“WAI”) was commissioned by Lundin Mining Corporation

(“Lundin”) to prepare an updated Technical Report in accordance with the disclosure requirements of

Canadian Securities Administrators’National Instrument 43-101, Standard of Disclosure for Mineral

Projects (“NI 43-101”) to disclose recent information about the Zinkgruvan underground polymetallic

base metal mine (“Zinkgruvan”), located in south-central Sweden. This includes an updated Mineral

Resources and Mineral Reserves estimate.

WAI undertook a technical due diligence of the Zinkgruvan mine and this study considered all aspects

of the Mineral Resources and Mineral Reserves estimates, including licencing, exploration, geology,

mining, processing, economics, and environmental and social issues, in accordance with guidelines of

the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) “CIM Definition Standards For

Mineral Resources and Mineral Reserves” 2014.

Lundin is a base metals mining company that produces copper, nickel, zinc and lead at four mines

operated by indirect subsidiaries in Portugal (Neves-Corvo Mine), Chile (Candelaria Mining Complex),

United States of America (Eagle Mine) and Sweden (Zinkgruvan Mine). In addition, Lundin indirectly

holds an equity stake in the Freeport Cobalt Oy business which includes a cobalt refinery located in

Kokkola, Finland. The Zinkgruvan mine is owned and operated by Zinkgruvan Mining AB (“ZMAB”) a

100% subsidiary of Lundin.

1.2 Description & Location

The Zinkgruvan polymetallic base metal mine is located in south-central Sweden, 175km west-

southwest of Stockholm and 210km northeast of Göteborg. The mine is situated in the southwest of

the Bergslagen mining district and is located 15km southeast of the town of Askersund. The Zinkgruvan

mine has a long history of production dating back to 1857 and the area has an excellent transport

network with international airports at Stockholm and Göteborg.

ZMAB holds three mining concessions and comprise the Zinkgruvan Mining Concession, the

neighbouring Klara Mining Concession and the Marketop Mining Concession. The Zinkgruvan Mining

Concession and the Klara Mining Concession cover the deposit and its immediate area. The Marketop

Mining Concession is located 40km east of Zinkgruvan, however no recent exploration or exploitation

has been undertaken on this mining concession. ZMAB also holds five exploration concessions which

surround the Zinkgruvan property and comprise the Dalby Hytta nr 1 Exploration Concession, the

Flaxen nr 1 Exploration Concession, the Hjortonmossen nr 1 Exploration Concession, the Orkaren nr 2

Exploration Concession and the Hövdingamon nr 2 Exploration Concession.

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1.3 Geological Setting & Mineralisation

The Zinkgruvan deposit is located in the southern part of the Bergslagen province of south-central

Sweden. The province comprises a Proterozoic aged (1.9 Ga) greenstone belt and hosts massive Zn-

Pb, Cu and Ag sulphide ores and banded iron formations. The supracrustal rocks are dominated by

felsic metavolcanics successions with limestones and calcsilicates commonly found within the

metavolcanics. The province was folded and metamorphosed to upper amphibolite facies during the

Svecofennian orogeny (1.9-1.8 Ga).

The Zinkgruvan deposit comprises a stratiform, massive Zn-Pb deposit situated in an east-west striking

synclinal structure within the lower Proterozoic Svecofennian supracrustal sequence (1.90 Ga - 1.88

Ga). The deposit exhibits distinctive stratification and extends for more than 5,000m along strike and

to depths of 1,600m. The orebody thickness ranges from 3m to 40m. In the central part of the deposit

the zinc-lead mineralisation is stratigraphically underlain by a substratiform copper stockwork.

Deformation during the Svecofennian orogeny included isoclinal folding resulting in the stratigraphy

of the area being overturned. A regional north-northeast to south-southwest trending fault (the Knalla

fault) is present in the centre of the property and separates the deposit into two areas. The Nygruvan

area, which provided most of the historical mine production, is located to the east and strikes

northwest to southeast and dips subvertically to the northeast. The Knalla area is located to the west

of the fault and strikes northeast to southwest and dips variably to the northwest. The Knalla area is

further sub-divided into the following areas from northeast to southwest: Burkland, Lindängen (now

predominantly depleted by mining), Sävsjön, Mellanby, Dalby, Cecilia and Borta Bakom.

1.4 Exploration

To date a total of 3,908 underground drill holes for 580,938m and a total of 193 surface drill holes for

113,037m have been completed. The drilling has defined nine mineralised zones comprising Nygruvan,

Burkland, Burkland Copper Stockwork Zone, Lindängen, Sävsjön, Mellanby, Dalby, Cecilia and Borta

Bakom. All drilling is by diamond core drilling.

1.5 Mineral Resource Estimates

Mineral Resource estimation for the purpose of this Technical Report was undertaken by ZMAB and

reviewed by WAI. Mineral Resource estimation involved the usage of drill hole and geological mapping

data to construct three dimensional wireframes to define mineralised domains. Samples were

selected inside these wireframes, coded and composited. Boundaries were treated as hard with

statistical and geostatistical analysis conducted on composites identified in individual domains. Grades

were estimated into a geological block model representing each mineralised domain. Grade

estimation was carried out predominantly by ordinary kriging. Estimated grades were validated

globally, locally, and visually prior to tabulation of the Mineral Resource estimates. Reconciliation

indicates that the resource models perform well when compared to plant production data.

Mineral Resources are as defined by the CIM. The effective date of the Mineral Resource estimate is

June 30, 2017. A summary of the Mineral Resource statement is shown in Table 1.1 and Table 1.2.

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The stated Mineral Resource estimates are not materially affected by any known environmental,

permitting, legal, title, taxation, socio-economic, marketing, political or other relevant issues, to the

best knowledge of the authors. There are no known mining, metallurgical, infrastructure, or other

factors that materially affect this Mineral Resource estimate, at this time.

Table 1.1: Total Mineral Resources for Zinc Zones at Zinkgruvan

(Average Cut-Off Grade of 3.68% Zn Equivalent)

ResourceClassification

Tonnage(Kt)

Grade Metal

Zn(%)

Pb(%)

Ag(g/t)

Zn(Kt)

Pb(Kt)

Ag(Moz)

Measured 7,269 10.0 3.8 86 727 276 20

Indicated 8,399 8.7 3.7 82 731 311 22

Measured +Indicated

15,668 9.3 3.7 84 1,458 587 42

Inferred 9,431 8.5 3.5 81 802 330 25Notes:

1. Mineral Resources are reported in accordance with the guidelines of the CIM Definition Standards for Mineral Resources and Mineral Reserves (2014);

2. Mineral Resources are reported using a zinc equivalent cut-off grade based on a NSR breakeven price;

3. Metal prices used in the NSR evaluation are US$2.75/lb for copper, US$1.00/lb for zinc, US$1.00/lb for lead, and US$15.0/oz for silver. A silver price of $4.11/oz is used in the

calculation of NSR to reflect the royalty payment to Silver Wheaton;

4. Mineral Resources are not Mineral Reserves until they have demonstrated economic viability based on a feasibility study or pre-feasibility study;

5. Mineral Resources are reported inclusive of any Mineral Reserves;

6. Grade represents estimated contained metal in the ground and has not been adjusted for metallurgical recovery and;

7. Numbers may not add due to rounding.

Table 1.2: Total Mineral Resources for Copper Zones at Zinkgruvan

(Cut-Off Grade of 1.0% Cu)


Tonnage(Kt)

Grade Metal

Cu(%)

Zn(%)

Ag(g/t)

Cu(Kt)

Zn(Kt)

Ag(Moz)

Measured 4,357 2.3 0.3 32 100 13 4

Indicated 619 2.1 0.4 36 13 2 1

Measured +Indicated

4,976 2.3 0.3 32 113 16 5

Inferred 193 2.3 0.3 25 4 1 0.2Notes:






1.6 Mining and Mineral Reserves

Mineral Reserves

The Mineral Reserve estimate for the Zinkgruvan deposit is classified in accordance with the CIM

Definition Standards for Mineral Resources and Mineral Reserves (2014). The effective date of the

Mineral Reserve estimate is June 30, 2017. A summary of the Mineral Reserve statement is shown in

Table 1.3 and Table 1.4.

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Table 1.3: Total Mineral Reserves for Zinc Zones at Zinkgruvan



Tonnage(Kt)

Grade Metal

Zn(%)

Pb(%)

Ag(g/t)

Zn(Kt)

Pb(Kt)

Ag(Moz)

Proven 8,100 7.4 3.0 68 602 241 18

Probable 3,801 6.7 2.7 51 253 101 6

Proven +Probable

11,901 7.2 2.9 63 855 342 24

Notes:

1. Mineral Reserves are as defined by CIM Definition Standards for Mineral Resources and Mineral Reserves (2014);

2. Mineral Reserves are reported using a zinc equivalent cut-off grade based on a NSR breakeven price;



4. Modifying factors used include the use of NSR and mining cut-off values in defining the extraction (stope) shapes, along with dilution and recovery in the mining process;

5. The NSR is calculated on a recovered payable basis taking in to account copper, lead, zinc and silver grades, metallurgical recoveries, prices and realisation costs;

6. Mining, processing and administrative costs were estimated based on actual costs; and


Table 1.4: Total Mineral Reserves for Copper Zones at Zinkgruvan



Tonnage(Kt)

Grade Metal

Cu(%)

Zn(%)

Ag(g/t)

Cu(Kt)

Zn(Kt)

Ag(Moz)

Proven 4,375 1.8 0.2 25 78 9 4

Probable 877 2.0 0.2 29 18 2 1

Proven +Probable

5,252 1.8 0.2 26 96 11 4

Notes:


2. Modifying factors used include the use of mining cut-off values in defining the extraction (stope) shapes, along with dilution and recovery in the mining process;



Mine Engineering

The Zinkgruvan mine was developed in 1857 as an underground mine with the orebody at that time

outcropping at surface. It is currently known to extend to 1,600m below surface and is open at depth.

Mine access is currently via three shafts, with the principal P2 shaft providing ore and waste rock

hoisting and labour access to the -800m and -850m levels. The “daylight” ramp connects the surface

and the underground working through the “western areas”, providing direct vehicle access to the

mine.

A system of internal ramps is employed to access and hence exploit Mineral Reserve below the shaft.

The shafts and ramps provide for ventilation, electrical and compressed air reticulation, materials

handling and ore and waste handling.

The mine is highly mechanised, uses the best available technologies to control operations and uses

longhole panel and sub level bench stoping throughout the mine. All stopes are backfilled with either

cemented paste tailings or waste rock. Mining has reached the -1,300m level.

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1.7 Mineral Processing, Metallurgical Testing and Recovery Methods

The existing plant has been treating zinc-lead ores since 1977 and uses the conventional processing

technologies of crushing, grinding, flotation and concentrate dewatering to produce separate lead and

zinc concentrates. In 2010, a copper circuit was commissioned to produce copper concentrate using a

separate grinding, flotation and dewatering circuit.

The plant also produces paste from the tailings for underground backfill.

The zinc-lead and the copper ores are both relatively easy to process and have resulted in good

metallurgical performances. The zinc-lead ore responds favourably to beneficiation with recoveries of

zinc and lead being typically 90% and 83%, respectively. Copper recovery from the copper ore has

been in excess of 88% since the circuit was commissioned. The quality of all concentrate is uniformly

high and they are readily accepted by customers, although silica levels in the zinc concentrate have

been penalised on occasion and have, at times, neared the maximum range stated in some of the

smelting agreements.

Significant improvements have been made to the crushing plant in recent years by simplifying the

circuit and de-coupling the plant from the mine hoist system. A significant proportion of the zinc-lead

ore is now fed to the AG mill as is, without the need for pre-screening and pebble crushing.

In 2017 a second AG mill was installed which can treat either copper or zinc-lead ores. Copper ore

throughput is 60-65 tph and commissioning trials of the second SAG mill with the zinc-lead ore were

in progress during the WAI site visit. Daily peak tonnages of over 4,000 tpd, while processing zinc-lead

ore through both AG mills have been registered since then.

The ores to the west of the Knalla area are reported to contain a more iron rich sphalerite which may

result in slightly lower zinc grade in the zinc concentrate produced. Testwork programmes are being

undertaken to determine what modifications to the plant’s reagent regime may be required to

optimally treat these ores.

1.8 Infrastructure

The site is serviced by high quality state roads, secure high voltage electricity supply, fresh water,

telecommunications, and operations are supported by a local and national logistics supply chain

ensuring highly efficient site activities with minimal need for site based warehousing. The integration

of suppliers extends to delivery of goods directly to the underground logictics hubs.

Tailings

The annual production of tailings is approximately 1.1Mtpa with 35% used as mine backfill and 65%

disposed at the Enemossen Tailings Storage Facility (TSF), located about 4km south from the

processing plant,

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A new TSF has been constructed directly east of the existing TSF, known as the Enemossen East TSF

which was designed and constructed under the supervision of Knight Piésold Ltd.

1.9 Environmental Studies, Permitting and Social or Community Impact

The mining licence for Zinkgruvan has recently been extended for the extraction and processing of up

to 1.5Mtpa (with a maximum of 1.2Mtpa of zinc-lead ore and 0.5Mtpa of copper ore).

ZMAB has established plans for the continuous monitoring and management of water, waste, air

quality, biodiversity, Health and Safety and stakeholder engagement. These plans are updated to

reflect changes to business needs and Lundin corporate-level standards for environmental and social

management, which are commensurate with international best practice standards.

The operations infrastructure, including access roads and energy sources, meets best practice

requirements and general housekeeping, safety and security standards at the mine are compliant with

international best practice. ZMAB maintain positive relations with local communities through informal

and formal stakeholder engagement activities, including through community initiatives and

continuous interaction via social media.

1.10 Capital and Operating Costs

The forecast operating cost for 2018 for the mine is 278.1SEK/t. The operating cost is therefore

US$34.8/t at an exchange rate of US$0.125 per 1SEK.

The forecast operating cost for 2018 for the mineral processing plant is 132.9SEK/t. The operating cost

is therefore US$16.6/t at an exchange rate of US$0.125 per 1SEK.

As part of maintaining an efficient and effective operating plant, ZMAB have allocated a sustaining

capital budget of 22,500 KSEK between 2018 and 2022. The budget estimate is to an accuracy of +/-

25% and is based on ZMAB in-house experience. The sustaining capital budget includes a provision for

an upgrade to the backfill paste plant and distribution lines, ongoing raises of the Enemossen East TSF,

upgrades to the concentrate handling facilities and continued noise reduction programmes. The

budgeted processing plant capital expenditures for the 2013 and 2016 period as set out in the previous

Technical Report included addition of a new AG grinding mill, which has been successfully installed as

a second hand unit. The construction of a new TSF has also been completed.

Sustaining capital in the mine includes on-going horizontal and vertical development necessary to

achieve the mine schedule, infill diamond drilling, together with mobile and other equipment

replacement programmes. A total of 1,180,379 KSEK is forecast to be spent over the next 5 years. This

is an increase from the previous 5 years, reflecting both increased renewal of mine equipment and

the expansion of mine operations in the western areas of the underground operations.

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1.11 Economic Analysis Results

Companies which are active and current producers of saleable product issuing a NI 43-101 Technical

Report may exclude the information required under Section 22 for Technical Reports on properties

unless the Technical Report includes a material expansion of current production. The Lundin Annual

Report can be found at: http://www.lundinmining.com/s/Investors.asp

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2 INTRODUCTION

This Technical Report has been prepared by WAI in accordance with the disclosure requirements of NI

43-101 to disclose recent information about the Zinkgruvan mine, located in south-central Sweden.

This includes an updated Mineral Resources and Mineral Reserves estimate.

Lundin is a base metals mining company that produces copper, nickel, zinc and lead at four mines

operated by indirect subsidiaries in Portugal (Neves-Corvo), Chile (Candelaria Mining Complex), United

States of America (Eagle Mine) and Sweden (Zinkgruvan Mine). In addition, Lundin indirectly holds an

equity stake in the Freeport Cobalt Oy business which includes a cobalt refinery located in Kokkola,

Finland. The Zinkgruvan mine is operated by ZMAB a 100% subsidiary of Lundin.

A technical due diligence of the Zinkgruvan operation was undertaken by WAI. This study considered

all aspects of the mine including licencing, geology, exploration, mining, mineral processing,

economics, and environmental and social issues. Mineral Resource and Mineral Reserve estimation,

for the purposes of this Technical Report, was undertaken by ZMAB and reviewed by WAI. The Mineral

Resource and Mineral Reserve estimates are reported in accordance with the CIM standard

referenced in NI 43-101. This Technical Report has been prepared in accordance with the

requirements of Form 43-101F1.

2.1 Independent Consultants

WAI has provided the mineral industry with specialised geological, mining and mineral processing

expertise since 1987, initially as an independent company, but from 1999 as part of the Wardell

Armstrong Group (WA). WAI’s experience is worldwide and has been developed in the coal and

metalliferous mining sector.

Our parent company is a mining engineering/environmental consultancy that services the industrial

minerals sector from nine regional offices in the UK and international offices in Almaty, Kazakhstan

and Moscow. Total worldwide staff compliment is in excess of 400.

WAI, its directors, employees and associates neither has nor holds:

Any rights to subscribe for shares in Lundin either now or in the future;

Any vested interests in any mining or exploration concessions (“licences”) held by

Lundin;

Any rights to subscribe to any interests in any of the licences held by Lundin either

now or in the future;

Any vested interests in either any licences held by Lundin or any adjacent licences; or

Any right to subscribe to any interests or licences adjacent to those held by Lundin,

either now or in the future.

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WAI’s only financial interest is the right to charge professional fees at normal commercial rates, plus

normal overhead costs, for work carried out in connection with the investigations reported here.

Payment of professional fees is not dependent either on project success or project financing.

WAI has a demonstrated track record in undertaking independent assessments of Mineral Resources

and Mineral Reserve estimates, project evaluations and audits, MERs and independent feasibility

evaluations to bankable standards on behalf of exploration and mining companies and financial

institutions worldwide.

2.2 Qualified Persons, WAI Review and Site Visit

Qualified Persons from WAI who have reviewed the Mineral Resource and Mineral Reserve estimates

and supervised the production of this report are as follows:

Richard Ellis, BSc, MSc (MCSM), CGeol, EurGeol, FGS, Principal Resource Geologist;

Philip King, BSc, CEng, FIMMM, Technical Director of Mineral Processing; and

Tim Daffern, BEng, CEng, MBA, FIMMM, FAusIMM, MSME, MCIM, ACSM, Consulting

Engineer

These consultants are considered to be independent Qualified Persons according to the definitions

given in NI 43-101. The responsibilities of WAI during the preparation of the different sections of this

Technical Report are shown in Table 2.1.

Table 2.1: Authors Responsibilities

Author Responsible for Preparation of Section/s

Richard Ellis 1. Summary; 2. Introduction; 3. Reliance on Other Experts; 4. Property

Description and Location; 5. Accessibility, Climate, Local Resources,

Infrastructure and Physiography; 6. History; 7. Geological Setting and

Mineralisation; 8. Deposit Types; 9. Exploration; 10. Drilling; 11. Sample

Preparation, Analyses and Security; 12. Data Verification; 14. Mineral Resource

Estimates; 23. Adjacent Properties; 24. Other Relevant Data and Information;

25. Interpretation and Conclusions; 26. Recommendations; 27. References

Philip King 1. Summary; 13. Mineral Processing and Metallurgical Testing; 17. Recovery

Methods; 18. Project Infrastructure; 19. Market Studies and Contracts; 24.

Other Relevant Data and Information; 25. Interpretation and Conclusions; 26.

Recommendations; 27. References

Tim Daffern 1. Summary; 15. Mineral Reserve Estimates; 16. Mining Methods; 18. Project

Infrastructure; 19. Market Studies and Contracts; 20. Environmental Studies,

Permitting and Social or Community Impact; 21. Capital and Operating Costs;

22. Economic Analysis; 24. Other Relevant Data and Information; 25.

Interpretation and Conclusions; 26. Recommendations; 27. References

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Other WAI consultants who contributed to this report included:

Stuart Richardson, BSc MSc IEng ACSM MCSM, Senior Mining Engineer;

Edvard Glücksman, BA, BSc, MSc, PhD, CSci, GradMIMMM, Senior Environmental and

Social Specialist; and

Andrew Beveridge, BSc, ACSM, FGS, MAusIMM, Principal Geotechnical Engineer.

A site visit to the Zinkgruvan Property was undertaken by Richard Ellis, Philip King, Tim Daffern and

Edvard Glücksman between October 10 to October 11, 2017, covering aspects related to licencing,

geology, exploration, QA/QC, mineralogy, mining, laboratory testwork, mineral processing, access and

infrastructure and environmental and social issues.

2.3 Units and Currency

All units of measurement used in this report are metric unless otherwise stated. Tonnages are

reported as metric tonnes (“t”), precious metal values in grams per tonne (“g/t”) or parts per million

(“ppm”).

Unless otherwise stated, all references to currency or “US$” are to United States Dollars (US$).

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3 RELIANCE ON OTHER EXPERTS

This Technical Report has been prepared by WAI on behalf of Lundin Mining Corporation (“Lundin”)

for which WAI has wholly relied upon the data presented by Lundin Mining Corporation in formulating

its opinion. The information, conclusions, opinions, and estimates contained herein are based on:

Information made available to WAI by Lundin and ZMAB at the time of preparing this

Technical Report including previous internal and external reports (on the varied

disciplines) prepared by or for Lundin on Zinkgruvan; and

Assumptions, conditions, and qualifications as set forth in this Technical Report.

WAI have not carried out any independent exploration work, drilled any holes or carried out any

sampling and assaying at the various project areas.

The authors have not reviewed the land tenure situation and have not independently verified the legal

status or ownership of the properties or any agreements that pertain to the licence areas. The results

and opinions expressed in this report are based on the authors’field observations and assessment of

the technical data supplied by Lundin.

The metallurgical, geological, mineralisation, exploration techniques and certain procedural

descriptions, figures and tables used in this report are taken from reports prepared by others and

provided to WAI by Lundin.

Though WAI is confident that the opinions presented are reasonable, a substantial amount of data has

been accepted in good faith. Whilst WAI has endeavoured to validate as much of the information as

possible, WAI cannot be held responsible for any omissions, errors or inadequacies of the data

received. WAI has not conducted any independent verification or quality control sampling, or drilling.

WAI has not undertaken any accounting, financial or legal due diligence of Zinkgruvan or the

associated company structures and the comments and opinions contained in this Technical Report are

restricted to technical and economic aspects associated with Zinkgruvan.

WAI has not undertaken any independent testing, analyses or calculations beyond limited high level

checks intended to give WAI comfort in the material accuracy of the data provided. WAI cannot accept

any liability, either direct or consequential for the validity of information that has been accepted in

good faith.

Except for the purposes legislated under applicable Canadian securities laws, any use of this Technical

Report by any third party are at that party’s sole risk.

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4 PROPERTY DESCRIPTION AND LOCATION

The Zinkgruvan mine is located in south-central Sweden in Närke County at approximately 58°49’N

latitude, 15°06’E longitude. The mine is situated 175km west-southwest of Stockholm and 210km

northeast of Göteborg. While there is a small village called Zinkgruvan surrounding the mine, the

nearest significant communities are Åmmeberg and Askersund, 10km and 15km NW respectively from

the mine. These towns house the majority of the mine employees. Askersund is located at the north

end of Lake Vättern, the second largest lake in Sweden. The largest lake in the country, Lake Vänern,

is some 50km due west of Askersund. The location of the Zinkgruvan property is shown in Figure 4.1.

Figure 4.1: Property Location Map (Geology.com)

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4.1 Mineral Tenure

ZMAB holds three mining concessions, the Zinkgruvan Mining Concession, the neighbouring Klara

Mining Concession and the Marketop Mining Concession. The Zinkgruvan Mining Concession and the

Klara Mining Concession cover the deposit and its immediate area. The Marketop Mining Concession

is located 40km east of Zinkgruvan, however no recent exploration or exploitation has been

undertaken on this mining concession. ZMAB also holds five exploration concessions which surround

the Zinkgruvan property and comprise the Dalby Hytta nr 1 Exploration Concession, the Flaxen nr 1

Exploration Concession, the Hjortonmossen nr 1 Exploration Concession, the Orkaren nr 2 Exploration

Concession and the Hövdingamon nr 2 Exploration Concession. The extent of the licence areas is

shown in Figure 4.2.

Figure 4.2: Location of Licence Areas (SWEREF 99 TM Coordinate System)

Mining Concessions

4.1.1.1 Zinkgruvan Mining Concession

The Zinkgruvan Mining Concession, initially consisted originally of a large number of small mining

rights but was consolidated in 2000 into one concession covering an area of 2.54km2 and is valid until

01 January 2025. If mining continues after these years, the concessions can be extended for periods

of 10 years. The concession provides the rights to extract and process lead, copper, silver and zinc in

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ores. A summary of the licence coordinate locations in the Swedish Coordinate System 1990 (RT90 2.5

gon V) is shown in Table 4.1.

Table 4.1: Coordinates of the Zinkgruvan Mining Concession

Coordinate Point Easting (m) (RT90 2.5 gon V) Northing (m) (RT90 2.5 gon V)

1 1,457,822.1 6,520,732.1

2 1,457,764.9 6,520,905.1

3 1,457,882.0 6,521,127.0

4 1,458,092.0 6,521,201.0

5 1,458,252.0 6,521,673.0

6 1,458,496.7 6,522,047.1

7 1,458,822.1 6,522,071.2

8 1,458,876.1 6,522,158.3

9 1,459,107.8 6,522,624.9

10 1,459,379.4 6,522,488.7

11 1,459,312.0 6,522,345.0

12 1,459,383.0 6,522,310.0

13 1,459,333.0 6,522,204.0

14 1,459,356.0 6,522,081.0

15 1,459,423.0 6,522,061.0

16 1,459,420.0 6,522,055.0

17 1,459,554.0 6,521,991.0

18 1,459,478.0 6,521,832.0

19 1,459,844.0 6,521,675.0

20 1,460,150.0 6,522,400.0

21 1,460,688.1 6,521,345.6

22 1,460,599.2 6,521,349.3

23 1,460,593.7 6,521,229.5

24 1,460,757.8 6,521,157.9

25 1,460,836.5 6,520,974.0

26 1,460,872.3 6,520,989.5

27 1,460,909.1 6,520,807.7

28 1,460,385.2 6,520,700.3

29 1,460,158.7 6,520,807.6

30 1,459,992.7 6,520,744.2

31 1,459,740.8 6,521,410.3

32 1,459,403.6 6,521,286.5

33 1,459,342.1 6,521,453.4

34 1,459,072.5 6,521,591.1

35 1,458,888.6 6,521,292.4

36 1,458,825.3 6,521,269.5

37 1,458,852.2 6,521,185.9

38 1,458,685.5 6,521,127.6

39 1,458,713.6 6,521,042.3

4.1.1.2 Klara Mining Concession

The Klara Mining Concession was granted in 2002 and covers 3.55km2, mainly over the western part

of the deposit and is valid until 18 December 2027. If mining continues after these years, the

concessions can be extended for periods of 10 years. The Klara Mining Concession includes a

restriction stipulating that mining must always be done with a minimum rock cover of at least 150m

and in planned residential areas the cover has to be 400m. This restriction has no impact on mining

because the ore zones in the Klara concession are found at depths below 400m. The concession

provides the rights to extract and process zinc, lead, copper, silver, gold, cobalt and nickel in ores. A

summary of the licence coordinate locations in the Swedish Coordinate System 1990 (RT90 2.5 gon V)

is shown in Table 4.2.

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Table 4.2: Coordinates of the Klara Mining Concession


1 1,457,010.00 6,522,120.00

2 1,458,480.22 6,523,152.74

3 1,459,426.54 6,523,388.86

4 1,459,733.00 6,523,235.50

5 1,459,555.00 6,522,860.00

6 1,460,150.00 6,522,400.00

7 1,459,844.00 6,521,675.00

8 1,459,478.00 6,521,832.00

9 1,459,554.00 6,521,991.00

10 1,459,420.00 6,522,055.00

11 1,459,423.00 6,522,061.00

12 1,459,356.00 6,522,081.00

13 1,459,333.00 6,522,204.00

14 1,459,383.00 6,522,310.00

15 1,459,312.00 6,522,345.00

16 1,459,379.40 6,522,488.70

17 1,459,107.80 6,522,624.90

18 1,458,876.10 6,522,158.30

19 1,458,822.10 6,522,071.20

20 1,458,496.72 6,522,047.10

21 1,458,359.00 6,521,842.00

22 1,458,252.00 6,521,673.00

23 1,458,092.00 6,521,201.00

24 1,457,882.00 6,521,127.00

25 1,457,764.90 6,520,905.10

26 1,457,460.00 6,520,800.00

4.1.1.3 Marketop Mining Concession

The Marketop Mining Concession lies 40km due east of Zinkgruvan, covers an area of 0.70km2 and is

valid until 06 March 2026. No recent exploration or exploitation has been conducted within this

concession. The concession provides the rights to extract and process lead, gold, copper, silver and

zinc in ores. A summary of the licence coordinate locations in the Swedish Coordinate System 1990

(RT90 2.5 gon V) is shown in Table 4.3.

Table 4.3: Coordinates of the Marketop Mining Concession


1 1,497,858 6,524,654

2 1,499,095 6,523,817

3 1,499,014 6,523,698

4 1,499,472 6,523,388

5 1,499,315 6,523,154

6 1,498,084 6,523,986

7 1,498,172 6,524,122

8 1,497,709 6,524,434

Exploration Concessions

The Swedish exploration permit system allows three renewals following the initial granting of an

exploration concession. The initial exploration concession is valid for three years (years 1-3). During

this time if the holder wishes to extend the concession period an application to the Mining

Inspectorate should be submitted. If adequate exploration has deemed to have been undertaken by

the Mining Inspectorate within the concession during the initial three years then a first renewal of the

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concession can be applied for. The first renewal period is for three years (years 4-6). A second renewal

of up to 4 years (years 7-10) can then be applied for if special reasons for the second renewal can be

demonstrated by the applicant (e.g the applicant can demonstrate successful exploration within the

concession). A third renewal of up to 5 years (years 11-15) can be granted by the Mining Inspectorate

if exceptional reasons can be demonstrated and that extensive work has been undertaken within the

concession and that further exploration will likely result in a mining concession.

The holder of an exploration concession can, at any point, withdraw the permit or decide not to renew

the permit. The area of the exploration concession will then be under a one year moratorium period.

During that year no other company can claim that area for exploration purposes.

The holder must by law report all results (drilling results, analyses, geophysical data, soil sampling data

etc.) from exploration to the Mining Inspectorate within three months after termination of the

exploration permit. If requested the exploration data cannot be disclosed by the Mining Inspectorate

for a maximum of four years. After four years the exploration data is made public.

Although not a requirement of the Mining Inspectorate, ZMAB holds a meeting once a year with the

Mining Inspectorate to inform them of ongoing exploration projects.

4.1.2.1 Dalby Hytta nr 1 Exploration Concession

Dalby Hytta nr 1 Exploration Concession covers an area of 7.80km2 and is valid until 1 July 2018. A

summary of the licence coordinate locations in the Swedish Coordinate System 1990 (RT90 2.5 gon V)


Table 4.4: Coordinates of the Dalby Hytta nr 1 Exploration Concession


1 1,455,776.00 6,525,000.00

2 1,455,782.00 6,525,140.00

3 1,455,736.00 6,525,295.00

4 1,455,327.00 6,526,324.00

5 1,455,000.00 6,527,000.00

6 1,455,600.00 6,527,620.00

7 1,456,520.00 6,527,060.00

8 1,458,480.22 6,523,152.74

9 1,457,089.00 6,522,177.00

10 1,456,560.00 6,523,030.00

11 1,456,137.00 6,525,000.00

Zinkgruvan is actively drilling on the Dalby Hytta nr 1 Exploration Concession and will be submitting

an application to convert a large part of the concession to a Mining Concession in early 2018.

4.1.2.2 Flaxen nr 1 Exploration Concession

The Flaxen nr 1 Exploration Concession covers an area of 19.8km2 and is valid until 15 September 2019.

A summary of the licence coordinate locations in the Swedish Coordinate System 1990 (RT90 2.5 g V)


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Table 4.5: Coordinates of the Flaxen nr 1 Exploration Concession

Coordinate Point Easting (m) (RT90 2.5 g V) Northing (m) (RT90 2.5 g V)

1 1,458,480.22 6,523,152.74

2 1,458,133.58 6,523,835.24

3 1,459,550.00 6,525,000.00

4 1,461,430.00 6,523,090.00

5 1,462,360.00 6,523,460.00

6 1,463,600.00 6,523,180.00

7 1,463,420.00 6,522,680.00

8 1,464,360.00 6,520,900.00

9 1,462,765.00 6,519,050.00

10 1,462,035.00 6,517,690.00

11 1,462,825.00 6,517,000.00

12 1,462,825.00 6,516,450.00

13 1,461,660.00 6,517,375.00

14 1,461,180.00 6,518,580.00

15 1,460,575.00 6,518,990.00

16 1,459,992.70 6,520,744.20

17 1,460,158.70 6,520,807.60

18 1,460,385.20 6,520,700.30

19 1,460,909.10 6,520,807.70

20 1,460,872.30 6,520,989.50

21 1,460,836.50 6,520,974.00

22 1,460,757.80 6,521,157.90

23 1,460,593.70 6,521,229.50

24 1,460,599.20 6,521,349.30

25 1,460,688.10 6,521,345.60

26 1,460,150.00 6,522,400.00

27 1,459,555.00 6,522,860.00

28 1,459,733.00 6,523,235.50

29 1,459,426.54 6,523,388.86

Hjortronmossen nr 1 Exploration Concession

The Hjortronmossen nr 1 Exploration Concession covers an area of 5.3km2 and is valid until 24 April

2018. A summary of the licence coordinate locations in the Swedish Reference Frame Coordinate

System 1999, Transverse Mercator (SWEREF 99 TM) is shown in Table 4.6.

Table 4.6: Coordinates of the Hjortronmossen nr 1 Exploration Concession

Coordinate Point Easting (m) (SWEREF 99 TM) Northing (m) (SWEREF 99 TM)

1 498,713 6,530,412

2 499,456 6,529,352

3 499,724 6,529,495

4 500,030 6,529,029

5 500,311 6,527,253

6 499,544 6,527,034

7 497,955 6,527,824

8 497,934 6,529,553

Orkaren nr 2 Exploration Concession

The Orkaren nr 2 Exploration Concession covers an area of 18.9km2 and is valid until 29 September



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Table 4.7: Coordinates of the Orkaren nr 2 Exploration Concession


1 504,190.00 6,528,430.00

2 510,102.32 6,521,042.97

3 508,859.56 6,521,307.90

4 507,934.48 6,520,926.89

5 506,032.42 6,522,813.32

6 504,633.15 6,521,638.07

7 502,982.72 6,524,837.61

8 503,679.10 6,525,240.00

9 503,789.30 6,525,823.00

10 504,424.70 6,525,655.00

11 505,292.50 6,526,154.00

12 503,814.15 6,528,159.29

Hövdingamon nr 2 Exploration Concession

The Hövdingamon nr 2 Exploration Concession covers an area of 5.2km2 and is valid until 29 September



Table 4.8: Coordinates of the Hövdingamon nr 2 Exploration Concession


1 501,460.62 6,524,757.54

2 501,795.60 6,524,085.82

3 502,216.78 6,523,062.26

4 502,264.62 6,522,907.89

5 502,260.31 6,522,767.89

6 502,621.13 6,522,772.23

7 503,067.63 6,520,808.31

8 503,606.63 6,519,962.10

9 503,528.35 6,519,904.18

10 503,994.01 6,518,590.26

11 503,711.00 6,518,860.00

12 503,567.00 6,519,252.00

13 503,209.00 6,519,444.00

14 502,844.00 6,519,227.00

15 501,940.00 6,520,780.00

16 501,292.00 6,523,298.00

17 501,284.00 6,524,653.00

4.2 Surface Rights

The surface land in the concessions areas belong mainly to private individuals. The regulations of the

exploitation concessions involve no particular restrictions on the mining operation.

4.3 Royalties

ZMAB does not pay any mining royalties to the Swedish State.

Under an agreement with Wheaton Precious Metals (formerly Silver Wheaton), the Company has

agreed to deliver all future production of silver contained in concentrate produced from the

Zinkgruvan mine. The Wheaton Precious Metals agreement with the Zinkgruvan mine includes a

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guaranteed minimum delivery of 40 million ounces of silver over an initial 25 year term. If at the end

of the initial term the Company has not met its minimum obligation, it must pay Wheaton Precious

Metals $1.00 for each ounce of silver not delivered. An aggregate total of approximately 21.6 million

ounces has been delivered since the inception of the contract in 2004.

Mining Tax

The corporate taxation rate in Sweden is 22%.

4.4 Environmental Aspects

A summary of the valid environmental permits obtained by ZMAB are detailed in Section 20.

The reclamation provision at the Zinkgruvan mine at December 31, 2016 was $17.1 million (2015 -

$16.1 million). This provision is based on future reclamation costs being settled between 2021 and

2051. The Company has obtained letters of credit related to its site restoration provision.

4.5 Permits

The mine is currently operated under an Environmental Licence granted by the Swedish authorities

for mine life extension and a new tailings management facility at Enemossen East. The application was

submitted to authorities in August 2012 (2015-01-30, case M 2927-12 and case 1421-11) and approved

in January 2015 for the extraction and processing of 1.5Mtpa of ore, including a maximum of 1.2Mtpa

of zinc-lead ore and 0.5Mtpa of copper ore.

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5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY

5.1 Accessibility

The Zinkgruvan property can be reached from Stockholm along highway E18 in a westerly direction

for a distance of 200km to Örebro; from Örebro southward on highway E20 and County Road 50 for a

distance of 50km to Askersund, and then by a secondary paved road for a further 15km through

Åmmeberg to Zinkgruvan. Access to Örebro is also possible by rail and by aircraft on scheduled flights

from Copenhagen amongst other locations.

Askersund is located at the north end of Lake Vättern, the second largest lake in Sweden. The largest

lake in the country, Lake Vänern, is some 50km due west of Askersund. The port of Otterbäcken on

Lake Vänern is about 100km from Zinkgruvan by road. The port of Göteborg on Sweden's west coast

is accessible by lake and canal from Otterbäcken, a distance of some 200km.

There are no major centres of population close to the mine, although several small villages with

populations numbered in the hundreds lie within the Mining Concessions.

5.2 Climate

The warm Gulf Stream in the Atlantic gives Sweden a milder climate than other areas at the same

latitude. Stockholm, the capital, is at almost the same latitude as southern Greenland but has an

average temperature of 18°C in July. The winter temperatures average slightly below freezing and

snowfall is moderate.

Temperature records for Zinkgruvan show that the mean annual temperature is 5.5°C. Mean monthly

temperatures are below freezing from December through March. The coldest month is February, with

an average maximum temperature of -4.1°C and an average minimum of -11.1°C. The warmest month

is August with an average maximum temperature of 18.2°C and an average minimum of 12.2°C. Annual

precipitation is about 750mm, ranging from a low of 11mm in March to a high of 144mm in August.

5.3 Local Resources & Infrastructure

The community of Askersund has a population of about 14,000. The village of Zinkgruvan has about

290 inhabitants. Zinkgruvan is the largest private employer in the municipality with about 340

employees and approximately 100 contractors. Other local economic activities include agriculture,

construction and light service industries. The town of Askersund has a modest tourist industry in the

summer and is a full service community.

The nearest airport is in Örebro with flights to Copenhagen and other centres. Örebro also hosts a

university and considerable light and heavy industry. As with virtually all of southern Sweden there is

an extensive network of paved highways, rail service, excellent telecommunications facilities, national

grid electricity, an ample supply of water and a highly educated work force.

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5.4 Physiography

The property is located in very gently rolling terrain at about 175m above mean sea level ("masl") and

relief in the area is 30m to 50m. The land is largely forest and drift covered and cut by numerous small,

slow moving streams, typical of glaciated terrain and very reminiscent of boreal-forested areas of

Canada such as the Abitibi area of northern Ontario and Quebec. Outcrop is scarce.

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6 HISTORY

6.1 Ownership History

The Zinkgruvan deposit has been known since the 16th century but it was not until 1857 that large

scale production began under the ownership of the Vieille Montagne Company of Belgium.

Vieille Montagne, the world leader in the mining and processing of zinc ores at that time, agreed to

purchase the properties, including mineral rights and extensive surface rights in farm and forest land

and in 1857 a Royal Warrant was issued by the Swedish Crown authorising this purchase by a foreign

company and documenting the terms of operation of the mine.

The first shipment of ore from Zinkgruvan to Belgium was made in 1860. Vieille Montagne

metallurgists, accustomed to treating oxidised ores in carbonate gangues, encountered severe

technical problems in smelting the sulphide ores; however, the problem was eventually solved by the

addition of a roaster on site in 1864. On site processing was carried out at Åmmeberg with its small

port facility on Lake Vättern. From the port, shipments of ore and (later) concentrate were shipped

out through the Swedish lake and canal system to the sea and on to Belgium. An annual ore production

rate of around 300kt was maintained by Vieille Montagne at Zinkgruvan mine until the end of 1976.

From 1976, Vieille Montagne undertook a mine expansion programme at Zinkgruvan. A new main

shaft was sunk to gain access to additional deeper ore and the mining method was modified to allow

for heavier, mechanised equipment. A new concentrator and tailings storage facility were built

adjacent to the mine to replace the existing Åmmeberg facilities. Vieille Montagne brought the new

facilities on line at the beginning of 1977 and the rate of production gradually began to increase

towards the target of 600ktpa, which was achieved in 1982.

In 1990, Vieille Montagne was merged into the Union Miniere group of Belgium, with continued

industrial activities in Åmmeberg and Zinkgruvan through a Swedish branch, Vieille-Montagne

Sweden, which in 1991 was incorporated as a Swedish company, Union Miniere Sverige AB, and in

1994 changed its name to Åmmeberg Mining AB.

In 1995, a wholly-owned subsidiary of North Limited of Australia, North Mining Svenska AB, purchased

Åmmeberg Mining AB and, in turn, the Zinkgruvan mine from the Belgian company Union Minière S.A.

Following the acquisition, in addition to continuation of mining, an aggressive exploration programme

was completed in the immediate and surrounding area. A major reinvestment in the mill on the

Zinkgruvan mine site was completed in 1999.

In 2000, Rio Tinto became the owner of Zinkgruvan when it acquired North Limited. In 2001 Rio Tinto

introduced paste backfill at the mine.

In June 2004, Lundin acquired North Mining Svenska AB and, in turn, Åmmeberg Mining AB and the

Zinkgruvan mine from Rio Tinto. In December 2004, Silver Wheaton (Caymans) Ltd agreed to acquire

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100% of the life of mine payable silver production from the Zinkgruvan mining concessions. The mine

annually produces approximately 1.6Moz of payable silver contained in the lead and zinc concentrate.

In 2005, North Mining Svenska AB and Åmmeberg Mining AB merged to form Zinkgruvan Mining AB,

thereafter the owner and operator of the Zinkgruvan mine. Effective November 30, 2006 Lundin

Mining Corporation merged with EuroZinc, and continued as Lundin Mining Corporation.

In 2010, a surface decline was developed, and mining and processing of copper ores commenced.

6.2 Exploration History

Vieille Montagne operated Zinkgruvan mine from 1857 to 1990 before merging into Union Miniere

which operated the mine until late 1995 when it was indirectly acquired by North Limited of Australia.

During this time, a total of approximately 1,169 drill holes for 209,653m were completed.

Underground drilling focussed on Nygruvan, the upper levels of Burkland, Lindängen and Sävsjön.

Surface drilling focussed on Cecilia and down dip extensions to Cecilia.

From late 1995 until August 2000, under North Limited’s indirect ownership, the mine completed a

total of approximately 490 drill holes for 124,007m. Underground drilling focussed on Burkland, the

lower levels of Nygruvan, the lower levels of Cecilia and Borta Bakom. Underground exploration

drilling which attempted to intersect mineralisation between Sävsjön and Cecilia was also undertaken.

Surface exploration drilling attempted to identify down-dip mineralisation in what is now the Dalby

zone. In addition, North Limited undertook an aggressive regional exploration programme within an

area of 236km2 which included the mine and surrounding area. The regional exploration programme

comprised airborne and ground geophysical surveys, geochemical surveys and geological logging.

In August 2000, Rio Tinto acquired North Limited and, in turn, Zinkgruvan mine which it indirectly

owned and operated until June 2004. During this time, a total of approximately 442 drill holes for

47,625m were completed. Underground drilling focussed on the upper levels of Burkland and the

deepest levels of Nygruvan. Surface drilling focussed on the Borta Bakom deposit and attempted to

identify up-dip mineralisation in this area.

In June 2004, Lundin acquired indirect ownership of the Zinkgruvan mine. Up to June 2017, ZMAB has

completed a total of approximately 2,000 drill holes for 312,690m. Underground drilling focussed on

the deep levels of Nygruvan, Burkland (including the copper stockwork), Mellanby, Dalby and Borta

Bakom. Exploration drifts constructed by Lundin from which to gain drill position, included a 1,600m

exploration drift on the -1,130 level from Burkland to Dalby, a 250m exploration drift through the

hangingwall at Mellanby on the -650m level, a 500m exploration drift through the hangingwall at

Burkland on the -950m level and a 200m exploration drift through the hangingwall at Nygruvan on the

-1,100m level. Surface drilling focussed on identifying near surface along strike extensions of Nygruvan

and most recently on targeting down dip extensions at Dalby.

A summary of the historical exploration drilling by company is shown in Table 6.1.

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Table 6.1: History of Exploration Drilling by Company

Vieille Montagne

(1857–1990)

and Union

Miniere (1990-

Late 1995)

North Limited

(Late 1995-

August 2000)

Rio Tinto

(August 2000-

June 2004)

Lundin Mining

(June 2004-

2017)

Total

Drill

Holes

Length

(m)

Drill

Holes

Length

(m)

Drill

Holes

Length

(m)

Drill

Holes

Length

(m)

Drill

Holes

Length

(m)

Underground 1,108 178,486 482 117,660 413 38,130 1,905 246,661 3,908 580,938

Surface 61 31,166 8 6,347 29 9,495 95 66,029 193 113,037

Total 1,169 209,653 490 124,007 442 47,625 2,000 312,690 4,101 693,975Note: The following drill holes have been used to identify the time of ownership. All drill holes before drill hole number 1203 are assigned to Vieille Montagne and Union Miniere. Drill

hole numbers 1203 to 1759 are assigned to North Limited. Drill hole numbers 1760 to 2279 are assigned to Rio Tinto. All drill holes after drill hole number 2279 are assigned to Lundin.

6.3 Historical Mineral Resources and Mineral Reserves

The mine has typically been successful in replenishing mined out Mineral Resources by upgrading

existing Mineral Resource estimates and delineating new Mineral Resources by drilling. A summary of

the historical Mineral Resource estimates for Zinkgruvan compared with mining production rate is

shown in Figure 6.1. The conversion rate of Measured and Indicated Mineral Resources to Proven and

Probable Mineral Reserves at Zinkgruvan is typically high and for 2017 was 76.0%.

Figure 6.1: Comparison of Zinkgruvan Mineral Resources from 1982 to 2017 and Rate of Mining

Production

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6.4 Production

Production of zinc-lead ore at the Zinkgruvan mine has been continuous since 1857. Production

initially focussed on the Nygruvan area of the mine before progressing to the Lindängen area of Knalla.

More recently production has come from Burkland and the western parts of Knalla including Sävsjön,

Mellanby and Cecilia. In 2010, Lundin commenced mining and processing of copper ores from the

copper stockwork mineralisation located in the structural hangingwall of Burkland. A summary of the

production at Zinkgruvan from 1994 is shown in Table 6.2.

Table 6.2: Zinkgruvan Production by Year from 1994

Zinc/Lead Ore Production Copper Ore Production

Year Ore Processed

(Kt)

Head Grade Zn

(%)

Head Grade Pb

(%)

Head Grade Ag

(g/t)

Ore Processed (Kt) Head Grade Cu

(%)

1994 649 10.4 3.0 66 - -

1995 645 11.1 3.1 71 - -

1996 644 9.5 2.6 62 - -

1997 705 10.4 3.7 83 - -

1998 695 10.8 3.8 85 - -

1999 752 9.5 3.6 78 - -

2000 732 10.9 4.0 102 - -

2001 805 8.4 3.6 84 - -

2002 733 7.2 3.8 90 - -

2003 759 9.3 4.8 103 - -

2004 735 9.1 4.9 99 - -

2005 797 9.4 5.1 95 - -

2006 788 10.3 4.6 93 - -

2007 860 8.3 4.4 85 - -

2008 900 7.9 4.3 82 - -

2009 991 7.5 4.1 82 - -

2010 991 8.0 4.4 87 34 2.2

2011 1,029 8.2 4.0 82 103 1.8

2012 954 9.1 4.4 86 157 2.3

2013 910 8.5 4.2 92 214 1.7

2014 1,063 8.2 3.7 81 167 2.3

2015 1,126 8.3 3.8 79 137 1.7

2016 1,058 8.0 3.5 68 107 2.0

Total 19,321 9.9 4.0 84 919 2.0

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7 GEOLOGICAL SETTING AND MINERALISATION

7.1 Regional Geology

The Zinkgruvan deposit is located in the southern part of the Bergslagen province of south-central

Sweden. The province comprises a Proterozoic aged (~1.9 Ga) greenstone belt and hosts massive zinc-

lead, copper and silver sulphide ores and banded iron formations. The supracrustal rocks are

dominated by felsic metavolcanics successions with limestones and calcsilicates commonly found

within the metavolcanics. The province was folded and metamorphosed to upper amphibolite facies

during the Svecofennian orogeny (1.9 to 1.8 Ga).

The district comprises a series of small proximal basins in a continental rift environment. The active

extensional stage was characterised by felsic volcanism and intrusions followed by subsidence and

sedimentation in volcano-sedimentary complexes. The nature of the metasediments suggests that ore

formation took place in a subsiding marine basin at the end of a volcanic period, distal to volcanic

centres. The hydrothermal solutions were generated by convective circulation of sea water in the

volcanic rock pile. Deep fault fractures initiated the convection cell and formed, within the 1,000m

thick rock pile, numerous vent areas and mineralised zones.

The location of the Zinkgruvan deposit within the regional geology is shown in Figure 7.1.

Figure 7.1: Location of Zinkgruvan and Regional Geology

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7.2 Property Geology

The Zinkgruvan deposit comprises a stratiform, massive zinc-lead deposit hosted by K-rich

metatuffites with intercalated beds of marble, dolomite and fine grained quartzite. A zone of stratified

disseminated pyrrhotite mineralisation occurs 100m stratigraphically above the zinc-lead

mineralisation while in the central part of the deposit the zinc-lead mineralisation is stratigraphically

underlain by a substratiform copper stockwork.

The deposit is situated in an east-west striking synclinal structure within the lower Proterozoic

Svecofennian supracrustal sequence (1.90 Ga to 1.88 Ga). The deposit exhibits distinctive stratification

and extends for more than 5km along strike and to depths of 1,600m. Deformation during the

Svecofennian orogeny included isoclinal folding which has resulted in the stratigraphy of the area

being overturned. The property geology is also divided into two distinct areas by the regional north-

northeast to south-southwest trending Knalla fault. These areas, which make up the Zinkgruvan

deposit, are known as Nygruvan area and Knalla area. The Nygruvan area is bounded to the east by

the Sinsberg fault beyond which felsic metavolcanics and early orogenic granites are encountered. The

Knalla area is bounded to the west by the Dalby fault beyond which post-orogenic granites are

encountered. The geology of the Zinkgruvan area along with the location of Nygruvan and Knalla areas

is shown in Figure 7.2.

Figure 7.2: Geology of the Zinkgruvan Area

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Stratigraphy

The supracrustal rocks are divided into the following lithostratigraphic groups (oldest to youngest):

Metavolcanic group in the lower part of the stratigraphy;

Metavolcanic-sedimentary group;

Metasedimentary group, which occupies the highest stratigraphic position of the supracrustal

rocks in the Zinkgruvan area; and

Intrusive and contact metamorphic rocks.

An example of the stratigraphic sequence at Zinkgruvan is shown in Figure 7.3.

Figure 7.3: Stratigraphic Sequence at Zinkgruvan

7.2.1.1 Metavolcanic Group (Quartz – Microcline)

The metavolcanic group comprises mainly massive, fine-grained, red, felsic metavolcanic rocks which

are in part quartz-microcline porphyritic with a low (5%) biotite content. They occur mainly in the

northern part of the area. Some of the rocks in the metavolcanic group are assumed to have an

ignimbritic origin.

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7.2.1.2 Metavolcanic-Sedimentary Group (Mine Package)

The rocks of the metavolcanic-sedimentary group are composed of mixed, chemically precipitated,

and tuffaceous metasediments. The major rock type in this group is a metatuffite, which is commonly

well banded and sometimes extremely finely laminated. Calc-silicate rocks, marbles, calc-silicate-

bearing quartzites, quartzitic tuffaceous metasediments and sulphide ores are intercalated with the

metatuffites. All of these rocks are intruded by metabasic sills and dykes.

Most of the mineralisation in the district is associated with the metavolcanic-sedimentary group. At

Zinkgruvan the economically significant mineralisation comprises the main zinc-lead mineralisation,

situated in the upper part of the metavolcanic-sedimentary group and the copper (chalcopyrite)

stockwork mineralisation, situated in the middle part of the metavolcanic-sedimentary group and

hosted by dolomitic marbles. Additional mineralisation associated with the metavolcanic-sedimentary

group comprises, disseminated pyrrhotite in garnet-bearing siliceous beds of primary exhalative origin

in the uppermost part of the group and a number of small zones of zinc-lead mineralisation.

7.2.1.3 Metasedimentary Group (Metasediments)

The metasedimentary group contains mainly argillic, clastic metasediments, which have a high biotite

content (>30%). They are strongly recrystallised and transformed to veined gneisses. In upper parts of

the stratigraphy these have been migmatised and have undergone some anatexis to form grey,

medium grained, biotite-rich, massive granitoids.

7.2.1.4 Intrusive and Contact Metamorphic Rocks

During the early stages of the orogeny 1.87 to 1.85 Ga, differentiated, I-type granitoids, ranging from

gabbro to granite in composition intruded the Svecofennian sequence. From 1.84 Ga until 1.77 Ga

further intrusion occurred, forming late orogenic, undifferentiated, S-type plutons and dykes

associated with migmatites, comprising granites, aplites and a large number of pegmatites. Finally,

post-orogenic granites belonging to the north-northwest trending Transscandinavian granite-

porphyry belt created a large volume of granitic intrusion about 1.73 Ga.

Structural Geology

As a result of repeated deformation during the Svecofennian orogeny, the relatively incompetent

supracrustal rocks were isoclinally folded together with the more competent, primorogenic granitoid

massifs. The metamorphism is low-pressure, upper amphibolite facies with migmatisation and partial

melting of the biotite-rich rocks in the metasedimentary group. Sillimanite and cordierite are common

index minerals in these rocks. The low biotite rocks of the metavolcanic-sedimentary group, which

underwent the same high-temperature metamorphism exhibit well preserved, recrystallised, primary

bedding.

The deformation during the Svecofennian orogeny resulted in the stratigraphy being overturned such

that the stratigraphic footwall (oldest) now forms the structural hangingwall.

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Regional deformation ended before regional metamorphism, as the late orogenic granites have not

been affected by the regional deformation. The later granites of the Transscandinavian granite-

porphyry belt have deformed the country rock during their intrusion, causing a local folding parallel

to subparallel to their margins.

Brittle fracturing is marked by north-northeast trending fault systems resulting in large-scale block

movements between sections of the country rock. The Knalla fault, separating the Nygruvan and

Knalla areas of the Zinkgruvan deposit is an example of such a fault. Movements of several hundred

metres are occasionally observed along such faults. These fault systems postdate an east trending

dolerite dyke swarm, which has an age of about 1.53 Ga.

7.3 Description of Mineralised Zones

The Nygruvan and Knalla areas of the Zinkgruvan deposit are located on both flanks of a synclinal

structure and separated by the Knalla fault. The Nygruvan area is located to the east of the Knalla fault

and provided the majority of the historical production at Zinkgruvan. The Nygruvan area strikes

generally northwest to southeast and dips subvertically to the northeast. The Knalla area is located to

the west of the fault and generally strikes northeast to southwest and dips variably to the northwest.

The Knalla area is further structurally sub-divided into the following mineralised zones, from northeast

to southwest: Burkland, Sävsjön, Mellanby, Dalby, Cecilia and Borta Bakom. In addition, the Lindängen

zone occurs close to surface above Burkland and Sävsjön on the longitudinal section and was exploited

earlier in the mine’s life. The location of the mineralised zones at Zinkgruvan is shown in Figure 7.4.

Figure 7.4: Location of Mineralised Zones at Nygruvan and Knalla Areas of Zinkgruvan

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Nygruvan Area

The Nygruvan area of the mine consists of a tabular zinc-lead orebody, striking northwest to southeast

and dipping 60° to 80° to the northeast and with a near-vertical plunge. The orebody persists to at

least 1,600m vertical depth and ranges in thickness from 5m to 25m. Towards the eastern part of the

Nygruvan area, the orebody splits and is present as two parallel mineralised zones separated by 3m

to 8m of metatuffite (quartz, microcline, biotite, and minor muscovite, chlorite and epidotic). The

metatuffite is a homogenous, usually massive, quartz-microcline-biotite rock of rhyolitic to dacitic

composition. It has a granoblastic texture and is often gneissic. The stratigraphy of the metavolcanic-

sedimentary group is best developed in the eastern part of the Nygruvan area where the sequence is

thickest. Metabasic sills and dykes intruding the metavolcanic and the sedimentary group are the

oldest intrusions. Dykes and irregular, massive, grey, usually coarse-grained pegmatites of granitic

composition are relatively common in the folded areas.

There is clear evidence of hydrothermal alteration in the mine sequence. Altered rocks have been

heavily depleted of Mg, Mn and Fe, although there is some disagreement regarding Mn depletion.

Sodium depletion is less evident in the mine area, although the Na/K ratio decreases upwards through

the footwall sequence of progressively more altered metatuffite. There is significant enrichment in Ba,

K, S and Ca.

Sphalerite and galena are the dominant sulphide minerals. They generally occur as massive, well

banded and stratiform layers. Chalcopyrite is present in small amounts (<0.2% Cu). Pyrrhotite, pyrite

and arsenopyrite are present although the amount of pyrrhotite and pyrite is typically low (<1% each).

Metamorphism and deformation have mobilised galena into veins and fissures sub-parallel to original

bedding in places. Native silver was even more mobile and is often found in small fissures.

Remobilisation is most commonly observed in the lead-rich western part of Nygruvan and the

Burkland zone of Knalla. In both the Nygruvan and Knalla areas there is an increase in zinc-lead grades

towards the stratigraphic hanging wall of the massive sulphide horizon. Contacts of the mineralisation

with the host stratigraphy are generally very sharp, more so on the stratigraphic hangingwall than

footwall.

A plan view showing the geology of the Nygruvan area at the -650m level is shown in Figure 7.5 and a

geological cross section through the Nygruvan area is shown in Figure 7.6.

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Figure 7.5: Plan View showing the Geology of Nygruvan Area

Figure 7.6: Geological Cross Section through Nygruvan Area

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Knalla Area

The Knalla area comprises several tabular zones of zinc-lead mineralisation (Burkland, Sävsjön,

Mellanby, Dalby, Cecilia and Borta Bakom) which form a continuous, although highly contorted

orebody with variable thickness (3m to 40m). In addition, a copper stockwork zone is also present in

the structural hanging wall of the Burkland zone. The Knalla area generally strikes northeast to

southwest (although quite variable locally) and dips generally to the northwest. Dips are variable from

near vertical to sub-horizontal. Plunges are also variable with the Burkland zone plunging moderately

to the northeast and Cecilia and Dalby plunging to the northwest. The Burkland zone extends from

200m to 1,600m vertically and flattens considerably at depth. The overall structure of the Knalla area

is more complex than at Nygruvan and structural thickening is common. There are often two to four

parallel ore horizons separated by narrow widths of metatuffite.

The significant difference in the zinc-lead mineraliation from that found at Nygruvan is that the Knalla

area contains elevated levels of Co and Ni. These levels are sufficiently elevated as to impact on

metallurgy and concentrate quality.

The copper stockwork zone located in the structural hanging wall of the Burkland zone is best

developed at depths between 700m and 1,100m. It has a strike length of 100m to 180m while the

width varies from 5m up to 60m with an average around 20m. Between 1,100m and 1,200m depth

the thickness of the mineralisation decreases to 10m. Above the -600m level the copper stockwork

zone reduces in thickness before pinching out. The copper stockwork zone is cut off laterally to the

northeast by the Knalla fault and has been closed off by drilling to the southwest. The host rock is a

dolomitic marble with variable amounts of porphyroblastic Mg-silicates. Chalcopyrite is the main

copper mineral and occurs as fine-grained disseminations infilling between dolomite grains or massive

lumps and irregular veins up to several cm thick. Cubanite (CuFe2S3) is also present and occurs as

lamellae in chalcopyrite. Bornite is present, while tetrahedrite is rare. Minor amounts of arsenopyrite

are found locally. In its footwall plunge the copper stockwork sometimes merges with the Burkland

zinc-lead mineralisation which results in significant amounts of sphalerite and some galena at the

contact of these two zones.

A plan view showing the geology of the Burkland zone at the -800m level is shown in Figure 7.7 and a

geological cross section through the Lindängen and Sävsjön zones is shown in Figure 7.8.

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Figure 7.7: Plan View showing the Geology of Burkland Zone including Copper Stockwork

Figure 7.8: Geological Cross Section through Lindängen and Sävsjön Zones

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8 DEPOSIT TYPES

8.1 Mineral Deposit Type

General consensus exists on a syngenetic-exhalative origin for the Zinkgruvan deposit in which lenses

of polymetallic (Zn, Pb, Ag (and Cu)) sulphides formed at or near the seafloor in submarine hot spring

environments. They formed from accumulations of the focussed discharges of metal-enriched fluids

associated with seafloor hydrothermal convection, potentially associated with areas of active

submarine volcanism including rift spreading centres.

The formation in the Zinkgruvan area of a local, relatively deep sub-basin structure, such as a half

graben coincided with the transition from active to waning volcanism and volcaniclastic sedimentation

to deposition of a post-volcanic succession of limestone, reworked volcanic ash and then deep water

sediments (Allen et al., 1996). Deposition within the basin may have promoted development of a

reduced environment and relatively starved of detrital sedimentation. Such an environment would

have been favourable for preservation of organic matter and accumulation and preservation of base

metal sulphides. Venting of metalliferous oxidised brines into the sub-basin may have triggered Cu

deposition during interaction with organic matter and/or reduced pore waters below the sea floor,

and formation of the stratiform Zn-Pb-Ag ore upon exhalation, cooling and mixing with reduced

bottom waters in a brine pool on the sea floor (Jansson et al., 2017). At Zinkgruvan, proximal volcanic

rocks are separated from the ore by an interval containing several thick former limestone horizons

indicating that considerable time passed between emplacement of the volcanic unit and ore

formation. Syn-sedimentary faults are likely to have acted as major feeders to the mineralisation.

The genetic model for the formation of the Zinkgruvan deposit is shown in Figure 8.1.

Figure 8.1: Genetic Model for the Zinkgruvan Deposit (Jansson et al., (2017))

The exact classification of the Zinkgruvan deposit is somewhat unclear due to the high-grade

metamorphism and ductile deformation overprint that occured during the Svecofennian orogeny (1.9

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- 1.8Ga). As such the deposit has characteristics associated with volcanogenic massive sulphide (VMS)

deposits, sediment-hosted Zn (SEDEX) deposits, Broken Hill-type (BHT) deposits and VMS-SEDEX

hybrids. Recent work by Jansson et al., (2017) concluded that the ore fluid composition was most

similar to a McArthur-type SEDEX system, where-as the regional and local stratigraphy and

volcanotectonic setting are more similar to some BHT and VMS deposits. Regardless of the exact

classification of the Zinkgruvan deposit it is considered that an oxidised ore-forming brine at a near-

neutral pH fluid and a redox trap at the site of deposition were key components of its genesis.

8.2 Exploration Model

The nature of ore-forming fluids, trapping mechanisms and the footprint of the hydrothermal systems

differ fundamentally among SEDEX, BHT and VMS deposits with significant implications for exploration

strategies. If a VMS type volcanotectonic setting is considered for Zinkgruvan (Jansson et al., (2017))

then studies of many VMS districts worldwide and analogous studies of mineralisation on the modern

sea floor enable some criteria for targeting similar deposits.

Knowledge of the genesis, as well as, the subsequent deformation events is key in creating an

exploration model for targeting Zinkgruvan style deposits.

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9 EXPLORATION

9.1 Near Mine Exploration

Drilling is the principle means of near mine exploration. Three main types of drilling are carried out by

ZMAB and comprise stope definition drilling, infill drilling and exploration drilling. These are further

discussed in Section 10. Exploration drives and detailed underground geological mapping are also used

by ZMAB for near mine exploration.

9.2 Regional Exploration

Prior to the purchase of the mine by North Limited regional exploration had not been a priority. In

1995, North Limited began an aggressive regional exploration programme. A heliborne magnetic and

radiometric survey covering an area of 223km2 including the mine site and immediate area was carried

out, a GEOTEM AEM survey covering an area of 236km2 was flown, extensive ground geophysical

surveys including Mag, HLEM and IP were undertaken while geological mapping, conventional till

sampling and MMI geochemical surveying were also carried out. A number of possible targets were

identified by North Limited during the exploration programme, however none of these were tested

by drilling and no further work was undertaken on them prior to North Limited being purchased by

Rio Tinto in 2000. Since 2000, exploration has predominantly been focussed on near mine targets

rather than regional. In 2017, Lundin acquired two new exploration concessions, the Orkaren nr 2

Exploration Concession and the Hövdingamon nr 2 Exploration Concession located to the northwest

of the mine and plan to increase regional exploration in the Zinkgruvan area.

9.3 Future Exploration

In 2017 a significant increase in exploration drilling was initiated by Lundin and ZMAB. The main

targets of underground drilling in 2017 included the deep levels of Burkland and Nygruvan, Mellanby,

Borta Bakom and Dalby. The main target of surface drilling in 2017 and 2018 is Dalby which by the end

of 2017 will have six surface drilling rigs operational in this area. A summary of the budgeted

exploration meterage for drilling and exploration drives in 2017 and 2018 is shown in Table 9.1.

Table 9.1: Exploration Budget for 2017 and 2018

Forecast 2017 2018

Expensed

Diamond Drilling 51,200m 43,000m

Exploration Drives 543m 900m

Capitalised

Diamond Drilling 21,300m 28,000m

Exploration Drives 205m -

Total

Total Diamond Drilling 72,500m 71,000m

Total Exploration Drives 748m 900m

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10 DRILLING

Three main types of drilling are carried out by ZMAB and comprise stope definition drilling, infill drilling

and exploration drilling. All drilling at Zinkgruvan is by diamond drill core and is undertaken using both

surface and underground drilling methods.

Underground stope definition drilling is carried out ahead of production to further delineate the

boundaries of the mineralised zone and aid stope design positioning. Drilling typically produces small

diameter AQ sized drill core. The drill core is whole core sampled and assayed at the ZMAB analytical

laboratory. Stope definition drilling is not included by ZMAB for the purposes of Mineral Resource

estimation.

Underground infill drilling is a continuous activity and carried out within existing mineralised zones to

upgrade resource classification and further define footwall/hangingwall contacts ahead of production.

Infill drilling is included by ZMAB for the purposes of Mineral Resource estimation.

Exploration drilling by underground and surface drilling is undertaken to identify extensions to existing

mineralisation and new mineralised zones. Surface drilling campaigns have been important over the

years in stepping out beyond existing development to explore extensions to mineralisation such as at

Dalby. Underground exploration drilling is aided by development drives that are constructed to

provide drill position for intersecting the orebody. Exploration drilling is included by ZMAB for the

purposes of Mineral Resource estimation.

Underground drilling is typically undertaken from fans based on 30m to 50m spacing, whereas surface

drilling is typically undertaken on 100m spacing or greater. Drill sections are orientated along profiles

which vary based on the location of the mineralisation within the overall synclinal structure of the

Zinkgruvan deposit. The profiles are generally orientated perpendicular to the general strike of the

individual zone.

Both surface an underground drilling are undertaken by contactors. Currently four underground drill

rigs are used and comprise two Sandvik rigs and two Atlas Copco rigs. The rigs are platform mounted

and can be relocated by front end loader. All underground drilling is performed by the contractor

Drillcon. Five surface drill rigs are currently being used to target the Dalby mineralisation and comprise

four Sandvik rigs and one Atlas Copco rig. Four of the surface drill rigs are operated by Drillcon while

the other is operated by the contractor Rockma. The surface drill rigs are capabale of drilling depths

of up to 1,600m.

Within the current licence areas and as of June 30, 2017, a total of 3,908 underground drill holes for

580,938m have been completed and 193 surface drill holes for 113,037m have been completed. A

summary of the surface and underground drilling completed at Zinkgruvan is shown in Table 10.1. All

drilling was conducted by diamond core drilling.

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Table 10.1: Summary of Drilling at Zinkgruvan

Vieille Montagne

(1857–1990)

and Union

Miniere (1990-

Late 1995)

North Limited

(Late 1995-

August 2000)

Rio Tinto

(August 2000-

June 2004)

Lundin Mining

(June 2004-

2017)

Total

Drill

Holes

Length

(m)

Drill

Holes

Length

(m)

Drill

Holes

Length

(m)

Drill

Holes

Length

(m)

Drill

Holes

Length

(m)

Underground Drilling

Nygruvan 675 87,386 98 28,553 47 10,596 386 65,791 1,206 192,327

Burkland 122 37,982 238 51,819 345 23,879 1,196 126,124 1,901 239,805

Lindängen 258 38,013 33 4,777 13 2,200 8 1,155 312 46,144

Sävsjön 53 15,104 51 18,076 - - 64 5,846 168 39,027

Mellanby - - - - - - 55 10,218 55 10,218

Cecilia - - - - - - 34 13,891 34 13,891

Borta Bakom - - 51 10,298 8 1,455 42 5,846 101 17,599

Dalby - - 11 4,136 - - 120 17,791 131 21,928

Regional - - - - - - - - - -

Total 1,108 178,486 482 117,660 413 38,130 1,905 246,661 3,908 580,938

Surface Drilling

Nygruvan 1 42 - - 4 2,264 42 10,256 47 12,562

Burkland - - - - - - - - - -

Lindängen 4 375 - - 10 552 - - 14 927

Sävsjön 2 1,288 - - - - - - 2 1,288

Mellanby 9 6,448 - - - - 9 8,430 18 14,878

Cecilia - - 4 3,908 2 2,802 26 30,816 32 37,525

Borta Bakom 36 18,118 - - - - - - 36 18,118

Dalby 8 4,336 - - 5 3,270 - - 13 7,606

Regional 1 620 4 2,439 8 608 18 16,526 31 20,194

Total 61 31,166 8 6,347 29 9,495 95 66,029 193 113,037Note: The following drill holes have been used to identify the time of ownership. All drill holes before drill hole number 1203 are assigned to Vieille Montagne and Union Miniere. Drill hole

numbers 1203 to 1759 are assigned to North Limited. Drill hole numbers 1760 to 2279 are assigned to Rio Tinto. All drill holes after drill hole number 2279 are assigned to Lundin.

10.1 Drilling by Vieille Montagne (1857-1990) and Union Miniere (1990-Late 1995)

From 1857 to 1990, Vieille Montagne operated Zinkgruvan mine before merging into Union Miniere

group of Belgium, who continued operating until late 1995. The oldest drill hole contained in the

current drill hole database is DDH 3 and was drilled by Vieille Montagne in 1937. Since this time a total

of approximately 1,108 underground drill holes for 178,486m and a total of approximately 61 surface

drill holes for 31,166m were completed by Vieille Montagne and Union Miniere. Underground drilling

focussed on Nygruvan, the upper levels of Burkland, Lindängen and Sävsjön. Surface drilling focussed

on Cecilia and down dip extensions to Cecilia.

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10.2 Drilling by North Limited (Late 1995-August 2000)

From late 1995 until August 2000, North Limited undertook an aggressive underground exploration

drilling programme and completed a total of approximately 482 underground drill holes for 117,660m.

In addition, a total of approximately 8 surface drill holes for 6,347m were also completed.

Underground drilling focussed on Burkland, the lower levels of Nygruvan, the lower levels of Cecilia

and Borta Bakom. Underground exploration drilling also attempted to intersect any mineralisation

found between Sävsjön and Cecilia. Surface exploration drilling attempted to identify down-dip

mineralisation in what is now the Dalby zone.

10.3 Drilling by Rio Tinto (August 2000-June 2004)

In 2000, Rio Tinto became the owner of Zinkgruvan when it acquired North Limited. During this time,

a total of approximately 413 underground drill holes for 38,130m were completed and a total of

approximately 29 surface drill holes for 9,495m were completed. Underground drilling focussed on

the upper levels of Burkland and the deepest levels of Nygruvan. Surface drilling focussed on the Borta

Bakom zone and attempted to identify up-dip mineralisation in this area. A systematic QA/QC

programme was implemented by Rio Tinto during 2001 for all future geological samples. This QA/QC

programme was fully operational during 2002.

10.4 Drilling by Lundin Mining (June 2004-2017)

In June 2004, Lundin acquired North Mining Svenska AB and, in turn Zinkgruvan. In 2005, North Mining

Svenska AB and Åmmeberg Mining AB merged to form Zinkgruvan Mining AB, thereafter the owner

and operator of the Zinkgruvan mine. Effective November 30, 2006 Lundin Mining Corporation

merged with EuroZinc, and continued as Lundin Mining Corporation. Since operating the Zinkgruvan

mine, Lundin have completed a total of approximately 1,905 underground drill holes for 246,661m

and a total of approximately 95 surface drill holes for 66,029m. Underground drilling focussed on the

deep levels of Nygruvan, Burkland (including the copper stockwork), Mellanby, Dalby and Borta

Bakom. Surface drilling focussed on identifying near surface along strike extensions of Nygruvan and

most recently on targeting deep down dip extensions at Dalby. Drilling under Lundin is still ongoing to

date.

10.5 Drill Core Diameter

Currently underground and surface drill core is typically of 56mm diameter (NTW). Historically drill

core sizes of 28-36mm for underground drilling and 28-39mm for surface drilling were also used.

10.6 Drill Core Recovery

Host lithologys and sulphide mineralisation at Zinkgruvan are generally very competent and as such

drill core recovery is not systematically recorded during drill hole logging as core recoveries

encountered are consistently around 100%. Inspection of drill core by WAI confirmed that there are

no material issues resulting from the drill core recovery.

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10.7 Extent of Drilling

To date drilling has defined nine mineralised zones and comprise Nygruvan, Burkland, Burkland

Copper Zone, Lindängen (now predominantly mined out), Sävsjön, Mellanby, Dalby, Cecilia and Borta

Bakom with a combined total strike length of over 5,000m and to depths of up to 1,600m from surface.

10.8 Drill Hole Collar Surveys

Surveying of drill hole collar locations, surface and underground, is done by the mine survey team

using Leica system equipment. The instruments used are TS15, TS16 and MS50.

10.9 Downhole Surveys

Drill holes over 100m in length are surveyed by the mine survey team using a Relex Maxibor or Reflex

Gyro instrument with readings taken every 3m.

10.10 Drill Sections

Relevant drill sections showing the geological interpretation of the Zinkgruvan deposit is contained in

Section 7.3. The location of the surface and underground drill holes within the different licence areas

are shown in Figure 10.1. The Marketop Mining Concession is not shown as no drilling within this

licence is contained within the current drill hole database.

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a) Location of Drill Holes within Licence Areas (Marketop Mining Concession not shown)

b) Inset of a) and Showing Location of Drill Holes within near mine Licence Areas

Figure 10.1: Plan Views Showing Location of Drill Holes and a) Mining and Exploration Concessions

and b) Inset of a) Showing Near Mine Area Only

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11 SAMPLE PREPARATION, ANALYSES, AND SECURITY

All samples are collected by ZMAB geological staff and all sample preparation is undertaken at the

Zinkgruvan mine site facility. From 1979 to 2001 all geological samples were assayed at the Zinkgruvan

laboratory by atomic absorption spectroscopy (“AAS”). In April 2001, ACME Analytical Laboratories

(“ACME”), Vancouver, Canada began to be used for assaying whereby pulp samples were sent for

analysis by ICP-ES with Ag samples above 300ppm assayed by fire assay. Initially ACME were only used

to assay samples from new drilling projects, however by 2002 all geological samples were

subsequently being submitted to ACME for analysis. A systematic QA/QC programme was also

implemented during 2001 for all future geological samples and was fully operational during 2002. The

same drilling, sampling and assaying procedures have been in place at Zinkgruvan since this time.

11.1 Core Sampling

Sampling procedures are the same for both underground and surface drill core. Drill core is removed

from the core barrel and placed into core boxes. Sample intervals are recorded on the core box and

on separators used to define the sample interval. Core boxes are then transported from the drill sites

to the on-site logging facilities at Zinkgruvan mine. The drill core is wetted with water and

photographed. Core recovery is noted if areas of poor core recovery are encountered. Geotechnical

measurements including Q and RMR are taken. The core is geologically logged for lithology, structural

unit, colour, grain size, texture, mineralisation and type (massive, banded and disseminated), habit,

likely anticipated zinc grade (trace (<2%), weak (2-10%), good (10-25%) and very good (>25%)) and

any additional comments also entered. The logging is undertaken using Prorok® software data entry

module and uploaded to an Oracle® database. Hard copies of the drill hole logs are also kept along

with the drill hole collar locations, down hole survey data and assay results. A summary of the lithology

codes and the stratigraphic sequence at Zinkgruvan are shown in Table 11.1.

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Table 11.1: Summary of Stratigraphic Sequence and Lithology Codes

Formation Code Sub-Formation Code Lithology Member Code Lithology

Viksjön Formation

(Metasediments)

V Biotite leptite unit Vb Biotite leptite,

migmatite

a Va Garnet biotite

quartzite

Pyrrhotite-leptite

Garnet biotite

quartzite unit

Vab Garnet biotite quartzite

Pyrrhotite leptit unit Vaa Pyrrhotite leptit

Zinkgruvan

Formation

(Mine Package)

Z Upper leptite Ze Leptite, marble,

calc silicate and

skarn

d Zed Layered leptite

Workshop marble ZeV Marble, skarn and

intercalated leptite

Quartzite unit Zec Quartzite

b Zeb Layered leptite

Marble-skarn

layered leptite unit

Zea Marble-skarn layered leptite

with intercalated marble and

leptite

Footwall skarn ZeL Diopside skarn, marble PbS-

ZnS-FeS impregnation

Zinc ore unit Zd Zinc ore zone Main ore ZdH Zinc ore (primary)

a Zda Leptite between the main ore

and the parallel ore zone

Parallel ore ZdP Zinc ore released to leptite

with zinc impregnation

Middle leptite Zc Leptite

intercalated with

marble and skarn

b Zcb Leptite, gneissic-veiny

a Zca Leptite intercalated with

marble skarn

Carbonate rock unit Zb Marble,

dolostone

Marble unit Zbc Carbonate rock in some places

with strong magnetite

impregnation

b Zbb Carbonate rock, often

phlogopite speckled with

intercalated leptite

Dolostone unit Zba Dolostone in some places with

chalcopyrite

Lower leptite Za Intercalated

leptite, marble

and skarn

Isåsen Formation

(Quartz-

Microcline)

L Upper quartz

feldspar leptite unit

lb Grey, quartz

feldspar leptite

Lower quartz

feldspar leptite unit

la Red, quartz

feldspar leptite

A geologist is responsible for determining and marking the intervals to be sampled, selecting them

based on lithology, sulphide content, mineralisation or structural logging. Sample intervals are marked

on the boxes and core using a lumber crayon. Sampling is undertaken from top to bottom of the drill

hole. Currently a maximum sample length of 2m is used while historically sample lengths of up to 3.5m

were allowed.

Core sample intervals selected for analyses are halved with splitting performed by an Almonte® core

saw in such a way that two equal halves of core are produced. The half core sample is then placed in

a heavy-duty sample bag with identifying sample tags. Samples are then dispatched for sample

preparation. Remaining half drill core is returned to the core box for archive and storage in the on-site

warehouse located adjacent to the core logging facility.

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11.2 Bulk Density Determination

Specific gravity (SG) is measured systematically over the full sample intervals. For each sample interval,

all core fragments larger than 5cm in length are collected and used to measure specific gravity using

a weight in air and weight in water method using a dedicated electronic balance.

11.3 Sample Preparation

Sample preparation is carried out on-site at the Zinkgruvan. Jaw crushing is undertaken in a facility

located adjacent to the core loging facility while all further stages of sample preparation are

undertaken within a section of the Zinkgruvan analytical laboratory.

The core is first dried and then crushed to <5mm using a jaw crusher. Following crushing, the sample

is split using a Jones Riffle splitter to produce a 100-150g sample. Prior to 2002 a Tema mill was

employed for grinding and produced samples of <38 micron. From 2002 onwards, an automated

Herzog pulveriser has been employed and produces samples of <36 microns. Cleaning of the pulveriser

is automatically carried out after each sample run using compressed air and water. The sample is then

split to provide a 40g pulp sample (10g prior to 2008) which is placed in labelled paper bags and packed

into cardboard boxes prior to shipping to the analytical laboratory.

11.4 Analysis

From 1979 to 2001 all geological samples were assayed at the Zinkgruvan analytical laboratory using

AAS. In April 2001, ACME began to be used for assaying whereby pulp samples were sent for analysis

by ICP-ES. All samples with Ag values above 300ppm were subsequently assayed by fire assay. By 2002

all geological samples were subsequently being sent to ACME for analysis.

Zinkgruvan Analytical Laboratory (1979-2002)

From 1979 to 2002, all geological samples were assayed at the Zinkgruvan analytical laboratory by AAS

(with the exception of any samples submitted by Rio Tinto for new projects from April 2001 to 2002

which were assayed at ACME).

Samples were analysed at the Zinkgruvan analytical laboratory for Pb, Zn, Ag, Cu, Fe, Co, and Ni, with

samples subjected to two separate digestions:

250mg of pulp was boiled in 10ml of HNO3. HF was added and boiled off the sublimate

being re-dissolved in HCL; the sample was then diluted to 250ml in H2O and analysed

for Zn, Pb, Ag, Cu, and Fe by AAS; and

500mg of pulp was boiled in 15ml of aqua regia; the solution was reduced before

being dissolved in H2O to analyse for Co and Ni by AAS.

The Zinkgruvan analytical laboratory detection limits for AAS analysis are shown in Table 11.2.

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Table 11.2: Zinkgruvan Analytical Laboratory - AAS Detection Limits For Geological Samples

Element Detection Limit

Zn 0.05 %

Pb 0.05 %

Ag 5 g/t

Cu 5 ppm

Fe 0.02 %

Co 5 ppm

Ni 5 ppm

Analytical results were collected manually and entered by hand, first on the original request for

analysis, and then entered manually into Excel® spreadsheets with the same format as the request for

analysis. Data were entry checked by the laboratory personnel before release to the project geologists.

The project geologist then checked the correspondence between the assay results and the geological

logging before the data were approved for incorporation in the drillhole database.

ACME Analytical Laboratories (2002-2017)

Since 2002, all geological samples have been assayed at ACME where approximately 40g of pulp

sample (10g prior to 2008) are shipped. The laboratory run assays using ICP-ES where 1g of pulp is

diluted in 100ml of aqua regia which is then submitted for ICP-ES to analyse for 23 elements: Zn, Pb,

Ag, Cu, Co, Ni, Al, As, Bi, Ca, Cd, Cr, Fe, Hg, K, Mg, Mn, Mo, Na, P, Sb, Sr, and W. ACME detection limits

for ICP-ES analysis for the main elements are shown in Table 11.3. Ag assays reporting over 300ppm

are submitted for fire assay analysis using a 30g charge.

Table 11.3: ACME ICP-ES Method Detection Limits

Element Detection Limit

Ag 2 g/t

Co 0.001 %

Cu 0.001 %

Fe 0.01 %

Ni 0.001 %

Pb 0.01 %

Zn 0.01 %

11.5 Sample Security and Chain of Custody

Sample collection and transportation of drill core is undertaken by ZMAB geology department staff.

Exploration core boxes are transported to the core logging facilities located at the Zinkgruvan mine

site where there is sufficient room to layout and examine several drill holes at a time. Once logging

and sampling have been performed, the core is transferred to the permanent storage facility located

adjacent to the core logging facility. The drill core boxes are covered. The on-site storage facility is dry

with internal lighting and metal shelving for core storage. Pulp duplicate material is stored in a

separate building located adjacent to the jaw crushing facility.

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11.6 Quality Assurance and Quality Control Programmes

The implementation of a quality assurance / quality control (QA/QC) programme is current industry

best practice and involves establishing appropriate procedures and the routine insertion of certified

reference material, blanks and duplicates to monitor the sampling, sample preparation and analytical

process. Analysis of QA/QC data is made to assess the reliability of sample assay data and the

confidence in the data used for the estimation.

From 1979 to 2001 all geological samples were assayed at the Zinkgruvan analytical laboratory. No

systematic QA/QC programme was in place during this time. In April 2001, ACME were used as the

primary assay laboratory. Initially ACME were used to assay only samples from new drilling projects,

however by September 2002 all geological samples were subsequently being sent to ACME for

analysis. A systematic QA/QC programme was also implemented during 2001 and was fully

operational during 2002. The same QA/QC procedures have been in place at Zinkgruvan since 2001

and includes insertion of duplicates, standards and blanks into the sample stream prior to shipment

to ACME. External assay checks are carried out by ALS Chemex, Vancouver. The results of the assaying

are continually reviewed by Zinkgruvan geological staff. Where any failed values are detected the

three primary samples either side of this sample are re-submitted for analysis.

QA/QC performance is continually monitored by the ZMAB geological department. To ascertain levels

of precision and accuracy and to identify if there are any sampling errors the geological department

undertakes the following statistical analysis:

Thompson and Howarth Plot (Precision Pairs), showing the mean relative percentage

error of grouped assay pairs across the entire grade range, used to visualise precision

levels by comparing against given control lines;

Rank HARD Plot, which ranks all assay pairs in terms of precision levels measured as

half of the absolute relative difference from the mean of the assay pairs (HARD). Used

to visualise relative precision levels to determine the percentage of the assay pairs

population occurring at a certain precision level;

Relative Difference Plots, allows negative or positive differences to be calculated. This

plot gives an overall impression of precision and also shows whether or not there is

significant bias between the assay pairs by illustrating the mean percentage half

relative difference between the assay pairs (mean HRD); and

Correlation Plots, plot of the value of the primary assay against the duplicate assay.

This plot allows an overall visualisation of precision and bias over selected grade

ranges. Correlation coefficients are also used;

QQ Plots and PP Plots, plot comparing quantiles of the primary assay against the

duplicate assay to determine the populations have a common distribution (QQ plot),

plot of empirical cumulative distribution function and theoretical cumulative

distribution function (PP plot); and

Shewhart X Charts, control charts used to monitor SRM performance in comparison

to the upper and lower standard deviation boundaries and the mean of the data set.

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The following sections provide a summary of the QA/QC analysis for samples submitted by ZMAB from

2013 to 2017.

Internal Duplicates

Pulp duplicate analysis results are compared to the primary assays to monitor analytical precision as

well as any potential bias in the process caused by improper cutting of the sample in the case of core,

homogeneity, washing during the cutting or loss of fines during preparation. Pulp duplicate samples

are inserted into the sample stream at a frequency varying from between every 21st and every 25th

sample for analysis by ACME.

Summary plots of the primary and duplicate analysis for zinc from 266 pulp samples analysed at ACME

are shown in Figure 11.1.

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a) Correlation Plot – Zn (ACME) vs Zn (ACME) b) Relative Difference Plot - Zn (ACME) vs Zn (ACME)

c) QQ Plot - Zn (ACME) vs Zn (ACME) d) PP Plot - Zn (ACME) vs Zn (ACME)

e) Precision Pairs Plot - Zn (ACME) vs Zn (ACME) f) Rank HARD Plot - Zn (ACME) vs Zn (ACME)

Figure 11.1: Internal Pulp Duplicate Analysis Plots for Zinc

Summary plots of the primary and duplicate analysis for lead from 232 pulp samples analysed at ACME

are shown in Figure 11.2.

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a) Correlation Plot – Pb (ACME) vs Pb (ACME) b) Relative Difference Plot - Pb (ACME) vs Pb (ACME)

c) QQ Plot - Pb (ACME) vs Pb (ACME) d) PP Plot - Pb (ACME) vs Pb (ACME)

e) Precision Pairs Plot - Pb (ACME) vs Pb (ACME) f) Rank HARD Plot - Pb (ACME) vs Pb (ACME)

Figure 11.2: Internal Pulp Duplicate Analysis Plots for Lead

Summary plots of the primary and duplicate analysis for silver from 238 pulp samples analysed at

ACME are shown in Figure 11.3.

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a) Correlation Plot – Ag (ACME) vs Ag (ACME) b) Relative Difference Plot - Ag (ACME) vs Ag (ACME)

c) QQ Plot - Ag (ACME) vs Ag (ACME) d) PP Plot - Ag (ACME) vs Ag (ACME)

e) Precision Pairs Plot - Ag (ACME) vs Ag (ACME) f) Rank HARD Plot - Ag (ACME) vs Ag (ACME)

Figure 11.3: Internal Pulp Duplicate Analysis Plots for Silver

Summary plots of the primary and duplicate analysis for copper from 257 pulp samples analysed at

ACME are shown in Figure 11.4.

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a) Correlation Plot – Cu (ACME) vs Cu (ACME) b) Relative Difference Plot - Cu (ACME) vs Cu (ACME)

c) QQ Plot - Cu (ACME) vs Cu (ACME) d) PP Plot - Cu (ACME) vs Cu (ACME)

e) Precision Pairs Plot - Cu (ACME) vs Cu (ACME) f) Rank HARD Plot - Cu (ACME) vs Cu (ACME)

Figure 11.4: Internal Pulp Duplicate Analysis Plots for Copper

Blanks

Diabase blanks are inserted at a frequency of between every 21st and 23rd sample to monitor

contamination in the sample preparation and analysis. Summary plots of the blank sample analysis for

320 blank samples by ACME is shown in Figure 11.5.

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a) Blank Analysis for Zn (ACME)

b) Blank Analysis for Pb (ACME)

b) Blank Analysis for Ag (ACME)

b) Blank Analysis for Cu (ACME)

Figure 11.5: Blank Sample Analysis for Zinc, Lead, Silver and Copper

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Standard Reference Material

Four standard reference materials (“SRM’s”) are currently used and are sourced from GeoStats Pty

Ltd. The SRM’s used by ZMAB are shown in Table 11.4 and are inserted into the sample stream

between every 19th and 21st sample.

Table 11.4: GeoStats Standard Reference Materials and Reference Values

Zinc Lead Silver Copper

StandardName

Zn (%)Standard

NamePb (%)

StandardName

Ag (%)Standard

NameCu (%)

915-16 1.955 915-16 0.969 915-16 51.2 915-16 2.296

910-12 4.491 910-12 2.159 910-12 23.5 910-12 0.139

309-16 10.533 309-16 1.476 309-16 225.2 309-16 5.23

310-16 17.02 310-16 11.26 310-16 314.3 310-16 0.345

Summary plots of the SRM analysis for zinc, lead, silver and copper from 191 pulp samples analysed

at ACME are shown in Figure 11.6.

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a) SRM Analysis for Zn (SRM 309-16)

b) SRM Analysis for Pb (SRM 309-16)

c) SRM Analysis for Ag (SRM 309-16)

c) SRM Analysis for Cu (SRM 309-16)

Figure 11.6: SRM Sample Analysis for Zinc, Lead, Silver and Copper for 309-16

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External Duplicate Analysis

External check samples are selected for every 23rd and 27th sample and pulp duplicate samples are

submitted for analysis by ICP at ALS Chemex, Vancouver.

Summary plots of the primary and duplicate analysis for zinc from 117 pulp samples analysed at ACME

and ALS Chemex are shown in Figure 11.7.

a) Correlation Plot – Zn (ACME) vs Zn (ALS Chemex) b) Relative Difference Plot - Zn (ACME) vs Zn (ALS Chemex)

c) QQ Plot - Zn (ACME) vs Zn (ALS Chemex) d) PP Plot - Zn (ACME) vs Zn (ALS Chemex)

e) Precision Pairs Plot - Zn (ACME) vs Zn (ALS Chemex) f) Rank HARD Plot - Zn (ACME) vs Zn (ALS Chemex)

Figure 11.7: External Pulp Duplicate Analysis Plots for Zinc – ACME vs ALS CHEMEX

Summary plots of the primary and duplicate analysis for lead from 99 pulp samples analysed at ACME

and ALS Chemex are shown in Figure 11.8.

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a) Correlation Plot – Pb (ACME) vs Pb (ALS Chemex) b) Relative Difference Plot - Pb (ACME) vs Pb (ALS Chemex)

c) QQ Plot - Pb (ACME) vs Pb (ALS Chemex) d) PP Plot - Pb (ACME) vs Pb (ALS Chemex)

e) Precision Pairs Plot - Pb (ACME) vs Pb (ALS Chemex) f) Rank HARD Plot - Pb (ACME) vs Pb (ALS Chemex)

Figure 11.8: External Pulp Duplicate Analysis Plots for Lead – ACME vs ALS CHEMEX

Summary plots of the primary and duplicate analysis for silver from 107 pulp samples analysed at

ACME and ALS Chemex are shown in Figure 11.9.

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a) Correlation Plot – Ag (ACME) vs Ag (ALS Chemex) b) Relative Difference Plot - Ag (ACME) vs Ag (ALS Chemex)

c) QQ Plot - Ag (ACME) vs Ag (ALS Chemex) d) PP Plot - Ag (ACME) vs Ag (ALS Chemex)

e) Precision Pairs Plot - Ag (ACME) vs Ag (ALS Chemex) f) Rank HARD Plot - Pb (ACME) vs Pb (ALS Chemex)

Figure 11.9: External Pulp Duplicate Analysis Plots for Silver – ACME vs ALS CHEMEX

Summary plots of the primary and duplicate analysis for copper from 117 pulp samples analysed at

ACME and ALS Chemex are shown in Figure 11.10.

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a) Correlation Plot – Cu (ACME) vs Cu (ALS Chemex) b) Relative Difference Plot - Cu (ACME) vs Cu (ALS Chemex)

c) QQ Plot - Cu (ACME) vs Cu (ALS Chemex) d) PP Plot - Cu (ACME) vs Cu (ALS Chemex)

e) Precision Pairs Plot - Cu (ACME) vs Cu (ALS Chemex) f) Rank HARD Plot - Cu (ACME) vs Cu (ALS Chemex)

Figure 11.10: External Pulp Duplicate Analysis Plots for Silver – ACME vs ALS CHEMEX

11.7 Adequacy of Procedures

A systematic QA/QC programme was implemented for all geological samples at Zinkgruvan at the

beginning of 2002. WAI considers that the sample preparation, security and analytical procedures for

all samples sent to both the ACME and ALS Chemex laboratories since this time have been conducted

in accordance with acceptable industry standards and the assay results generated following these

procedures are suitable for use in Mineral Resource estimation. Pior to 2002, no systematic QA/QC

programme was implemented for geological samples. The primary assay laboratory for the majority

of these samples was the Zinkgruvan analytical laboratory. These samples are included in the Mineral

Resource estimate by ZMAB and verification of this methodology is discussed in Section 12.

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12 DATA VERIFICATION

Data entry, validation, storage and database maintenance is carried out by ZMAB geological staff using

established procedures. The data used for Mineral Resource estimation is based on only diamond core

produced from either surface or underground drilling of generally 56mm diameter (NTW) core size.

Grade control drilling based on small diameter drill core is not used in the Mineral Resource estimate.

All data are stored in a central Oracle database located at the ZMAB mine offices. Assay values are

uploaded into the database from Excel worksheets that have been sent from ACME. Prior to uploading

of the assay data, a statistical check of the data is undertaken by ZMAB geological staff. In addition,

the Oracle database has a series of automated validation tools during import and export for error

identification. The database is kept on a server which provides access to the database from both

surface and underground offices. The database also links directly into the mine planning software

(Microstation). The geological database is well structured and is well maintained.

Cut-off dates for the databases used in the Mineral Resource estimate were variable depending on

the deposit and the amount of data available and the time required to update. Generally, the Mineral

Resource estimates were based on the latest possible drill hole data up until June 30, 2017. The

databases were received by WAI in Microsoft® Access format for review.

A summary of the data verification procedures carried out by WAI during the review are detailed

below:

Review of the geological and geographical setting of the Zinkgruvan deposits;

Review of the extent of the exploration work completed to date;

Review of the sampling and sample preparation procedures;

Inspection of the core logging, sampling and storage facilities;

Inspection of selected drill core to assess the nature of the mineralisation and to

confirm geological descriptions;

Inspection of geology and mineralisation in underground workings at Burkland (-

1,300m level), Borta Bakom and Dalby deposits;

Verification that collar coordinates coincide with underground workings or

topographical surfaces;

Verification that downhole survey azimuth and inclination values display consistency;

Evaluation of minimum and maximum grade values;

Evaluation of minimum and maximum sample lengths;

Assessing for inconsistencies in spelling or coding (typographic and case sensitive

errors); and

Ensuring full data entry and that a specific data type (collar, survey, lithology and

assay) is not missing and assessing for sample gaps or overlaps.

The majority of the verification procedures carried out by WAI on the electronic databases confirmed

the integrity of the data in these databases used for the purposes of deriving the Mineral Resource

estimate presented in this document. Minor validation errors were discovered in terms of drill hole

collar locations; however, these are not significant. Due to the current structure of the geology

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database overlapping intervals are present when importing the database into software such as

Vulcan® or Datamine®. It is recommended that the structure of the geology database be reviewed.

WAI considers the drill hole database used in the Mineral Resource estimate to be complete and is

supported by the available information.

Given the operating history of Zinkgruvan and the on-going reconciliation studies, WAI has not

undertaken any independent check analysis of any drill core. WAI have reviewed the current chain of

custody procedures in place and conclude that there are no issues in terms of security of samples.

Limited QA/QC data exists for the historical assaying carried out at the Zinkgruvan analytical laboratory

which was used for the assaying of geological samples prior to 2002 (up to drill hole number 1760).

The impact of these historical samples on the Mineral Resource estimate was assessed by selecting

samples with assay data located within the mineralised zone wireframes. The mineralised zone

wireframes comprised predominantly areas in which unmined Mineral Resources are currently

located. A summary of the drill hole data contained within the mineralised zone wireframes by deposit

and ownership is shown in Table 12.1.

Table 12.1: Summary of Drill Holes within Mineralised Zone Wireframes

Vieille Montagne

(1857–1990)

and Union

Miniere (1990-

Late 1995)

North Limited

(Late 1995-

August 2000)

Rio Tinto

(August 2000-

June 2004)

Lundin Mining

(June 2004-

2017)

Total

Drill

Holes

Length

(m)

Drill

Holes

Length

(m)

Drill

Holes

Length

(m)

Drill

Holes

Length

(m)

Drill

Holes

Length

(m)

Nygruvan 37 342 44 675 23 167 265 3,148 369 4,332

Burkland 57 665 105 1,689 231 2,994 943 13,046 1,336 18,394

Burkland

(Copper

Zone)

1 8 33 279 - - 129 1,183 163 1,470

Lindängen - - - - - - - - - -

Sävsjön 39 312 23 226 3 18 42 347 107 903

Mellanby - - 3 56 - - 55 627 58 683

Cecilia 13 54 22 98 7 36 27 222 69 409

Borta Bakom - - 6 73 1 3 91 665 98 741

Dalby - - - - - - 28 280 28 280

Total 147 1,381 236 3,096 265 3,218 1,580 19,518 2,228 27,212Note: The following drill holes have been used to identify the time of ownership. All drill holes before drill hole number 1203 are assigned to Vieille Montagne and Union Miniere. Drill hole

numbers 1203 to 1759 are assigned to North Limited. Drill hole numbers 1760 to 2279 are assigned to Rio Tinto. All drill holes after drill hole number 2279 are assigned to Lundin.

Drilling data from Vieille Montagne, Union Miniere and North Limited are considered as historical

drilling undertaken before the introduction of a systematic QA/QC programme in 2002. The location

of these data generally corresponds to operational production areas of the mine. Zones containing

low percentages of remaining historical drilling comprise: Nygruvan, Burkland, Burkland Copper Zone,

Mellanby, Borta Bakom and Dalby. Zones containing a higher percentage of remaining historical

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drilling comprise Cecilia and Sävsjön. However, the historical drilling data located in Cecilia and the

eastern part of Sävsjön zone (“Sävsjön East”), are located predominantly in areas which have been

mined out while the western part of Sävsjön deposit (“Sävsjön West”) is classified as predominantly

Inferred Mineral Resources.

Overall, the historical drilling data accounts for only 16% of the total drilling by meterage within the

remaining mineralised zone wireframes and is not considered to significantly impact the Mineral

Resource estimate. This is supported by the operating history of Zinkgruvan and the on-going

operational reconciliation studies. All drilling undertaken since 2002, is considered by WAI to be

sufficiently supported by by QA/QC data.

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13 MINERAL PROCESSING AND METALLURGICAL TESTING

The metallurgical response of the orebodies having historically contributed to the plant feed is well

understood. These sources of ore, namely Nygruvan and Burkland, have been gradually

complemented by other sources from the Knalla district (western areas), located around the

Knallagruvan shaft. These include the Cecilia and Borta Bakom orebodies. In the future, resouces from

Sävsjön and Mellanby are also to be incorporated in the plant feed stream.

In general, it appears that the ores to the west of the areas currently being mined are more difficult

to process, in part due to the sphalerite containing higher levels of iron which results in lower zinc

concentrate grades, and higher amounts of pyrrhotite. Testwork undertaken as part of a MSc. thesis

in 2015 at Lulea University (Kol, 2015) indicated that the iron rich sphalerite in the Knalla area ores

may be more difficult to activate during rougher flotation and also could result in lower zinc

concentrate recoveries. However, the issue of sphalerite activation could be overcome through the

addition of copper sulphate. The mineralogical studies completed to date indicate that there is no

significant difference in the liberation size of the lead and zinc minerals.

In keeping with many other operations, the amount of laboratory testwork that has been undertaken

to date on these complementary and future ore sources is sparse due to the limited availability of the

local metallurgical staff and deficient testing infrastructure. ZMAB plans to develop a more extensive

metallurgical testing facility on site to carry out regular testwork campaigns.

in the meantime, ZMAB have recently commissioned a study with XPS consulting and Testwork

Services (XPS) to investigate the geometallurgical properties of the future ore types utilising existing

drill core samples obtained from the exploration drilling programmes.

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14 MINERAL RESOURCE ESTIMATES

14.1 Introduction

The Mineral Resource estimates discussed in this Technical Report relate to Nygruvan, Burkland,

Burkland Copper Zone, Sävsjön, Mellanby, Dalby, Cecilia and Borta Bakom. The following sections

describe in detail the methodology used to produce these Mineral Resource estimates. All Mineral

Resource estimates were produced by ZMAB and subsequently reviewed by WAI.

14.2 Mineral Resource Estimate Data

Data used by ZMAB for Mineral Resource estimation included underground and surface diamond core

drilling only (exploration and infill). Grade control drilling data was not included for the purposes of

Mineral Resource estimation. Cut-off dates for the databases used in the Mineral Resource estimate

were variable depending on the deposit and the amount of data available and the time required to

update. Generally, the Mineral Resource estimates were based on the latest possible drill hole data

up until June 30, 2017. The databases were received by WAI in Microsoft® Access format for review.

Data Transformations

A local grid system is used by ZMAB that is based on the Swedish Reference Frame Coordinate System

1999, 1500 (SWEREF 99 1500) and is referred to as the mines new local (MNL) system. The SWEREF

99 1500 system is converted to the MNL system by a translation of -152,189.815m to the easting and

a translation of -6,515,043.085m to the northing. An anticlockwise rotation of 54.314° around the

vertical axis about a reference point (“Point 235”) of easting 2,078.062m easting, 6,455.519m northing

and -6.744m elevation is then carried out. The equivalent coordinates of Point 235 in the the SWEREF

99 1500 system are: 154,267.877m easting, 65,267.877m northing and 170.446m elevation. Elevation

in the MNL system is quoted relative to the collar of the P1 shaft which is defined as zero. All elevations

below the P1 shaft collar are therefore quoted as negative. The elevation difference between the

SWEREF 99 1500 system and the MNL system is -177.190m. All drill hole collars, topographic surveys

and mine surveys are stored by ZMAB in the MNL system.

Software

Database import and preparation, wireframing, and compositing were undertaken by ZMAB staff

using Microstation® software. Statistical and variographic analysis were undertaken using Supervisor®

software. Block modelling and grade estimation were undertaken using Prorok® software (a module

of Microstation®). Data used in the Mineral Resource estimates were reviewed by WAI using

Datamine® and Supervisor® software.

Data Valiation

The database was reviewed by WAI and included the following checks. An evaluation of minimum and

maximum grade values and sample lengths, assessing for inconsistencies in spelling or coding

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(typographic or case sensitive errors), ensuring full data entry and that a specific data type (collar,

survey and assay) is not missing, assessing for sample gaps and overlaps and a review of assay

detection limits and identification of problematic assay records. A spatial on-screen review of the

grade and lithology distributions of drill holes was undertaken to identify any exhibiting data reliability

issues. Due to the current structure of the geology database overlapping intervals are present when

importing the database into software such as Vulcan® or Datamine®. It is recommended that the

structure of the geology database be reviewed. Overall, however the database was considered by WAI

to be robust with no significant errors identified. A check on collar locations relative to underground

workings and topography found only minor errors.

Problematic assay values were reviewed and updated by ZMAB prior to resource modelling. Assay

values below the limit of detection were replaced with the detection limit value.

Historical drilling data (produced prior to the introduction of a systematic QA/QC programme in 2002)

are contained in the drill hole database. However, the location of these data generally corresponds to

operational production areas of the mine and account for only 16% of the total drilling by meterage

within the remaining mineralised zone wireframes. These data are not considered to significantly

impact the Mineral Resource estimate as discussed in Section 12. This is supported by the operating

history of Zinkgruvan and the on-going operational reconciliation studies. All drilling undertaken since

2002, is considered by WAI to be sufficiently supported by by QA/QC data. A summary of the overall

drill hole database is shown in Table 14.1.

Table 14.1: Drill Hole Data used for Mineral Resource Estimation

Mineralised Zone TypeNumber ofDrill Holes

Length(m)

Number ofZn Assays

Number ofPb Assays

Number ofAg Assays

Number ofCu Assays

Nygruvan

Underground Drill Holes 1,206 192,327 1,004 1,004 1,004 1,004

Surface Drill Holes 47 12,562 40 40 40 40

Sub Total 1,253 204,889 1,044 1,044 1,044 1,044

Burkland

Underground Drill Holes 1,901 239,805 1,811 1,811 1,811 1,811

Surface Drill Holes - - - - - -

Sub Total 1,901 239,805 1,811 1,811 1,811 1,811

Lindängen

Underground Drill Holes 312 46,144 231 231 231 231

Surface Drill Holes 14 927 5 5 5 5

Sub Total 326 47,071 236 236 236 236

Sävsjön



Sub Total 55 16,332 49 49 49 49

Mellanby



Sub Total 73 25,096 71 71 71 71

Cecilia



Sub Total 66 51,416 48 48 48 48

Borta Bakom



Sub Total 137 35,717 116 116 116 116

Dalby



Sub Total 144 29,534 131 131 131 131

Regional

Underground Drill Holes - - - - - -


Sub Total 31 20,194 15 15 15 15

Grand Total 3,986 670,054 3,521 3,521 3,521 3,521

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The location of drill holes contained in the ZMAB drill hole database are shown in Figure 14.1.

a) Plan View Showing Location of Drill Holes (note – grid system based on the mines new local system)

b) Isometric View Showing Location of Drill Holes

Figure 14.1: Location of Drill Holes in the ZMAB Drill Hole Database

14.1 Geological Interpretation and Domaining

The Zinkgruvan deposit comprises a stratiform, massive zinc-lead deposit hosted by K-rich

metatuffites with intercalated beds of marble, dolomite and fine grained quartzite. In the Burkland

zone of the deposit the zinc-lead mineralisation is stratigraphically underlain by a substratiform copper

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stockwork. The deposit is situated in an east-west striking synclinal structure within the lower

Proterozoic Svecofennian supracrustal sequence (1.90 Ga to 1.88 Ga). The deposit exhibits distinctive

stratification and extends for more than 5km along strike and to depths of 1,600m. Deformation

during the Svecofennian orogeny included isoclinal folding which has resulted in the stratigraphy of

the area being overturned such that the stratigraphic footwall (oldest) now forms the structural

hangingwall. The property geology is also divided into two distinct areas by the regional north-

northeast to south-southwest trending Knalla fault. The Nygruvan area is bounded to the east by the

Sinsberg fault while the Knalla area is bounded to the west by the Dalby fault. The Nygruvan area

strikes generally northwest to southeast and dips subvertically to the northeast. The Knalla area is

located to the west of the fault and generally strikes northeast to southwest and dips variably to the

northwest.

Eight mineralised zones have been identified by ZMAB and comprise Nygruvan, Burkland, Burkland

Copper Zone, Sävsjön, Mellanby, Dalby, Cecilia and Borta Bakom. The Lindängen zone occurs close to

surface above Burkland and Sävsjön and is considered to be predominantly mined out and is therefore

not domained by ZMAB. The location of the mineralised zones at Zinkgruvan constrained by major

mined out areas is shown in Figure 14.2.

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a) Plan View Showing Location of Mineralised Zones (Constrained by Major Mined Out Areas)

b) Isometric View Showing Location of Mineralised Zones (Constrained by Major Mined Out Areas)

Figure 14.2: Mineralised Zones at Zinkgruvan

The geological interpretation used by the ZMAB geological department in the Mineral Resource

estimate was guided by drill hole and geological mapping data where available. The zinc-lead

mineralisation and the copper stockwork mineralisation comprised the principal domains. The zinc-

lead mineralised zones were defined based on a cut-off grade of 3.68% Zn equivalent (based on an

average Net Smelter Return (NSR) value for the mine of 335 SEK Swedish Krona (SEK)/t). Details of the

NSR calculation are given in Section 14.13. The footwall and hangingwall contacts within the zinc-lead

mineralisation are geologically well defined and the cut-off grade therefore generally reflects the

geological contact. A cut-off grade of 1.0% Cu was used to define the copper zone mineralisation. A

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minimum mining width of between 3m and 5m was incorporated into the mineralised zone

wireframes by ZMAB. Given the large difference in density between the zinc-lead mineralisation and

the surrounding waste rock it is recommended that the practice of incorporating a minimum mining

width within the mineralised zone wireframes be reviewed.

Wireframe solids for each mineralised zone and their structural sub-domains were constructed in

Microstation® software. Mineralised zone wireframes were constructed of the full mineralised zone

(inclusive of mined out areas) and were used as the basis of the Mineral Resource estimate. A sub-set

of these wireframes, constrained by major mined out areas, was then used to select the remaining

resource areas for resource classification and more detailed mining depletion.

14.2 Drill Hole Data Processing

The domain wireframes for each mineralised zone were then used to select drill hole samples for

further data processing. The samples were then coded by the principal domains and formed the basis

of the Mineral Resource estimate.

14.3 Grade Capping

Grade capping was only applied to Ag values in the Sävsjön West Viktor (400g/t) and East Wilhem

(340g/t) zones by ZMAB. The presence for any outlier assays was reviewed by WAI using log probability

plots for each mineralised zone and constrained by major mined out areas. Log probability plots for

zinc, lead, silver and copper within the the zinc-lead mineralised zones are shown in Figure 14.3. Log

probability plots for zinc, lead, silver and copper within the copper stockwork mineralised zone are

shown in Figure 14.4. WAI considers that very few significant outlier values are present within the

zinc-lead mineralised domains and as such is reflective of the style of this mineralisation. Potential

minor outlier values for lead and silver are present within the copper stockwork mineralisation,

however do not significantly impact the Mineral Resource estimate.

WAI considers that the absence of grade capping does not represent a risk to the Mineral Resource

estimate.

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a) b)

c) d)

Figure 14.3: Log Probability Plots of Zinc-Lead Mineralisation for Selected Samples for a) Zinc, b)

Lead, c) Silver and d) Copper

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a) b)

c) d)

Figure 14.4: Log Probability Plots of Burkland Zone Copper Stockwork Mineralisation for Selected

Samples for a) Zinc, b) Lead, c) Silver and d) Copper

14.4 Compositing

A 2m composite interval was applied by ZMAB to standardise the sample lengths for both the lead-

zinc mineralisation and the stockwork copper zone. Histograms showing drill hole sample lengths for

the lead-zinc mineralisation and the copper stockwork mineralisation prior to compositing and

constrained by major mined out areas, are shown in Figure 14.5. A maximum sample interval of 2m is

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currently used by ZMAB for sampling for assaying. Historically, however a maximum sample interval

of 3.5m was allowed and is reflected in the minor populations shown above 2m. Going forward, WAI

considers the use of a 2m composite length to be acceptable given that the majority of the drill holes

used in the Mineral Resource estimate are from more recent drilling. De-compositing associated with

the minor populations above 2m that result from historical drilling is considered less significant.

a) b)

Figure 14.5: Histogram showing Sample Lengths for a) Zinc-Lead Mineralisation and b) Copper

Stockwork Mineralisation

14.5 Continuity Analysis

Continuity analysis was undertaken by ZMAB prior to variography and was based on untransformed

2m composite data. Continuity analysis refers to the analysis of the spatial correlation between sample

pairs to determine the major axis of spatial continuity. Horizontal, across strike and down dip

continuity maps were examined (and their underlying variograms) to determine the direction of

greatest and least continuity. Continuity analysis was undertaken for all domains and elements

including Zn, Pb, Ag, Cu, Ni, Fe and Co where sufficient sample pairs were available. An example

continuity analysis for zinc in the Burkland zone is shown in Figure 14.6.

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Figure 14.6: Example Continuity Map of Zinc Grades at Burkland

14.6 Variography

Based on the continuity analysis variogram modelling was subsequently undertaken by ZMAB.

Directional and down hole variograms were calculated for the 2m composites. In keeping with the

general trend of mineralisation, the variograms were created in the orientation of the defined

mineralisation as described by the continuity analysis. Variography was undertaken for all deposits

except for Cecilia, Borta Bakom and Dalby where insufficient sample pairs were available. Variography

was undertaken for each domain and each element (Zn, Pb, Ag, Cu, Ni, Fe and Co) where sufficient

sample pairs were available. Major axis were defined based on the orientation of greatest continuity.

Minor axis were defined based on the orientation of next greatest continuity and orientated

perpendicular to the major axis. The remaining orthogonal direction, orientated perpendicularly to

the major and minor axis, was then defined. The nugget variances were modelled from the down hole

variograms. Variograms were modelled using 2 structure spherical models. An example of the

modelled variograms for zinc in the Burkland zone are shown in Figure 14.7.

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Figure 14.7: Example of Modelled Variograms for Zinc Grades at Burkland

WAI consider that the overall quality of the experimental variograms generated for the mineralised

zones at Zinkgruvan are acceptable and are generally based on a significant number of sample pairs

which have been sufficiently domained. Confidence in the modelled variograms is therefore high as a

result of the clearly defined continuity displayed by the experimental variograms. No variography

could be defined for Mellanby, Cecilia, Borta Bakom or Dalby mineralised zones due to the limited

number of sample pairs. Mellanby, Cecilia and Borta Bakom, however are being actively mined while

Dalby is classified as a wholly Inferred Mineral Resource.

14.7 Volumetric Modelling

The majority of the Zinkgruvan mineralised zones were modelled using 3d block modelling. The

polygonal method of estimation is also used by ZMAB but is restricted to a few minor historical sub-

domains and sub-domains at early stages of resource evaluation which are classified as Inferred

Mineral Resources only.

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Block Modelling

Block models defining the mineralised zones were constructed by ZMAB in Prorok® block modelling

software using the domain wireframes which were used to code the principal domains. The system is

designed as a block modelling module to run on Microstation® software. Prorok® allows the creation

of a volumetric block model with sub-cell subdivision up to 1/16 of the master block. The location of

each master block is stored as indices (I,J,K) that refer to row, column and level positions. Four

additional fields in the volumetric block model table indicate the level of sub-blocking and sub-cell

position (octant) in the master block.

The Nygruvan block model was based on a parent cell size of 5m x 10m x 5m (x,y,z). Block models

within the Knalla area were based on a parent cell size of 10m x 5m x 10m (x,y,z). A minimum of two

sub-cell splits to the parent cell were allowed where additional cell resolution was required. The block

models were not rotated. Block models are stored in the Oracle® database which links directly into

Microstation®.

14.8 Density

Density measurements are not contained in the drill hole database but are contained in separate

Excel® spreadsheets stored at the mine site. The spreadsheets contain density measurements from

drill core samples and contain drill hole number, sample from and to interval, density measurements

and assay values and as such could be incorporated into the drill hole database.

Zinc-Lead Mineralisation

Density measurements are taken from all areas of the mine and no significant variation in density

between the different mineralised zones is evident. Density for the zinc-lead mineralised zones was

calculated using zinc and lead grades estimated into the block model based on the following formula:

5.7

15.1%

0.4

49.1%

7.2

15.1%49.1%100

100

PbZnPbZnSG

In the calculation, a density of 2.7t/m3 is used for the host rocks while the theoretical densities of

sphalerite and galena are also used. Apart from sphalerite and galena, the Zinkgruvan zinc-lead

mineralisation contains very few other sulphides. To identify density samples reflective of the

mineralised zone, density measurements with corresponding zinc and lead assays were filtered based

on the NSR cut-off value detailed in Section 14.13. Density was then calculated based on the zinc and

lead assays using the formula above. A total of 1,172 measured density values and 1,172 calculated

density values were returned. A summary of the measured density values and their corresponding

calculated density values based on the zinc and lead assays is shown in Figure 14.8 . Overall there is a

general tendancy for the calculated density values to understate the measured densities as illustrated

in the QQ plot. On average, the calculated density values are approximately 6% lower than the

measured densities resulting in a potentially conservative estimate of tonnage. WAI recommend that

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the method of density estimation be further reviewed and include the possibility of estimating density

directly into the resource block model.

a) b)

c)

Figure 14.8: Plots of Density for Zinc-Lead Mineralisation a) Histogram of Density Measurements,

b) Histogram of Calculated Density Values Calculated from Zn, Pb and Ag Grades, and c) Q-Q Plot

of Measured Density against Calculated Density

Copper Stockwork Mineralisation

A constant density of 2.86t/m3 is used by ZMAB for the copper stockwork mineralisation. To evaluate

the appropriateness of the density applied by ZMAB the density database was filtered by WAI based

on a cut-off grade of 1.0% Cu to identify density samples reflective of the mineralised zone. A total of

128 density values were returned. A histogram of the copper stockwork density values is shown in

Figure 14.9 with a mean density of 2.89t/m3. WAI considers the density of 2.86t/m3 used by ZMAB in

the Mineral Resource estimate for the copper stockwork mineralisation to be generally appropriate.

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Figure 14.9: Histogram of Density Measurements for Burkland Copper Stockwork Zone

14.9 Grade Estimation

Block Model Grade Estimation

Grade estimation for Zn, Pb, Cu, Ag, Co, Fe and Ni was performed for the zinc-lead mineralised zones.

Grade estimation for Cu, Zn, Pb, Fe, Ag, As, Sb, Bi and Hg was performed for the copper zone

mineralised zone. Grade estimation was undertaken only for mineralised material defined within each

domain. The domains were treated as hard boundaries and as such composites from an adjacent

domain could not be used in the grade estimation of another domain. Grade interpolation was carried

out using Prorok® software. Ordinary Kriging was used as the principle grade interpolation method for

zones in which suitable variography could be defined. Inverse distance weighting squared (IDW) was

used as the principle interpolation method for all remaining zones. Grade interpolation was carried

out using a single pass method where the search parameters used were approximate to the ranges

for each direction. A minimum of 2 composites and a maximum of 10 composites were required during

the grade estimation. Estimated grades were stored in a separate table and linked to the volumetric

model via a key field. A summary of the grade estimation parameters used by ZMAB are shown in

Table 14.2.

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Table 14.2: Summary of Zinkgruvan Search Parameters

Mineralised Zone ElementSearch Radius

Along Strike (m) Down Dip (m) Across Strike (m)

Burkland

Zn 80 38 20.5Pb 108.5 40.5 5.5Cu 90 39.5 27Ag 124.5 40.5 36Co 63 32 10.5Fe 70 39.5 10Ni 99 38 17

Nygruvan

Zn 103 80 4.5Pb 101 91.5 10Cu 101 78 8Ag 136 78 6Co 120.5 85.5 7Fe 110.5 67 6Ni 68.5 58.5 11

Cecilia

Zn 90 60.3 8.01Pb 90 60.3 8.01Cu 90 60.3 8.01Ag 90 60.3 8.01Co 90 60.3 8.01Fe 90 60.3 8.01Ni 90 60.3 8.01

Borta-Bakom

Zn 100 100 40Pb 100 100 40Cu 100 100 40Ag 100 100 40Co 100 100 40Fe 100 100 40Ni 100 100 40

Sävsjön East(Zeta area / Wilhelm area)

Zn 61 / 46 61 / 46 61 / 46Pb 61 / 36 61 / 36 61 / 36Cu 61 / 67 61 / 67 61 / 67Ag 58 / 25 58 / 25 58 / 26Co 61 / 99 61 / 99 61 / 99Fe 61 / 71 61 / 71 61 / 71Ni 52 / 20 52 / 20 52 / 20

Sävsjön West(Yngve area / Viktor area)

Zn 28 / 50 28 / 50 28 / 50Pb 51 / 26 51 / 26 51 / 26Cu 68 / 67 68 / 67 68 / 67Ag 40 / 46 40 / 46 40 / 46Co 47 / 44 47 / 44 47 / 44Fe 84 / 71 84 / 71 84 / 71Ni 52 / 40 52 / 40 52 / 40

Mellanby

Zn 80 80 11Pb 80 80 11Cu 80 80 11Ag 80 80 11Co 80 80 11Fe 80 80 11Ni 80 80 11

Dalby

Zn 90 80 18Pb 90 80 18Cu 90 80 18Ag 90 80 18Co 90 80 18Fe 90 80 18Ni 90 80 18

Copper Zone

Cu 60 30 14Zn 95 51 36Pb 100 30 30Fe 90 48 13Ag 84 44 35As 102 57 50Sb 80 50 42Bi 70 42 27Hg 95 80 53

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Industry best practice would typically involve a 2 or 3 pass grade estimation using incrementally

increasing search radii based on the variography for each metal and a requirement for composites

from 2 or more drillholes to estimate blocks during at least the first and second searches. However,

given the density of the drillhole data, and given the composite sample requirement in relation to

orebody thickness, WAI considers that the number of blocks (particularly within the Measured and

Indicated Mineral Resource categories) that could have been estimated from only one drillhole to be

insignificant. WAI considers that the block model grade estimation interpolation carried out by ZMAB

to be generally robust.

Polygonal Estimation

Polygonal estimation was carried out in MS Excel® spreadsheets in conjunction with Microstation®

software. Drillhole intersection centres were composited over their entire mineralised thickness and

were plotted on a vertical longitudinal projection. Density was used as a weighting factor in the

intersection average grade calculation. The horizontal thickness was calculated using the angle

between the intersection angle and the local orebody orientation. Irregular polygons were drawn

around each drill hole intersection on the vertical projection. The polygon areas were calculated using

Microstation® software. The volume and tonnage of each polygon was then calculated. The tonnage

of the mineralised zone is calculated as a sum of the tonnage of each polygon, whereas grade is

estimated as a weighted average. Polygonal estimation was carried out only for minor sub-domains

and included Nygruvan mining areas 96-97 and 950 and Borta Bakom mining areas I, U and 150.

14.10 Grade Estimation Validation

Following grade estimation, a statistical and visual assessment of the block model was undertaken to

1) assess successful application of the estimation passes 2) to ensure that as far as the data allowed,

all blocks within mineralisation domains were estimated and 3) the model estimates performed as

expected. The model validation methods carried out by ZMAB included an on-screen visual

assessment of composite and block model grades, a statistical grade comparison and SWATH Analysis

as shown in Figure 14.10. WAI considers that globally no indications of significant over or under

estimation were apparent in the model nor were any obvious interpolation issues identified. From the

perspective of conformance of the average model grade to the input data, WAI considers the grade

estimation by ZMAB to adequately represent the sample data used.

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BURKLAND – Zinc-Lead Mineralisation

-1,125m to -960m level

SWATH ANALYSIS for Zn

a) EASTING – 5m PANELS

b) NORTHING – 10m PANELS

c) RL – 10m PANELS

a)

b) c)

Figure 14.10: Example SWATH Analysis for Zn in Burkland Zinc-Lead Mineralisation -1125m to -

960m Levels

14.11 Mineral Resource Reconciliation

Reconciliation comparing the block models used in the Mineral Resource estimates against planned

and actual production data is undertaken by ZMAB as a means of validation. Reconciliation is

undertaken by the ZMAB geological department on a monthly basis and includes the following:

Mineral Resource Model – an evaluation of Mineral Resource estimates contained

within the mined-out stopes using the Cavity Monitoring System (CMS) survey over

the reconciliation period;

Planned Production – planned stope production based on the annual mine design.

The resource model contained within the planned stopes is evaluated and factors

applied for unplanned dilution and mining recovery; and

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Plant Production – plant reported production figures based on tonnes processed and

back calculated grade.

A summary of the annual reconciliation for the zinc-lead mineralisation and the copper stockwork

mineralisation from July 2016 to June 2017 is shown in Table 14.3 while the monthly reconciliations

for the zinc-lead mineralisation is charted in Figure 14.11.

Table 14.3: Summary of Annual Reconciliation (July 2016 to June 2017)

Zinc-Lead Mineralisation

Source Ore Tonnes (t) Zn Grade (%) Zn Metal (t) Pb Grade (%) Pb Metal (t)

Resource Model 1,053,442 7.42 78,115 3.01 31,704

Plant Production 1,081,462 7.83 84,643 3.19 34,540

Planned Production 1,114,761 7.59 84,627 3.00 33,398

Copper Stockwork Mineralisation

Source Ore Tonnes (t) Cu Grade (%) Cu Metal (t)

Resource Model 94,026 2.12 1,992

Plant Production 99,226 2.05 2,033

Planned Production 90,384 1.55 1,399Note: Copper stockwork production only during July and August in 2016 and February, March, May and June in 2017

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a) Zinc-Lead Mineralisation Tonnes Reconciliation

b) Zinc-Lead Mineralisation – Zinc Grade Reconciliation c) Zinc-Lead Mineralisation – Lead Grade Reconciliation

d) Zinc-Lead Mineralisation – Zinc Metal Reconciliation e) Zinc-Lead Mineralisation – Lead Metal Reconciliation

Figure 14.11: Zinc-Lead Mineralisation Reconciliation for July 2016 to June 2017

Annual ore tonnes for zinc-lead production from the Mineral Resource model and plant production

are comparable and report within 2.6% of each other. Planned annual ore tonnes report slightly higher

tonnages compared to plant production (3.0% higher) and the Mineral Resource model (5.5% higher)

while zinc and lead grades reporting from the resource model and planned production tend to

understate grades plant production. Overall, the Mineral Resource model reports 7.7% less contained

zinc metal and 8.2% less contained lead metal compared to plant production data while the planned

production reports very similar contained zinc metal and 3.4% less contained lead metal compared to

plant production data.

The reconciliation is generally considered acceptable particularly for the planned production

compared to plant production in terms of overall contained metal. It is recommended that a study to

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identify the reasons for the lower grades reporting from the Mineral Resource model and the higher

tonnes reporting from the planned production be considered.

Reconciliation of the copper stockwork zone is complicated by the relatively low tonnage mined and

the intermitent production of this ore type during 2016 and 2017.

14.12 Mineral Resource Depletion and Non-Recoverable Mineral Resources

All underground development and stopes are regularly surveyed using Total Station and CMS survey

methods. The information is imported by ZMAB into Microstation® and used to build up 3D

triangulations of the mined-out regions. These areas are then used to deplete the Mineral Resources.

A limitiation of the current Microstation® system is that depleted resources can not be coded into the

block model and depletion is therefore undertaken as a separate evaluation stage.

Non-recoverable Mineral Resources include areas which will never be exploited for reasons such as

proximity to mine infrastructure and are removed from the Mineral Resource estimate by ZMAB.

14.13 Cut-Off Grades for Evaluation

A Net Smelter Return (NSR) cut-off of 335 Swedish Krona (SEK)/t is used for the purposes of Mineral

Resource evaluation of the zinc-lead mineralisation and is the average NSR for the mine and equivalent

to a cut-off grade of 3.68% Zn equivalent (ZnEq). The NSR uses the following metal prices: 1.00 USD/lb

for zinc, 1.00 USD/lb for lead and 15.0 USD/oz for silver. In the NSR calculation the silver price was

subsequently reduced to 4.11 USD/oz and reflects the remaining value of silver after royalty payment

to Silver Wheaton. Based on an exchange rate of 7.0 SEK/USD, the following NSR factors are used:

1%(Zn)/t = 90.7 SEK, 1%(Pb)/t = 103.6 SEK and 1/t(Ag) = 0.98 SEK. The NSR cut-off is then calculated

using the equation: NSR=(Zn(%)*90.7)+(Pb(%)*103.6)+(Ag(g/t)*0.98).

A cut-off grade of 1.0% Cu is used for the purposes of Mineral Resource evaluation of the copper

stockwork zone and is based on an economic cut-off grade.

The same cut-off grades are used by ZMAB for geological domaining of the mineralised zones, Mineral

Resource evaluation and Mineral Reserve evaluation.

14.14 Mineral Resource Classification

Mineral Resource estimate classification was undertaken by ZMAB on the basis of the drill hole

spacing, geological continuity, data density and orientation, spatial grade continuity, presence of

underground development and soundness of structural interpretation. Measured Mineral Resources

were classified based on a 20m to 50m drill hole spacing and good exposure of the mineralisation in

development. Indicated Mineral Resources were classified based on a 50m x 50m drill hole spacing

with some mineralisation exposed by underground development. Inferred Mineral Resources were

classified based on a 100m × 100m drill hole spacing. Resource classification is stored in the Oracle®

database which links directly into Microstation®.

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The Mineral Resource estimate classification for the Zinkgruvan deposit is illustrated in Figure 14.12.

WAI consider the Mineral Resource classification methodology employed by ZMAB to be generally

acceptable. Going forward it is recommended that the Mineral Resource classification methodology

also consider the confidence in the drill hole data quality with respect to the proportion of historical

or recent drilling and their spatial distribution within the mineralised zone.

Figure 14.12: Long Section through Zinkgruvan showing Resource Classification (ZMAB, 2017)

14.15 Mineral Resource Statement

The Mineral Resource estimate for the Zinkgruvan deposit is classified in accordance with the CIM

Standards. The stated Mineral Resources are not materially affected by any known environmental,

permitting, legal, title, taxation, socio-economic, marketing, political or other relevant issues, to the

best knowledge of the author. There are no known mining, metallurgical, infrastructure, or other

factors that materially affect this Mineral Resource estimate, at this time.

The effective date of the Mineral Resource estimate is June 30, 2017. A summary of the Mineral

Resource statement is shown in Table 14.4 and Table 14.5. The cut-off grades used in the evaluation

are detailed in Section 14.13.

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Table 14.4: Total Mineral Resources for Zinc-Lead Zones at Zinkgruvan



Tonnage(Kt)

Grade Metal

Zn(%)

Pb(%)

Ag(g/t)

Zn(Kt)

Pb(Kt)

Ag(Moz)

Measured 7,269 10.0 3.8 86 727 276 20

Indicated 8,399 8.7 3.7 82 731 311 22

Measured +Indicated

15,668 9.3 3.7 84 1,458 587 42

Inferred 9,431 8.5 3.5 81 802 330 25Notes:


2. Mineral Resources are reported using a zinc equivalent cut-off grade based on a NSR breakeven price;







Table 14.5: Total Mineral Resources for Copper Zones at Zinkgruvan



Tonnage(Kt)

Grade Metal

Cu(%)

Zn(%)

Ag(g/t)

Cu(Kt)

Zn(Kt)

Ag(Moz)

Measured 4,357 2.3 0.3 32 100 13 4

Indicated 619 2.1 0.4 36 13 2 1

Measured +Indicated

4,976 2.3 0.3 32 113 16 5

Inferred 193 2.3 0.3 25 4 1 0.2Notes:






14.16 Comparison to Previous Estimates

In January 2013, an NI 43-101 compliant Technical Report was filed summarising a Mineral Resource

and Mineral Reserve estimate prepared by WAI. The effective date of the Mineral Resource and

Mineral Reserve estimates was June 30, 2012 and were prepared in accordance with the CIM

Standards. Cut-off grades used for reporting of the Mineral Resource estimate in the January 2013, NI

43-101 were 3.80% Zn equivalent for the zinc-lead zones and 1.0% Cu for the copper stockwork zone.

The main differences between the Mineral Resource estimate reported in the January 2013, NI 43-

101 and the current Mineral Resource estimate are:

Zinc-Lead Zones, Measured and Indicated Resources - Increase in resource tonnes

from 14,558Kt to 15,668Kt. Reduction in zinc grade from 10.2% Zn to 9.3% Zn.

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Reduction in lead grade from 5.0% Pb to 3.7% Pb. Reduction in silver grade from

105g/t Ag to 84g/t Ag;

Zinc-Lead Zones, Inferred Resources – Increase in resource tonnes from 4,553Kt to

9,431Kt. Reduction in zinc grade from 8.9% Zn to 8.5% Zn. Increase in lead grade from

3.3% Pb to 3.5% Pb. Increase in silver grade from 78g/t Ag to 81g/t Ag;

Copper Stockwork Zone, Measured and Indicated Resources - Decrease in resource

tonnes from 5,879Kt to 4,976Kt. Copper grade consistent at 2.3% Cu.

Copper Stockwork Zone, Inferred Resources – Reduction in resource tonnes from

622Kt to 193Kt. Increase in copper grade from 1.7% Cu to 2.3% Cu.

The differences between the Mineral Resource estimates are attributed to additional drilling and

offset by depletion from mining over this period.

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15 MINERAL RESERVE ESTIMATES

Mineral Reserve estimates are prepared by ZMAB in accordance with CIM Standards. WAI has

reviewed the Mineral Reserve estimation methodology undertaken by ZMAB, including mine design

and operational factors and a check on the enterprise cash flow model which includes all operating

expenses and forecast sustainable capital expenditure.

The majority of the Mineral Reserves at Zinkgruvan are hosted by the Burkland zone, with a smaller

portion remaining in the Nygruvan zone. Smaller tonnages are hosted by the Sävsjön, Mellanby,

Cecilia, and Borta Bakom zones, all of which lie to the southwest of Burkland (collectively known as

Västra Fältet or “the western areas”).

15.1 Methodology

Site Assumptions

The ZMAB methodology to determine the value of each individual stope or stope block utilises a NSR

calculation, by determining the average value per unit of zinc contained in ore.

The NSR is calculated on a metal recovered and metal payable basis taking into account zinc, lead,

copper grades and silver content, metallurgical recoveries based on actual mineral process plant

performance, metal commodity prices and realisation costs related to shipment of concentrates to

the appropriate smelter and associated commercial smelter terms and conditions.

The site defines a Cut-off-Value (“COV”) based on enterprise marginal costs, which for 2017 equates

to SEK 335/t. The current (2017 Mineral Reserve Estimate) average COV is 3.68% ZnEq and is detailed

in Section 14.13.

The mining average COV is based on an analysis of the variable operating cost of the mining, mineral

processing, general and administration, and development access costs (capital and operational),

depreciation costs; and sustaining capital based on the ZMAB five-year budget.

Reserve Estimation Process

The zinc-lead mineralization wireframes used in the definition of the hangingwall and footwall

contacts for the Mineral Resource block model are adjusted to suit minimum mining shapes, e.g.

minimum horizontal thickness of 5.5m at the sills and 3.5m in between sills; the wireframe is adjusted

every 10 to 20m along strike to represent a suitable mining geometry.

Mineable stopes imply that the planned excavation meets geotechnical design requirements and can

be drilled and extracted using existing mine equipment.

Inferred Mineral Resources contained within the wireframe are excluded from the Mineral Reserve

Report.

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The mineable shapes are modified by dilution and recovery factors as determined by actual mining

practice. The recovery factor comprises of an excavation (mucking) factor of 95%, applied to all areas

of the mine.

The following dilution factors are applied by weight are as follows:

25% waste rock dilution (at zero grade) in the Nygruvan and Västra Fältet areas;

12% waste rock dilution (at zero grade) in the Burkland area; and

12% host rock dilution in the copper areas. The host rock in the copper mining areas

is assumed to contain the average of the equal to or greater than 1% copper grade

shell on the footwall side and zero grade on the hangingwall side.

The sharp grade drop-off at both the hangingwall and footwall contacts of the zinc-lead mineralisation

means that small to moderate changes in the cut-off grade have a minimal impact on the Mineral

Reserves.

The primary computerised software tools used for Mineral Reserve estimation are Microstation® and

Prorok®. Mineral Reserve estimation is integrated with Mineral Resource estimation (modelling and

classification).

The stoping and development plans are constructed using Microstation®. The footwall and

hangingwall wireframes produced are then superimposed over the plans.

Manual adjustments to the wireframes are made to reflect new geological interpretations derived

from mapping and drilling data and current economic conditions. The stope volume is calculated from

the hangingwall and footwall wireframes and the resultant model is evaluated against the block model

to calculate the grade and tonnage of each stope.

The stope shapes are sequenced in Datamine Studio® 5D Planner to produce a Life of Mine (“LOM”)

plan.

Modifying Factors Overview

To determine access to the planned stope blocks, development drives which are located 30m from

the orebody footwall are driven into a stoping area in advance of production. Infill Mineral Resource

delineation drilling from the footwall is used to define the footwall and hangingwall stope boundaries

based on a mining cut-off grade.

Mined-out areas are routinely surveyed using a Cavity Monitoring System (“CMS”) prior to backfilling.

The CMS produces a wireframe of the stope void which is then imported into Microstation®. A single

wireframe of the mined-out stopes is produced and this is also evaluated against the block model in

order to calculate the grade and tonnage of the mined material.

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The resultant Mineral Reserve estimate has demonstrated economic viability, that is the recoverable

and payable metal value contained in the stope is greater than the cost of development and

production expenses.

15.2 Mineral Reserve Statement

The Mineral Reserve estimate for the Zinkgruvan deposit is classified in accordance with the CIM

Definition Standards for Mineral Resources and Mineral Reserves (2014). The effective date of the

Mineral Reserve estimate is June 30, 2017. A summary of the Mineral Reserve statement is shown in

Table 15.1 and Table 15.2. The cut-off grades used in the evaluation are detailed in Section 14.13.

Table 15.1: Total Mineral Reserves for Zinc Zones at Zinkgruvan



Tonnage(Kt)

Grade Metal

Zn(%)

Pb(%)

Ag(g/t)

Zn(Kt)

Pb(Kt)

Ag(Moz)

Proven 8,100 7.4 3.0 68 602 241 18

Probable 3,801 6.7 2.7 51 253 101 6

Proven +Probable

11,901 7.2 2.9 63 855 342 24

Notes:


2. Mineral Reserves are reported using a zinc equivalent cut-off grade based on a NSR breakeven price;



4. Modifying factors used include the use of NSR and mining cut-off values in defining the extraction (stope) shapes, along with dilution and recovery in the mining process;

5. The NSR is calculated on a recovered payable basis taking in to account copper, lead, zinc and silver grades, metallurgical recoveries, prices and realisation costs;



Table 15.2: Total Mineral Reserves for Copper Zones at Zinkgruvan



Tonnage(Kt)

Grade Metal

Cu(%)

Zn(%)

Ag(g/t)

Cu(Kt)

Zn(Kt)

Ag(Moz)

Proven 4,375 1.8 0.2 25 78 9 4

Probable 877 2.0 0.2 29 18 2 1

Proven +Probable

5,252 1.8 0.2 26 96 11 4

Notes:


2. Modifying factors used include the use of mining cut-off values in defining the extraction (stope) shapes, along with dilution and recovery in the mining process;



The location of the Proven and Probable Mineral Reserves are presented on a long-section of

Nygruvan and Knalla areas in Figure 15.1 and Figure 15.2 and for the copper area in Figure 15.3.

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Figure 15.1: Long Section Through Nygruvan Area Showing Mineral Reserve Classification

Figure 15.2: Long Section Through Knalla Area Showing Mineral Reserve Classification

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Figure 15.3: Long Section Through Copper Area Showing Mineral Reserve Classification

15.3 Mining Modifying Factors

The modifying factors applicable to mining derived from operational experience in 2016 and 2017

(YTD) for dilution, recovery, and backfill dilution are applied to the stopes for the conversion of Mineral

Resource estimates to Mineral Reserves. A detailed account of the reconciliation is set out in Section

14.11 of this report. The planned mining factors for 2017 applied to the various mining areas are

summarised in Table 15.3.

Table 15.3: Mining Factors 2017

Mine Area

Burkland1125and over

Burkland1300 andunder Cecilia

Nygruvan240

Nygruvan CF,205 Mellanby Sävsjön

BortaBakom Copper

Dilution (%) 12 15 20 20 15 15 10-12 20 20

Miningrecovery (%) 95 95 95 95 95 95 95 95 95

Backfilldilution (%) 3 3 3 3 3 3 3 3 3

The methodology employed for defining Mineral Reserves used by ZMAB takes into account both the

economic and practical operational constraints of mining the orebodies. The mine Mineral Reserves

are supported by detailed mine plans, mine engineering analysis and appropriate, operationally

derived, dilution and recovery factors applied to the Mineral Resource.

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15.4 Reconciliation

Detailed stope reconciliation exercises are undertaken by the staff at Zinkgruvan. The actual tonnage

and grade of ore processed in the mill is compared against the tonnage and grades of the short term

mine designs and plans.

Stope solids derived from the CMS surveys are loaded into Prorok®. The mined-out stopes are

compared with the original planned stopes and the amount of dilution and any ore losses are

calculated.

This reconciliation process determined the average annual performance against the short term mine

designs presented in Table 15.4.

Table 15.4: Reconciliation: Average 2017 Stope Mining Factors (%)

Dilution 11.6

Ore addition 0.4

Past fill dilution 0.3

Ore losses 10.0

15.5 WAI Review

Review Mine Design & Scheduling Verification

15.5.1.1 Overview

WAI has carried out a review of the mine design for the project as part of the verification of Mineral

Resources to Mineral Reserves conversion. The data reviewed includes:

Studio 5DP Planner project files, including the life of mine design stopes and

development;

EPS project files, including the sequencing and scheduling data for the mine design

stopes and development;

DXF files of the existing/as-built stopes and development infrastructure;

Schematic of ventilation designs; and

Mineral Resource block model.

15.5.1.2 Verification of Stope Block Construction Relative to the Mineral Resource

WAI has reviewed the designed stoping blocks within the LOM plan and considered the design stopes

relative to the Mineral Resource block models. To validate the location of the stopes, WAI filtered the

block model by grade; and conducted a visual inspection of the stoping blocks to verify that stope

construction has been carried out in areas achieving the cut-off-grade for the various stoping blocks.

Additionally, WAI utilised the stope grade data within EPS (which considers dilution and recovery

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within the calculated grade) to identify any stopes which have an average block grade below the mine

COGs of:

3.68% ZnEq for zinc-lead blocks; and

1.5% Cu for copper blocks

Stope dimensions were reviewed in order to confirm compliance with the limits on stope size set out

in the geotechnical design for the operation.

WAI considers that the stope designs are appropriate and the design methodology conforms to

international best practice.

15.5.1.3 Development Design

WAI has reviewed the development design in order to confirm appropriate access is provided to the

working areas and is suitable for mine ventilation and underground infrastructure access.

The development review comprised a visual inspection of the general layout, confirming all

development headings are connected to either existing access or can be constructed sequentially from

design excavations. Additionally, WAI carried out spot checking of the development wireframes to

verify that cross section designs are compliant with the design criteria set out by the mine.

WAI considers that the development designs are appropriate and the design methodology conforms

to international best practice.

15.5.1.4 Mine Sequencing and Scheduling

Development and stope sequencing has been carried out in Studio 5D Planner using a combination of

automatically generated and user defined constraints (sequence links). The sequence links have been

produced in order that the mine is developed following a logical sequence, ensuring that the various

aspects of the mine design are constructed sequentially (i.e., a stope cannot be constructed until the

assess, ventilation and infrastructure required for that stope are also complete).

These logic sequence links have then been exported, in conjunction with the mine design, into EPS

scheduler; where production rate constraints, and equipment/manpower resourcing has been

applied.

EPS allow the user to view an animation of the mine construction by period (year, quarter, etc) and

WAI has conducted a visual inspection of this animation to verify that the mining sequence occurs in

a logical and viable way.

Within EPS, each of the mining activities has associated values for mineable tonnage, grade, resourcing

and mining factors; which are calculated based upon values derived by evaluating the mine design

wireframes against the block model.

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In order to verify the process, WAI has carried out spot checks on mining activities throughout the

mine and across the LOM schedule; reviewing initial input parameters and applied factors used to

derive the final schedule outputs.

WAI considers that the mine sequence and schedule to be appropriate and the methodology conformsto international best practice.

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16 MINING METHODS

The Zinkgruvan mine was developed in 1857 as an underground mine with the orebody at that time

outcropping at at surface. It is currently known to extend to the -1,600m level and is open at depth

(underground elevations in this report are relative to a surface datum). Mine access is currently via

three shafts, with the principal P2 shaft providing ore and waste rock hoisting as well as labour access

to the -800m and -850m levels. The “daylight” ramp connects the surface and the underground

working the “western areas”, providing direct vehicle access from surface to the mine. A system of

further ramps is employed to access and hence exploit mineral reserve below the shaft. The mine is

highly mechanised, utilising the best available technologies to control operations. Longhole panel and

sub level bench stoping are emloyed throughout the mine. All stopes are backfilled with either

cemented paste tailings or waste rock. Mining has currently reached the -1,250m level.

ZMAB has made significant investment in technology, machinery and equipment as well as efficient

work systems used to mine and process the ores in recent history. A new shaft and mineral processing

facility was built in 1977. As the mining of the polymetallic ores has deepened, additional

infrastructure has been built to enable safe access and adequate airflow to the underground workings.

In the mid-1990s, increasing production rates, the commensurate size of the underground mined out

areas, coupled with the high horizontal ground stress led to increasing difficulty maintaining the

stability of stope hangingwalls. As a result, the mining methods and extraction sequences were

modified and a cemented paste backfill system was installed in 2001.

A schematic three-dimensional view of Zinkgruvan mine showing the present operational mining areas

is presented in Figure 16.1. The current maximum depth below surface of the Mineral Reserves is

approximately 1,300m in both the Nygruvan and Burkland zones.

Figure 16.1: Location of Current Mining Areas

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16.1 Access and Infrastructure

The Zinkgruvan underground mine has three main operating shafts. Shafts P1 (732m deep, 3m

diameter, rectangular furniture) and P2 (904m deep, 5.5m diameter, round based furniture) are both

situated at Nygruvan, Shaft P1 is used for ancillary hoisting of personnel throughout the working shift

and P2 is used for ore and waste rock hoisting, materials and for the bulk of personnel transport at

the beginning and end of the work shift. Shaft P3 (350m deep, n.d., rectangular furniture) at

Knallagruvan is not a significant part of the current or future operating plan and serves only as an

emergency egress and to support mine ventilation.

In 2010, a ramp from surface down to a depth of 350m was completed, connecting to the existing

internal ramp infrastructure in the mine and many mine materials are now transported via this route.

16.2 Rock Mass Characterisation

Geotechnical

16.2.1.1 Rock Types

The principal minerals in the ore zone are sphalerite and galena. The ore is metamorphosed tuffs with

intercalated beds of marble, dolomite and fine grained quartzite. These beds give the orebody a

distinctive stratification and significantly reduce the rockmass strength where they are abundant.

The footwall rocks are generally competent and massive siliceous meta tuffites (leptites). On the

immediate footwall of the Nygruvan orebody there is a weak skarn deposit that forms a natural plane

to which the orebody breaks.

The rock in the immediate hangingwall of the ore zone (10m to 20m) consists mainly of calc-silicate

bedded metatuffite. This is alternating 0.5cm to 1cm thick layers of quartzite, quartzitic metatuffite

and other metamorphosed rocks, which tend to accentuate the bedding and create a need for ground

control.

16.2.1.2 Geological Structures

The major geological structure is the subvertical north to northeast trending Knalla fault that divides

the orebody. Between -700m and -800m levels the Nygruvan zone is mined adjacent to this structure.

Mine development from the Nygruvan to the Burkland zones passes through the fault on the -450m,

-650m, and -800m levels. Dolerite dykes cut perpendicularly across the ore and then later run parallel

to the ore as sills in the hangingwall.

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16.2.1.3 Hydrogeological

Weak inflows have been associated with faulting and shear zones, but cover drilling to check for water

has not been necessary. Water ingress into the mine comprises both groundwater, exhaust fan

condensation and production and development drill water.

16.2.1.4 Rock Stress Environment

The rock stress regime at Zinkgruvan has remained fairly stable since 2005, despite an increase in

depth of mining by 300m. There has been no additional impact on mining activities due to the rock

stress environment, and all mining induced stress is handled by the robust rock reinforcement systems

in place.

The virgin (undisturbed) principal stresses are orientated approximately in the horizontal-vertical

planes. The maximum horizontal stress is orientated east-west, roughly parallel to the Nygruvan zone,

and roughly perpendicular to the Burkland zone. A stress rotation is evident over the Knalla fault,

implying that the fault zone is well healed and interlocked with the surrounding rock mass. The

average stress at 960m in the Burkland zone is ϬH=64MPa, Ϭh=45MPa and Ϭv=28MPa.

The following stress profile represents the stress environment at Zinkgruvan mine. Note: ϬH=Ϭ1,

Ϭh=Ϭ2, Ϭv=Ϭ3.

ϬH=0.068z;

Ϭh=0.047z; and

Ϭv=0.028z.

Stress measurements undertaken at Zinkgruvan are presented in Table 16.1.

Table 16.1: In Situ Stress MeasurementsϬ1 Ϭ2 Ϭ3

Site &Year

Depth(m)

No oftests

Magnitude(MPa)

Orientation(°)

Magnitude(MPa)

Orientation(°)

Magnitude(MPa)

Orientation(°)

Nygruvan(1983)

790 7 45.6 300/03 31.8 032/33 25.9 206/57

Nygruvan(1983)

825 1 40.1 073/10 25.9 337/28 12.6 181/60

Burkland(1988)

350 1 17.1 067/04 5.5 158/11 1.7 317/78

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16.2.1.5 Rock Mass Properties

Geological strength index (GSI) is used to describe the rock mass as shown in Table 16.2.

Table 16.2: Geological Strength Index (GSI)Rock Type

Biotite Relatively competent rock, with GSI typically ranging between 50 and 60 based onestimations and previous experience.

Leptite and or Skarn-Leptite Fairly competent rock with GSI in the range of 50 to 65, although zones with qualityrock occur intermittently.

Zinc-lead ore Competent rock with relatively consistent GSI-rating between 60 and 70, locally upto 80 in areas with very high strength rock with few structures.

Limestone/marble Relatively good rock with GSI in the range of 60 to 65, locally as high as 80.

Copper Ore Relatively good rock with GSI varying between 55 and 65, locally as high as 80 withfew fractures

Quartz feldspar Leptite Very good rock with GSI ratings in the range of 70 to 82, with little variation in theexposed areas.

16.2.1.6 Rock Mass Strength

A summary of estimated rock strengths following the Hoek and Brown Criterion and Geological

Strength Index rock mass classifications, are presented in Table 16.3.

Table 16.3: Rock Strengths

Rock Type Strength miσc

(MPa)GSI

c(MPa)

φ(°)

σtm (MPa)

Biotite leptite (Zn-Pbfootwall)

Low 20 100 50 5.3 38.4 0.1

Typical 20 175 55 6.8 44.6 0.3

High 20 275 60 8.8 49.6 0.7

Zinc-Lead ore

Low 25 225 60 8.5 49.9 0.4

Typical 25 225 65 9.3 51.2 0.6

High 25 225 79 12.8 54.6 1.8

Leptite and/or Skarn-leptite (Zn-Pbhangingwall)

Low 20 100 35 4.2 33.8 0.04

Typical 20 175 55 6.8 44.6 0.3

High 20 250 65 9.4 50.2 0.9

Limestone/Marble(Cu footwall)

Low 12 100 60 5.4 37.0 0.4

Typical 12 100 65 5.9 38.4 0.6

High 12 100 79 8.1 42.2 1.7

Copper Ore

Low 20 165 55 6.7 44.1 0.3

Typical 20 165 60 7.3 45.5 0.4

High 20 165 79 10.8 50.6 1.7

Quartz-feldsparleptite (Cuhangingwall)

Low 25 300 70 11.7 54.6 1.3

Typical 25 300 75 13.3 55.7 1.8

High 25 300 82 16.6 57.1 3.1

mi = m-value for intact rock (in the Hoek-Brown failure criterion)

σc = uniaxial compressive strength of intact rock

GSI = Geological Strength Index

c = cohesion of the rock mass (Mohr-Coulomb failure criterion)

φ = friction angle of the rock mass (Mohr-Coulomb failure criterion)

σtm = uniaxial tensile strength of the rock mass

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Geotechnical Implications for Mine Layout and Rock Excavation Design

16.2.2.1 Ground Control Hazards Associated with Rock Types

The footwall leptites (siliceous tuffs) are generally massive and competent with no associated ground

control problems except where fault zones are intersected (discussed in detail in the next section).

The orebody is generally competent, but the presence of limestone bands significantly reduces the

rockmass strength. Ground control standards include pattern cable bolting in areas with spans

exceeding 7m. In the Longitudinal Bench and Fill stopes, stable spans of up to 11m are achieved with

6m long cable bolts.

In the Nygruvan zone, hangingwall dilution is more significant in areas with higher concentrations of

limestone bands. Meanwhile, in the Burkland zone hangingwall dilution is more significant in areas

that are more jointed and weathered and with more chlorite and talc minerals, significantly reducing

rockmass strength. These areas may have Q values less than 1 and are classed as poor. As a result,

cableboting of the hangingwalls is standard practice at Zinkgruvan, this is discussed in more detail in

Section 16.2.2.5.

16.2.2.2 Ground Control Hazards Associated with Geological Structures

Poor ground conditions are associated with the shear zones of minor faults in the footwall that do not

have significant throw.

The main dolerite dyke that crosscuts the orebody creates significant ground control challenges where

it is highly weathered. Geological and geotechnical mapping is continuously employed to identify

important faults and other structure in terms of ground control. The larger geological features are to

be included in the geological model in the seismic location system to see if slip on any of the structures

results in increased seismicity.

16.2.2.3 Ground Control Hazards Associated with Seismicity

The seismic monitoring indicates that the microseismicity is generally closely associated with the

current mining with the larger events located in the hangingwall. The highest concentration of seismic

energy has been on the east and west abutments to the lower mining levels. No particular stage in the

mining has so far been identified with a recognisable increase in seismicity; monitoring of the

seismicity is an ongoing part of the ground control programme.

16.2.2.4 Ground Control Associated with Deepening of the Mine

Ground conditions in the Nygruvan zone are generally better than those encountered in the Burkland

zone. In both zones, the footwall rocks are of higher quality than the hangingwall rocks, and the

principal stress is sub-horizontal and trending east-west. In some areas, such as the -965m level in

Burkland (stope 845), sliding along the foliation in the footwall has occurred. Stress induced instability

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is expected to increase as the mining depths increase. The mine’s technical services continuously

monitor ground conditions and carry out geotechnical modelling in order to consider, where this is

anticipated, any increased increase in ground support or a reduction in stoping dimensions and level

spacing will be required.

Stope dimensions have been determined using the Matthews-Potvin N’stability estimation method

(Hutchinson & Diederichs, 1995). Including the Q’ rockmass classification, a stress factor, joint

orientation factor and gravity adjustment, the N’ stability number is graphically plotted against

hydraulic radii to determine the maximum ‘stable’span. Stope bolting recommendations are made

using the same graph and the application of empirical cable bolt designs as recommended in the

Internationally recognised “Cablebolting in Underground Mines” handbook, ISBN 0 921095 37 6.

The varying stope dimensions for the main mining regions and the changes due to depth of excavation

are shown in Table 16.4.

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Table 16.4: Stope Dimensions for the 5-year Mine Plan

Elevation Zone NameMining

MethodUnit 2018 2019 2020 2021 2022 High Length

-630 Bu650 T Stope Bu650 T Overhand T 26,463 49,187 43,839 24,763 - 8-10m 25m

-965 Bu965 T Stope Bu965 T “ T 47,248 69,477 69,096 72,087 69,985 25m 20m

-1125 Bu1125 T Stope Bu1125 T “ T 181,749 159,878 161,647 160,479 100,435 15-25m 20m

-1286 BU1300 Stope Bu1300 T Underhand T 109,439 135,315 121,589 161,394 145,190 15m 15m

-663 Borta Bakon Stope Bob T Overhand T 39,054 55,426 54,155 79,738 82,307 10-12m 25-35m

-640 Cecilia Stope Cecilia T “ T 118,566 108,193 94,447 106,416 79,719 13-20m 25-35m

-1135 NY1125 Stope Ny1125 T “ T 111,466 95,089 59,501 - - 12-18m 25-40m

-1296 NY1300 Stope Ny1300 T Underhand T 99,432 143,757 136,242 157,618 134,042 15m 20m

-1148 NY CDF Stope Ny CDF T Overhand T 113,222 107,554 110,917 109,986 117,111 17m 20m

-920 NY 205 Stope Ny205 T “ T 29,196 55,642 59,671 59,188 83,663 13m 30-40m

-633 Sav West Stope Sav West T “ T - - 39,609 59,683 71,016 11m 30-40m

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16.2.2.5 Development and Stoping Support

Cable bolts are installed in the hangingwall of stopes from the sill in a fan pattern starting at 0.5m

above the floor, then at 1m intervals to the roof line, for a total of five cable boltsper row. The first

cable bolt is angled slightly down to facilitate drilling and also the second bolt so that the spacing at

the toe of the longest bolt (12m long) is 3m. The third bolt is approximately horizontal so that the

spacing at the toe of the longest bolt is again 3m. The remaining two bolts are angled up keeping the

toe spacing of the longest bolt at 3m.

This design is necessary to match rock drilling machinery requirements. The position and direction of

the cable bolt installation remains constant for all rock types, with the length and the row spacing

changing as required.

The mine currently also operates an underhand zone with a 20m (vertical) level spacing, stope span

of 15m in transverse and 6m in longitudinal stopes. Stope dimensions are locally adjusted according

to geological conditions.

Mine development ground support is installed to derived design standards, although the miners have

the discretion to increase support levels as required on a daily basis. The basis of ground support

design is ground stress conditions and dead-weight calculations for differing zones of rock mass

classification. Support elements include resin-grouted rebar, end-anchored rock bolts, cable bolts

mesh, structural shotcrete and fibrecrete.

16.2.2.6 Application of Shotcrete

The application of shotcrete is ubiquitous throughout the deeper operating sections of the mine.

Concrete and shotcrete are purchased from a local vendor and a contractor is employed to apply the

shotcrete to a minimum thickness of 35mm. The contractor adds steel fibre (35mm length) to the

shotcrete. Approximately 12,000m3 of shotcrete is applied annually.

16.2.2.7 Backfill Design

Backfilling now utilises cemented paste fill, but previously hydraulic sandfill was used. The flow sheet

showing the paste plant layout is shown in Figure 16.2.

Cemented backfill and mine waste rock is placed within voids to manage closure, stabilise stope spans,

and minimise waste haulage to surface. At present, backfill comprises between 2% to 8% cement,

depending on exposure requirements. Approximately 60% of the void volume is paste-filled and the

remaining 40% is filled with waste rock or left open. Backfill stability is calculated using Mitchell’s

formula (Mitchell, 1991), a factor of safety of 1.2 is applied to paste columns.

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Figure 16.2: Schematic Flow Sheet of the Paste Plant

The design of the plug to contain paste is a cement rich plug (5 to 7% cement) to a height of 2m above

the drawpoint level. Simple wooden barricades on top of a waste pile are found to be sufficient to

hold this paste plug. The minimum cement content described above is sufficient to minimise any risk

of liquefaction, however, the rate of pour needs to be balanced against the rate of curing to limit this

risk when the paste is freshly poured.

Underground Distribution System

The paste distribution system comprises of cascading boreholes and pipelines in the Burkland zone on

levels -350m, -450m, -650m and -800m. On the Nygruvan side, the levels with paste are -350m, -500m,

-650m, -800m and -900m. The system involves surface boreholes, some steel cased, ranging in

diameter from 165 to 300mm. The underground internal boreholes were reported to be 200mm in

diameter and uncased. The piping system underground is comprised of 150mm Schedule 40 or 80

piping and final pipe runs to stoping areas utilise PN16 HDPE pipe. A schematic of the paste

distribution system is shown in Figure 16.3.

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Figure 16.3: Schematic Paste Distribution System

Figure 16.4 shows the paste fill distribution from the operators control panel for Burkland and

Nygruvan zones. The display provides the status of each paste-fill line and various pressure and

throughput measurements.

Figure 16.4: Control Panel View of Paste Distribution System Control

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16.3 Underground Mine Layout

Mine Infrastructure

From the shaft which goes down to -800m level, main levels are mined off at approximately 150m

vertical intervals. The level development is kept in the footwall of the orebody and has spiral ramps

connecting the main levels 400m to 500m long on strike. The access to the orebody is by means of

these trackless footwall ramps. Ore is loaded into ore passes that feed to the main haulage level on -

800m level where it is hauled to the shaft for hoisting. Ore from below the -800m level is trucked via

the main ramps to the crushers.

Ramp Development

Internal ramps are 4.5m high by 5m wide which are rectangular with curved shoulder profiles. The

main ramp is 5m high by 5.4m wide tunnel which is also rectangular with curved shoulder profiles. At

main footwall positions the ramp flattens for approximately 10m either side of the accesses. The Main

access crosscuts mined off the Ramp to the orebody are mined at 5.0m high by 4.5m wide.

Footwall and Hangingwall Haulages

Footwall haulages are standard 5.0m high by 4.5m wide tunnels with arched shoulder profiles. The

footwall or hangingwall haulages are mined at 1.0% to the rise to allow drainage back to the ramp

cross cut position.

Sub Level Development

Sub level development is 5.3m high by 5 to 8m wide. These ore drives are mined under geological

control and will accurately follow the structure of the orebody. Ore drives are predominantly

developed on the hangingwall of the orebody and may be allowed to follow the more distinguishable

footwall contact at Nygruvan where the orebody is of sufficient width.

When ore width is greater than the standard 5.3m development width, but less than 8m, the sub level

is initially mined to the full width.

Raise Construction

There is a significant requirement for raise construction during the mine life. Raising is carried out by

raisebore machinery for the longer raises, such as ore passes and ventilation raises. Slot raises in the

ore zones are mined using raiseborers or long hole drilling by drop raising. In the stopes, the size of

the drop raises is 1.04m diameter. Ventilation raises are traditionally developed to either 2.7m

diameter, when raisebored, or 3m x 3m section, when drop-raised.

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16.4 Mining Methodologies

There are four excavation or stoping methods utilised at the Zinkgruvan mine, transverse bench and

fill, sub level open stoping (“SLOS”) mining, a modified Avoca mining method and underhand bench

and fill (in this case the term underhand refers to the mining sequence not stope drilling orientation).

Transverse Bench and Fill (Panel Mining)

In the Burkland zone, long hole transverse bench and fill stoping (locally known as panel mining) is

used with a sequence of primary and secondary stopes. Stope dimensions are nominally 20m high by

30m wide for the primary stopes and 20m wide for the secondary stopes. Stope access is typically

developed in the footwall from the ramp system with this development at 5m x 5m size. Stope

accesses are developed on the upper horizon for drilling and on the lower level for mucking with

remote control Load Haul Dump machines (“LHDs”).

On completion of mining, the stopes are backfilled with cemented paste fill. The paste plant can

deliver 120t/hr of paste fill to a stope. Where possible, waste rock is disposed in secondary stopes

rather than being hoisted to surface.

Sill pillars at the -965m, -800m, -650m, and -450m levels have been left to separate mining areas and

provide ground support between active mining areas and previously mined and backfilled areas.

Sub-Level Open Stope (“SLOS”) Mining

In the Nygruvan zone, long hole transverse bench and fill stoping is also used with a sequence of

primary and secondary stopes. Previously rib pillars left between stopes for ground support have

become unnecessary and stoping is carried out with 15m sublevels and stope lengths of 30m.

Modified Avoca Mining

In the Cecilia zone where the orebody is thinner a modified Avoca Mining method is utilised where

rock fill is placed in the stope against the retreating blasting face. Following blasting the stope rock is

removed with constant monitoring to avoid unplanned dilution.

Underhand Bench and Fill

The lower levels of Nygruvan and Burkland are mined by a top down mining sequence rather than the

previous bottom up sequence of extraction. This reduces the quantum of up front access development

required before extraction is undertaken, reduces the effect of ground stresses, and eliminates the

need for new sill pillars, however, this method requires working higher binder content in all filled

stopes as well as working below cement fill.

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16.5 Drill and Blast, Design and Operations

The development drilling is based on twin boom Atlas Copco units, based on a 25m2 face area, using

a nominal 40mm drill bit diameter, a drill hole length of 4.2m and use of conventional emulsion

explosives and detonators.

The production drilling utilises four drill units, Table 16.5 summarises the drill design for the various

mining methods employed.

Table 16.5: Production Drilling Design

Drill unit AC Simba M4 AC Simba M7 AC Simba E7C AC Simba E&C-ITH

Hole diameter (mm) 89 76 89 95

Max. distance between

lines (m)

2.5 2.0 2.5 2.7

Max tip distance (m) 3.0 2.5 3.0 3.5

Max tip distance in the slot

area (m)

2.3 2.1 2.3 2.6

All worn drill bits are recycled between the face and the Atlas Copco -800m level workshop and an

efficient system of drill bit usage control and replacement is practised.

The Zinkgruvan mine has well established procedures for storage and transport of explosives which

complies fully with government mining regulations. The main explosive is site sensitised emulsion,

supplied in bulk from the vendor. The vendor supplies the product in a tank atop a road truck. The

truck enters the mine via the “daylight ramp”” and delivers the material directly the main -650m level

logistics hub which includes a main explosives storage facility. The supplier has fitted two large storage

tanks providing adequate operational storage.

The detonators and primers are delivered from surface by the mine logistics team and stored in a

magazine also located in the main -650m level logistics hub. The mine utilises the EU “Track and Trace”

system and deliveries of explosive productsares recorded into the system; as well as daily usage. Daily

quantities of explosives are delivered to the mine work area depot’s which are equipped with secure

storage boxes for the charging crews. Only licenced operators have access to the depots.

Standard development rounds for the development and ore faces is under the control of the blasting

engineer. The newer drilling jumbos have the rounds installed in the on-board computer, but earlier

models have laminated sheets showing the rounds. The layout of stope production holes is also the

responsibility of the blasting engineer. A continuous process of blast design is required for the

longhole stopes. The ground control officer will monitor the effectiveness of blasts in terms of wall

damage and, where necessary, liase with the blasting engineer to incorporate changes into

subsequent blasts.

A standard form for monitoring the blast was designed by the ground control officer. As well as

describing fragmentation of the ore, the form monitors backbreak, the condition of the brow and

visual damage to the stope walls. The results from the monitoring are used to create a database that

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is used to design modifications to the blast design or compare new blasting products. Blast monitoring

equipment is used to identify any problems relating to detonator sequencing.

16.6 Ore and Waste Handling

Ore excavated from the stopes from Burkland and Nygruvan is fed through an ore pass system to the

-800m and -900m levels respectively, where it is transported by truck to the central dual crusher

system at the P2 shaft. Burkland and Nygruvan ore mined from levels below -800m is loaded directly

into trucks from footwall drawpoints for ramp haulage to the crusher.

Ore extracted from the “western areas” stopes is hauled by truck to the central crusher system. The

dual crusher system incorporates hydraulic rock breakers, sizing bars, jaw crusher and rock hewn

storage bins. The bins feed a conveyor which leads to a conventional shaft loading flask for batch filling

of the skip. The P2 shaft hoisting capacity is nominally 2Mtpa of rock, sufficient for ore and waste

planned production.

16.7 Production Schedule

The mine is currently targeting a production level of 1.17Mtpa zinc-lead ore, 0.18Mtpa copper ore and

the requisite waste. The next five years planned production is presented in Table 16.6, while the

forecast life of mine continues until 2032.

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Table 16.6: Five Years Planned Production

2018 2019 2020 2021 2022

Mine

Total Zn Ore Production (tonnes) 1,170,000 1,200,000 1,200,000 1,200,000 1,200,000

Zn Grade % 7.8 7.7 7.7 7.1 6.9

Pb Grade% 2.6 3.0 3.0 2.9 2.8

Ag Grade g/t 61 68 69 60 70

Total Cu Ore Production (tonnes) 180,000 150,000 200,000 200,000 200,000

Cu Grade % 1.7 1.7 1.6 1.6 1.7

Ag Grade g/t 27 20 19 24 22

Total Ore Production (tonnes) 1,350,000 1,350,000 1,400,000 1,400,000 1,400,000

Total Waste Development (tonnes) 348,246 385,584 387,934 362,157 306,004

Total Development (metres) 4,371 5,187 4,823 4,555 4,317

Plant

Recoveries Zn Ore

% Zn 89% 90% 91% 91% 91%

% Pb 81% 83% 83% 83% 83%

% Ag 65% 65% 65% 65% 65%

Recoveries Cu Ore

% Cu 89% 91% 91% 91% 91%

% Ag 65% 65% 65% 65% 65%

Zn Concentrate Production (tonnes) 150,745 156,769 157,715 145,199 141,141

Zn % 53% 53% 53% 53% 53%

Pb Concentrate Production (tonnes) 34,481 41,281 41,151 39,883 39,090

Pb (%) 72% 72% 72% 72% 72%

Ag g/t 1,377 1,281 1,289 1,292 1,298

Cu Concentrate Production (tonnes) 10,680 9,046 11,705 11,134 11,991

Cu (%) 26% 26% 26% 26% 26%

Ag g/t 296 216 211 280 239

Total Contained Metal

Zn t 80,347 83,558 84,062 77,391 75,228

Pb t 24,826 29,722 29,629 28,716 28,145

Cu t 2,723 2,307 2,985 2,839 3,058

Ag koz 1,628 1,763 1,785 1,757 1,723

The location of the next five-years of production is presented as long-sections of the three main

stoping areas in Figure 16.5, Figure 16.6, Figure 16.7, Figure 16.8 and Figure 16.9.

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Figure 16.5: Long-Section Through Nygruvan Zone Showing Mining Plan for 2018 - 2022

Figure 16.6: Long-Section Through Sävsjön Zone Showing Mining Plan for 2018 - 2022

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Figure 16.7: Long-Section Through Western Areas Showing Mining Plan for 2018 – 2022

Figure 16.8: Long-Section Through Burkland Zone Showing Mining Plan for 2018 - 2022

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Figure 16.9: Long-Section Through Burkland Copper Stockwork Zone Showing Mining Areas for

2018 - 2022

16.8 Mine Infrastructure

Operational Control

An advanced system of operational communication and control is reticulated throughout the mine.

This includes copper wire telephones, Leaky Feeder radios, RFID personnel tags combined with

proximity zone readers, Fibre Optic cables for Wi-Fi to underground offices and workshops, PED cap

lamp system all integrated into a system that monitors for abnormal tasks as well as the presence of

contract workers in unplanned work areas. A comprehensive ABB system for the control of ventilation

fans, water pumps, shaft hoisting, first responder co-ordination is in place.

A mine control room denoted as “Drift Central Control” is situated at the surface between the P1 and

P2 shafts, and co-located near the mine technical services offices.

Electrical Reticulation

The site is fed on surface from 2 x 10kVA and 2 x 20kVA overhead and ground cables. The ground

cables were installed in 2016-2017 as part of a system upgrade to enable security of supply and

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underpin the planned increase in production. These cables are routed to the onsite main switchgear

house which feeds the cabling to the mineral process plant, hoist motor switchgear and the

underground mine.

The mine cables are affixed to the P1 and P2 shaft furniture, at both 10kVA and 20kVA. These cables

are routed to the main crushers on the -800m level and then via transformers to mine wide switchgear.

There are approximately fifty (50) switchgear panels throughout the mine which feed ventilation fans,

pump stations and drill machines.

Mine Environment - Ventilation

Zinkgruvan mine effectively comprises two ventilation districts; The first encompasses Nygruvan and

part of the Burkland zone and the second encompasses the western areas, centred around Knalla and

Cecilia zones as well as the remaining areas of Burkland.

The ventilation network comprises main fans at the:

P2 shaft, 355kW inlet fan, downcast, 2.4m diameter, rope guides at a flow rate of nominally

100m3/sec. A heat exchanger is installed to maintain inflow air temperatures above +2

Celsius;

The Thorax Shaft, 320kW (4x80kW coupled in series), 5m diameter, upcast;

The Kristina (Burkland zone) S1 shaft 500kW inlet, downcast, 150m3/sec, with heat

exchanger installed to maintain air at above +3 Celsius, S2 shaft. 500kW outlet, upcast,

150m3/sec, reverse heat exchanger installed to capture heat from S1;

The Knalla, Lindängen and Dalby shafts, S1, 45kW upcast, 45kW downcast, fans are located

underground with small buildings on surface, heat control is by oil fired burner located in

the buildings;

The Cecilia shafts, S1 shaft 355kW located on surface, providing 100m3 downcast, S2 shaft

355kW located UG, providing 100m3 upcast; both S1 and S2 have heat exchangers capturing

exhaust air heat for use in incoming air; this heat exchanger is supported by an oil and

electric heater used as required; and

The UG fans provide secondary ventilation and are both 37kW and 90kW; variable flexible

ducting is used to control air direction and the air volumes moved range between 15m3 and

20m3. The underground secondary fan motors are controlled by frequency devices and

adjusted from surface by telemetry, at the discretion of the underground operational staff.

The mine environment is surveyed daily with checks on flow rate and air volume movement,

temperature and humidity. The control network is by use of barricades, doors and secondary control

by way of the ventilation fans. All underground personal are provided with either CO monitors and

some have NO2 dosimetry devices.

The ventilation networks are modelled in Mine Ventilation Service Inc., VnetPC software. A schematic

of the ventilation system is shown in Figure 16.10.

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Figure 16.10: Schematic Ventilation system

16.9 Mine Services

The mine services department controls paste distribution, mine construction, road maintenance,

logistics planning with procurement, and shotcrete contractor activities.

Materials Handling

Materials handling from surface to the underground warehouse and distribution is controlled by the

logistics department. Material is transported by road going truck (8-10t capacity) from surface down

the “daylight” ramp to the -800m level logistics hub and -965m level hub.

The logistics fleet operates on day shift only. The logistics warehouse for operational consumables,

maintenance items, critical spares is located next to the -800m level workshops.

The logistics vehicles return to surface with sewage containers and waste from the workshops.

Diesel fuel is stored on surface in a nominal 30,000 tank. A steel line (22mm diameter) runs down P1

to a buffer tank of 1,000l that includes spillage protection with pressure control valves. The fuel is

piped to the -650m level workshop / service bays and stored in a 5,000l tank, and to the -800 level

workshop / service bays and stored in a 10,000l tank. From these locations 1,000l International Bulk

Container (“IBC”) with Fork Lift Truck (“FLT”) pallet base are filled and distributed to mine service areas

for slow moving vehicles.

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Compressed Air

The compressed air system is reticulated throughout the mine for use by the production drilling and

explosive charging equipment. The system also provides air for activation of the ore pass chute doors.

The pipework underground is 76mm and 102mm. On surface there are three Atlas Copco compressor

units, GA-250W-FF, GA-365-WSD and GA-315-VSD-FF which supply both the mine and the mineral

processing plant.

Water management

The mine hydrogeological environment is stratified and water entering into the mine is limited to areas

above the -150m level. All ground water ingress and water from the exhaust ventilation shafts is

captured, controlled and reticulated throughout the mine for drilling machinery and general mining

and maintenance activities.

A sophisticated system of basins, distribution pipework and pump stations connect all areas of the

mine for water, with surplus dewatered from the mine to the TSF. The quantity of water discharged

from the mine averages 43m3 per day (2017 YTD), and averaged 71m3 in 2016. The advanced control

of water enables dry working conditions throughout the mine.

16.9.3.1 Development and Production Drill Machine Water

A schematic showing drill machine water supply for development and production drilling is shown in

Figure 16.11.

Figure 16.11: Schematic Drill Water (2017)

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16.9.3.2 Dewatering Basins and Pipework

Dewatering basins and pipework are shown in Figure 16.12.

Figure 16.12: Schematic Mine Water Management (2017)

16.10 Equipment

The underground mining equipment is predominantly owned and operated by ZMAB. Some

contractor owned and operated equipment includes ore haulage fleet and associated road

maintenance, and shotcrete fleet. The equipment owned by ZMAB is shown in Table 16.7.

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Table 16.7: Underground Equipment List (Owned)

Type Manufacturer Number Notes

Drilling rig Atlas Copco 10 -

Drilling rig Volvo 1 -

Boltec Atlas Copco 6 2 Cable Bolt, 4 RockBolt

Various vehicles Brokk 1 -

Various vehicles Carl Ström 2 -

Various vehicles JAMA 1 -

Various vehicles Manitou 1 -

Various vehicles Mercedes 1 -

Various vehicles Normet 1 -

Various vehicles Weekmas 1 Road Grader

Forklift EP 2 -

Forklift Intra 1 -

Forklift Linde 1 -

Forklift Lundberg 2 -

Excavator Caterpillar 3 -

Excavator Mini maskiner 1 -

Excavator Volvo 1 -

Charging truck Atlas Copco 2 -

Charging truck Bolidens mekaniska verkstad 1 -

Charging truck GIA 2 -

Charging truck Volvo 1 -

Loader Caterpillar 4 LHD, 2900, 1700 units

Loader Sandvik 4 LHD, 3 x 517, 1 ancillary

Loader Volvo 13 FEL

Lifting table Carl Ström 1 -

Lifting table GIA 7 -

Lifting table Normet 3 -

Lifting table Volvo 2 -

Personel vehicles Ford 47 -

Personel vehicles Nissan 6 -

Personel vehicles VW 7 -

Personel vehicles Mercedes 1 -

Scaler Atlas Copco 1 -

Scaler JAMA 3 -

Heavy truck Volvo 3 -

Total units 144

The equipment operated by the contractors is shown in Table 16.8.

Table 16.8: Underground Equipment List (Contractor)

Type Manufacturer Number Notes

Forklift Jungheinrich 1 -

Loader Caterpillar 3 CAT FEL 980 type

Personel vehicles Dacia 2 -

Personel vehicles Ford 4 -

Personel vehicles Nissan 6 -

Personel vehicles Toyota 7 -

Heavy truck Volvo 21 10 Ore haulage, 2 Shotcrete, 3

Concrete Tumbler, 2 Water

Trucks, 4 ancilliary

Total 44

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Machinery Maintenance

The main underground workshops for mobile equipment maintenance are located on the -800m level,

close to the P2 shaft. The workshop is equipped with all necessary cranage, tools, and equipment to

maintain mining machinery such as LHD, roof/rock scaling, explosive charging trucks, working

platforms, service loaders and grader. The workshop team carry out engine and gearbox rebuilds as

well as all hydraulic cylinder and hose repairs. The workshop has sufficient warehouse storage for

operational requirements.

The drilling fleet (Development and Production) machinery is supplied by Atlas Copco and a

maintenance contract is in place for the maintenance of this equipment by Atlas Copco. Separate

workshops are in place for Atlas Copco personnel.

The haulage truck fleet and other contractor provided equipment is maintained by the contractor.

16.11 Human Resource Arrangements

The mine manager controls the technical services department, of approximately 12 persons including

strategic planning; along with the supervisory staff who control the operational staff. This team is

assisted by the geology department with specialist geo-technical mapping aiding the rock mechanic

monitoring.

The mine operates 365 days a year, 24 hours a day with five major shift patterns, based on 5d

afternoon, 2d off, 7d mornings, 1 week off. The night shift has two teams and patterns, Monday to

Thursday, followed by Friday to Sunday off; the weekend night team works Friday to Sunday with

Monday to Thursday off. Each shift overlaps for communication and planning. The evening shifts are

ore mucking, haulage contractors, paste back-fill and skip control. The manpower split is nominally

100 persons on day shift, 70 on afternoon shift and 45 on night shift.

There are approximately 200 operational and 40 technical and supervisory persons. The contractor

teams are nominally 20 persons covering truck haulage, and “shotcreting”.

16.12 Health and Safety Management

The mine operations have a dedicated Health and Safety Department with mine rescue, fire and safety

specialists, nurse, and regular visits by a doctor.

The mine regularly undertakes emergency and incident simulation exercises, as well as evacuation of

the underground workings.

There are approximately 34 UG mobile refuge chambers located throughout the mine, these are

equipped with compressed air, telephone, oxygen tanks and first aid kits. There are several permanent

refuge chambers, which are situated with the main crib rooms. These permanent chambers have

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substantial first aid facilities. The mine has an underground ambulance and mine rescue vehicle, AED

devices and a main first aid station at the -800m level.

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17 RECOVERY METHODS

The current ZMAB zinc-lead plant commenced production in 1977 and uses the conventional

processing technologies of crushing, milling, flotation and concentrate dewatering to produce zinc and

lead concentrates. The plant also produces paste for underground backfill.

In 2010, the copper circuit was commissioned to produce copper concentrates using a separate

grinding, flotation and dewatering circuit. In May 2017, the “1350 Project” was completed and a

second Autogenous Grinding (“AG”) mill was commissioned to be used in parallel with the existing

grinding circuit for both zinc and copper ores. This new AG mill, along with an existing ball mill, can

also be used for increasing the lead-zinc ore processing capacity of the plant, outside of the copper

ore processing campaigns.

The zinc and copper ores and waste rock are hoisted to surface and are fed through a common

screening and crushing plant.

17.1 Flowsheet Description

Stockpile and Crushing Circuit

In 2009, Metso Minerals (Metso) installed the crushing plant with the objective of increasing the

throughput of the AG mill. The circuit was later adapted in 2010 so that copper ore could be crushed

on a campaign basis and stockpiled separately from the zinc-lead ore. Recently the crushing circuit

has been simplified and in 2014 the practice of feeding all the ROM to the AG was initiated, without

the need for pre-screening.

A simplified flowsheet for the crushing circuit is shown in Figure 17.1

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Figure 17.1: Crushing Flowsheet

Three material types are brought to surface in campaigns via the mine hoist. These include zinc-lead

ore, copper ore and waste rock. Once treated through the crushing plant, seven products are

produced:

• Copper ore, unsorted;

• Copper ore grinding rocks;

• Zinc ore, unsorted;

• Zinc ore grinding rocks

• Zinc ore, -15mm;

• Zinc ore, -250mm +90mm; and

• Waste, -250mm.

The ore (crushed underground to minus 250mm) is hoisted from the P2 shaft and discharged over a

vibrating grizzly where the oversize rocks (+250mm) are scalped and reduced in size using a rock

breaker. The undersize of the grizzly can go one of two ways – either to a coarse ore stockpile in the

crushing plant yard from where a front-end loader can take the material for stockpiling or directly to

the vibrating mill feeders of the zinc-lead AG mill.

If fine crushed zinc-lead ore is needed, either to feed the ball mill or to improve the mill throughput

capability, the undersize of the grizzly is conveyed to a double deck screen fitted with 90mm and

15mm screen decks. The +90mm and – 15mm fractions are metered in required proportions, of 30%

lump ore (+90mm) and 70% finely crushed ore (-15mm), and conveyed to the primary AG mill feeders.

The -90 +15mm zinc-lead ore is conveyed to a double deck screen where the coarse fractions report

to a Metso HP4 cone crusher. The product from the cone-crusher reports back to the screen while the

screen undersize (-15mm) is conveyed to either of two fine ore stockpiles (one located outside and

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the other located inside a shed). Ore from the outside fine ore stockpile can later be reclaimed by

front-end loader and placed into the shed.

A Metso GP3005 cone crusher can be used to take ore from the stockpile and produce fine crushed

ore from the same screen used with the HP4 crusher circuit.

Autogenous Grinding

The majority of the zinc-lead ore is ground in a single Morgardshammar AG mill to 80% passing 105μm.

The mill is 6.5m in diameter, 8.0m long and powered by two variable speed 1,600kW motors.

The mill product is classified by a bank of Warman Cavex 250CVX10 cyclones with the underflows

returning to the mill and the overflows passing to the bulk zinc-lead flotation circuit. The critical size

material is screened from the mill discharge and conveyed back to the mill feed chute. The capacity of

the mill is between 100 tph and 110 tph.

A recently installed FAG mill, referred to as the “1350 Mill” is used to process zinc-lead ore outside of

copper campaigns. The mill shell is from a Metso/SALA AG mill reconditioned with Outotec bearings

and trunnion. The mill is 5.1m in diameter, 7.0m long and powered by two variable speed 900kW

motors.

The mill product is classified by a bank of Warman Cavex 250CVX10 cyclones with the underflows

returning to the mill and the cyclone overflows (P80 of 105µm) passing to the bulk zinc-lead flotation

circuit. The critical size material is screened from the mill discharge and conveyed back to the mill feed

chute.

A primary ball mill, known as the copper ball mill due to its use primarily to process copper ore, can

also be used to grind the zinc-lead fine crushed ore. The (-15mm) ore is conveyed to this 3.3m

diameter, 6.6m long Metso ball mill, fitted with a 1,250kW variable-speed motor. The ball mill is

operated in closed circuit with a cluster of three Krebs gMax cyclones of 381mm (15 inch) in diameter,

with a target product size of 80% passing (P80) 110μm. The capacity of this ball mill is 40tph.

The grinding circuit flowsheet is shown in Figure 17.2.

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Figure 17.2: Grinding Circuit

Flotation

The copper and zinc-lead ores are treated using conventional flotation technology in separate

flotation circuits. The flowsheets are shown in Figure 17.3.

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Figure 17.3: Zinc-Lead and Copper Flotation Flowsheets

17.1.3.1 Zinc-Lead Ore Flotation

The zinc-lead ore flotation circuit is unusual as it involves the bulk flotation of zinc and lead minerals

rather than the usual sequential flotation route. The cleaned bulk concentrate is then subjected to a

separation stage where zinc minerals are depressed and lead minerals floated.

The grinding circuit cyclone overflow is conditioned with sulphuric acid to reduce the pH to 8, for

sphalerite activation, followed by the addition of sodium isopropyl xanthate (“SIPX”) which is used as

the collector. The pulp is pumped to two 38m3 Outotec flotation machines and the concentrate from

these cells passes to the zinc-lead second bulk cleaning stage. The tailings pass through six 40m3 Metso

cells and the tailings from these cells are the final plant tailings. A glycol-based frother, NasFroth, is

stage-added at specific locations throughout all of the flotation stages.

The concentrates from the first two cells pass to the zinc-lead first bulk cleaning stage and the

concentrates from cells five to eight, used on a scavenging duty, are pumped to a 3.5m in diameter,

3.8m long Morgårdshammar regrind mill, powered by a 330kW variable-speed motor. The mill is

operated in an open circuit with Sala cyclones yielding a product P80 of about 50 µm.

The reground product is pumped back to the head of the bulk rougher circuit.

A total of four bulk concentrate cleaning stages are used, three equipped with a pair of 15m3 Metso

cells and one comprising two 16m3 Outotec cells. Each stage is operated along the conventional

arrangement where the concentrate of one stage proceeds to the following one while the tailings goes

back as part of the feed to the previous one. Exceptions to this scenario are found with the tails from

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the first and second cleaning stages with both streams are combined with the scavenger concentrate

and brought to the bulk circuit regrind mill.

The bulk zinc-lead concentrate produced from the fourth bulk cleaning stage is reground in a 2.4m in

diameter by 3.6m long Morgårdshammar mill, powered by a 330kW variable-speed motor, to 80%

passing 25μm. The mill is operated in an open circuit with a single Krebs cyclone. The zinc minerals are

depressed by the addition of sodium bisulphite before entering the separation circuit, with lead

minerals being concentrated. The separation circuit begins with a two-cell lead roughing stage

followed by a four-cell scavenging stage, all cells provided as 15m3 Metso cells. The scavenger tails are

the zinc concentrate. The rougher concentrate proceeds to the cleaning stage whereas the scavenger

concentrate is returned to the bulk concentrate regrinding stage.

Cleaning of the lead rougher concentrate cleaning is achieved in three stages consisting, respectively,

of 6 x 15m3 and 4 x 15m3 Metso cells and a third, locally designed and constructed, “JELE” flotation

cell.

Concentrate Dewatering

The lead concentrate passes to a 7m diameter Sala thickener and the zinc concentrate is dewatered

in a 15m diameter Sala thickener.

The concentrates are filtered using Svedala VPA vertical plate pressure filters, with one fitted with 40-

1.5m2 plates for the zinc concentrate and one of 32-1m2 plates used for the lead concentrate.

The filtered concentrates are discharged onto dedicated conveyors, transferring the products onto

stockpiles kept within an enclosed shed. From there, a front-end loader is used to load the

concentrates into trucks, for delivery to the port site.

Paste Fill

The processing plant staff are responsible for operating a paste backfill plant which consists of a 10.5m

diameter Baker Hughes thickener, a Dorr Oliver disc filter fitted with 11 discs of 3.25m diameter and

mixer tanks.

Cement is typically added at a rate of 1.5-2.0% for Secondary stopes, 4-6% for Primary stopes and up

to 8% for underhand stopes. The paste is pumped underground at 78% solids. Paste production in

2016 was 228,343 m3.

Copper Flotation

The copper circuit was commissioned in June 2010. From 2010 to 2016, a primary ball mill was used

to mill finely crushed ore. In 2017 the 1350 AG-Mill was commissioned and took over copper milling

duty during the 2017 copper campaign. The circuit has a design capacity of 300ktpa and the use of the

AG mill should effectively double this.

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The 1350 Mill is used to process copper ore during copper campaigns and is fed with the same

approximate proportions of 30% lump ore (+90mm) and 70% finely crushed ore (-15mm) that are used

for feeding the AG mill used exclusively on lead-zinc ore duty. The mill product is classified by a bank

of Warman Cavex 250CVX10 cyclones, with the underflows returning to the mill and the cyclone

overflows, featuring a P80 of 105 µm, passing to either the copper rougher or the bulk zinc-lead

flotation circuit.

All of the copper flotation stages comprise 15m3 Metso flotation cells. Rougher flotation takes place

in four 15m3 Metso flotation cells, followed by four scavenging cells. The rougher concentrates (first

four cells) are cleaned three times to produce a final copper concentrate assaying 25% Cu, with 90%

copper recovery. The first cleaner tailings and scavenger concentrate are re-ground in a 1.8m

diameter by 3.6m long ball mill fitted with a 132kW motor. The mill is operated in an open circuit with

15-inch diameter Krebs gMax cyclone, to provide a targeted product P80 of 30 µm.

The copper concentrate is dewatered using a 10m diameter Sala unit. The thickened concentrate is

filtered using a Metso VPA pressure filter with vertical plates.

17.2 Process Plant Consumables

The major process plant consumables, totalled for the two plants, are shown in Table 17.1.

Table 17.1: Plant Consumables 2016

Item Units Consumption

Steel media g/t 360

Xanthate g/t 62

Frother g/t 71

Flocculant g/t 6

Cement g/t 19,690

Sodium hydroxide g/t 194

Sulphuric acid g/t 1,146

Sodium bisulphite g/t 2,354

Electricity kWh/t 20

Power costs in recent years have been highly variable. Electricity is currently bought on the spot

market and the budgeted figure for 2017 was 0.375 SEK/kWhr. The plant consumables are typical for

the treatment of a moderately soft copper and zinc-lead ores.

17.3 Plant Sampling

The flotation plant is monitored using an Outotec Courier 6 on-stream analyser (OSA). Process control

analyses are undertaken for the critical process streams within the flotation circuits and are updated

every 10 minutes to give feedback to the operators on the plant performance. Daily (24hr) composite

samples are collected by the Courier system and samples of the filtered concentrates are also taken

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for metallurgical accounting purposes. Samples of the cyclone overflows are taken manually to

confirm attainment of the targeted P80s. A total of 10 zinc-lead and 4 copper samples are thus taken

each day.

The composite samples are delivered to the laboratory for filtering, drying, sample preparation and

analysis by the assay-laboratory XRF apparatus. The flotation feed, bulk concentrate and tailings

particle size is analysed daily in order to track changes in grinding.

Daily metallurgical balances are performed every day and monthly balance are also carried out, the

latter using accumulated cumulative metal amounts reported from the daily balances. The

concentrate stockpile tonnages are estimated by qualified personnel and reconciled with tonnages

from the balance, truck transport and shipping tonnes. A monthly composite sample is also used to

compare with the accumulated numbers. This sample is sent to an external lab with an accredited

method in order to check for bias.

17.4 Mill Labour

The Mill Manager is responsible for both the operation and maintenance of the copper and zinc-lead

processing circuits, the paste backfill plant, the tailings treatment facility and industrial service. The

concentrator is operated with five shift crews with a total complement of 60 personnel. The manning

levels are summarised in Table 17.2.

Table 17.2: Mill Labour 2017

Position No

Mill manager 1

HOD’s 7

Metallurgical staff 5

Production 25

Maintenance - Mechanical 15

Maintenance - Electrical 12

Laboratory 5

Safety 2

Tailings facility 4

Industrial service 7

Total 83

Day crews carry out routine tasks such as reagent mixing, ball loading, general clean-up etc. The plant

is scheduled to operate 24 hours per day, seven days per week.

17.5 Assay Laboratory

The ZMAB analytical laboratory only undertakes analysis of samples generated from the processing

plant. A Panalytical Axios-Max pressed pellet X-ray fluorescence (XRF) spectrometer was

commissioned and calibrated in 2015 to analyse the samples for the daily production balance.

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The laboratory receives 10 process samples each day (14 during copper campaigns). Pulp samples are

filtered, dried and representatively split to produce sub-samples (20-30g) for chemical analysis. The

flotation feed and tailings are pulverised prior to undertaking chemical analysis, as these samples

contain relatively coarse material. The sub samples are combined with binding agent and a hydraulic

press used to prepare a pressed pellet suitable for XRF analysis.

A representative proportion of the daily samples are sub-sampled to form a monthly composite. The

monthly composite samples are analysed using a longer method on the lab XRF before being sent to

ALS laboratories in Piteå which uses an accredited method and ICP-MS analysis. A comparison of XRF

and ALS values is undertaken as a form of QA/QC. The ZMAB analytical laboratory is not accredited.

17.6 Historic Production Data

Zinc-Lead Ore

The ZMAB zinc-lead ore plant annual throughput and head grades are shown in Figure 17.4.

Figure 17.4: Zinc-Lead Ore Plant Throughput and Head Grade

The plant throughput has increased over the period, reaching a maximum of 1.096Mtpa in 2015. In

2017 the plant had processed 0.807Mt by September (1.076 Mtpa equivalent). Zinc and lead head

grades have generally fallen in recent years and were 7.48% Zn and 3.16% Pb in 2017. The recoveries

of zinc and lead to their respective concentrates are shown in Figure 17.5.

0.0

2.0

4.0

6.0

8.0

10.0

12.0

0

0.2

0.4

0.6

0.8

1

1.2

1998 2003 2008 2013 2018

Hea

dG

rad

e%

Pb

,%Zn

Thro

ugh

pu

tM

tpa

Tonnes % Pb % Zn

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Figure 17.5: Zinc-Lead Ore Recoveries of Zinc and Lead

Zinc recoveries have remained consistent in recent years and in 2016 the recovery of zinc to zinc

concentrate was 90.0%. Lead recoveries have ranged from 82-83% for the last five years. The grades

of lead and zinc in their respective concentrates are shown in Figure 17.6.

Figure 17.6: Zinc and Lead Concentrate Grades

The lead concentrate grade is very high at 71.1% Pb (2017) although there has been a downward trend

in recent years, possibly reflecting the lower plant feed grade. The zinc concentrate grade has been

consistent in recent years, ranging between 52-54% Zn although the 2017 YTD figure is only 50.4% Zn

which may reflect the treatment of a more iron rich sphalerite, and cleaning circuit capacity limitations

under high metal throughput conditions.

50.0

55.0

60.0

65.0

70.0

75.0

80.0

85.0

90.0

95.0

100.0

Rec

ove

ry%

% Pb % Zn

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

Co

nce

ntr

ate

Gra

de

%

% Pb % Zn

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Copper Plant

The copper plant historic data is shown in Table 17.3, Figure 17.7 and Figure 17.8.

Table 17.3: Copper Plant Historic Data

Throughput Head Grade Recovery Conc. Grade

Year (tonnes) (Cu %) (%) (Cu %)

2010 27,296 2.20 90.0 24.1

2011 109,666 1.77 90.5 25.1

2012 144,988 2.30 91.8 25.1

2013 222,157 1.73 89.8 25.4

2014 167,289 2.28 90.7 25.0

2015 138,731 1.67 88.1 25.5

2016 106,027 1.97 91.8 26.0

2017* 75,590 1.46 88.3 25.5

* Year to Date September

Figure 17.7: Copper Plant Throughput and Head Grade

0.00

0.50

1.00

1.50

2.00

2.50

0

50,000

100,000

150,000

200,000

250,000

2010 2011 2012 2013 2014 2015 2016 2017

He

adG

rad

eC

u%

Thro

ugh

pu

ttp

a

Throughput Head Grade

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Figure 17.8: Copper Plant Recovery and Concentrate Grade

The copper plant throughput has varied since the start up, from 27,296t in 2010 to a maximum of

222,157t in 2013. Copper head grades have also varied significantly, from 1.46% Cu (2017) to 2.30%

Cu in 2012.

Copper recoveries have been fairly constant at between 88.1% and 90.8% as have the concentrate

grades which have ranged between 24.1% and 26.0% Cu.

Detailed Concentrate Analysis

The typical analyses of the zinc, lead and copper concentrates is shown in Table 17.4.

23.0

23.5

24.0

24.5

25.0

25.5

26.0

26.5

70.0

75.0

80.0

85.0

90.0

95.0

100.0

2010 2011 2012 2013 2014 2015 2016 2017

Co

nc

Gra

de

Cu

%

Cu

Re

cove

ry%

Recovery Conc. Grade

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Table 17.4: Concentrate Analyses

Element units Pb Conc Zn Conc Cu ConcPb % 70.8 2.5 1.25

Zn % 5.6 51.8 4.67

SiO2 % 0.8 4.5 1.35

Al % 0.1 0.5 0.11

S % 14.4 27.9 28.38

K % 0.0 0.3 0.07

Ca % 0.1 0.7 1.27

Mn ppm 336 2,332 590

Fe % 2.8 6.0 27.1

Co ppm 83.5 188 1011

Ni ppm 33.5 18.1 1312

Cu % 1.83 0.083 26.6

As ppm 72.6 177.9 866

Se ppm 11.0 37.7 10.0

Rb ppm 1.0 14.0 2.00

Y ppm 2.2 7.6 5.00

Zr ppm 6.9 34.2 8.00

Mo ppm 21.7 14.1 13.8

Ag ppm 1328 77.6 258.0

Cd ppm 161.5 1242 125.3

Sn ppm 11.6 2.2 4.1

Sb ppm 673 58.9 988

Te ppm 2.0 5.0 0.50

Ce ppm 8.0 25.2 0.00

Tl ppm 5.0 1.0 0.38

Bi ppm 48.6 2.3 43.96

The concentrates are of good quality and do not contain significant levels of penalty elements.

17.7 Concentrate Storage and Transport

Concentrate storage capacity at the mine is around 4,000 wmt for zinc concentrates, 2,000 wmt for

lead concentrates and 1,500 wmt for copper concentrates. The concentrates are weighed as the trucks

leave the warehouse at the mill on their way to the port of Otterbäcken. The concentrates are trucked

for five days per week with three turnarounds per truck per day (12 hours shifts/24 hours per day). At

Otterbäcken the concentrates are stored in a warehouse owned by the port operator, Vänerhamn AB,

and leased by ZMAB.

The storage capacity at Otterbäcken is around 30,000 wmt, divided into four storage bins with the

respective capacity of 10,000 wmt for zinc concentrates, 8,000 wmt for lead concentrates, 8,000 wmt

for copper concentrates and 4,000 wmt used for storage of a small quantity of mixed concentrates

coming from the cleaning of the port and warehouse after loading. This material is sporadically

trucked back to the mine for reprocessing.

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Stevedoring is performed by Vänerhamn AB under contract. Loading is performed by two front end

loaders filling an open top container inside the warehouse and then transporting the container from

the warehouse to the quay where a mobile crane is used for loading the vessel. The load rate is

approximately 500wmt/h.

Until June 2014, the side of the warehouse facing the lake was open. In June 2014, a joint project

between ZMAB and Vänerhamn AB was completed and since then the warehouse is fully enclosed. At

the same time, sampling and moisture determination facilities were put in place to serve all outgoing

cargoes of concentrate in compliance with moisture and transportable moisture limit (TML) control

procedures.

The warehouse is exclusively used for ZMAB concentrates. Vänerhamn AB also owns the terminal at

the port and have given the right to use the same to ZMAB. The terminal is fully International Ship and

Port Facility Security Code (“ISPS”) compliant.

The 2017 weighted average moisture content of concentrates, loaded at Otterbacken (October, 2017

to Ocober 23, 2017) are:

Copper Concentrate – 6.16%;

Zinc Concentrate – 9.12%; and

Lead Concentrate – 5.54%.

The concentrates are shipped from Otterbäcken by bulk vessels. Since Otterbäcken is located on Lake

Vänern and the vessels have to pass locks and a canal to reach the ocean, there are only a few ship

owners having suitable (shallow and narrow) vessels. ZMAB employs Thun, a Swedish shipowner, with

whom they have a long-term contract of affreightment.

Official weighing and sampling is normally done at the discharge port under the supervision of an

internationally recognized company.

All concentrates are predominantly sold under long term contracts directly to mainly European

smelters. However, some 10% to 15% of the zinc concentrate production is sold to trading companies

on a spot basis by tenders. The quality of all concentrates is typically high with few penalty elements

and there are no issues in selling the products. The commercial terms under the long-term contracts

are negotiated on an annual basis and the concentrates are sold at the respective benchmark smelting

terms or better.

All silver contained in the concentrates belongs to Wheaton Precious Metals under a silver streaming

agreement and is invoiced separately when the silver content reaches payable levels.

No major changes in the commercial terms other than treatment and refining charges which follows

the market are expected for the coming years.

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18 PROJECT INFRASTRUCTURE

Infrastructure associated with the operations includes the Zinkgruvan underground mine, mineral

processing plant and associated infrastructure and tailings storage facility (“TSF”). In addition, all ore

is trucked by road to a facility leased by ZMAB and located at the inland port of Otterbäcken, on the

eastern shore of Lake Vänern, where it is loaded on to sea going ships for transport to smelters.

As with virtually all of southern Sweden there is an extensive network of paved highways, rail service,

excellent telecommunications facilities, national grid electricity, an ample supply of water and a highly

educated work force. The mine site is well served by telecommunications with excellent mobile phone

coverage.

18.1 Energy

Electricity is obtained from the National Grid. The majority of electricity generation in the area is via

hydro-electric schemes. Annual energy consumption at the mine is approximately 110GWh (both

electric and fossil fuel energy).

The operation is fed from the Dalby Substation, which is controlled by the Utility provider Sweco. The

feed consists of two x 10KVA and two 20KVA power line / power cables. The electrical feed to the

mine was upgraded during 2016 and 2017 to enable spare capacity to be installed for future enterprise

requirements, along with separate and direct reticulation to the site, increasing the security of supply.

The recent upgrade also separated the power feed cables of the local village from those of ZMAB.

There is an emergency stand-by generator located at the P1 shaft to enable evacuation of personnel

through the hoist and some mine ventilation to be maintained in case of power supply interruption.

18.2 Water

The operation has an efficient water management system which maximises recycling of water and

transfer between the mining and mineral processing operations and TSF. Where necessary, the site

draws water from Lake Trysjon and Lake Åmmelångenn. The mine pumps approximately 600,000m3

of water per year from underground workings. Water removed from the underground workings,

together with all site drainage water, is sent to the TSF along with the tailings/mineral process plant

water. Approximately 60% of the water sent to the TSF is returned to the mineral processing plant;

when combined with the recirculation of water within the mineral process and paste plants, results in

a highly efficient water management system.

18.3 Tailings Storage Facility

Tailings are currently stored in the newly constructed and fully permitted Enemossen East TSF.

Enemossen East TSF comprises an expansion located to the eastern side of the existing Enemossen

TSF. A further expansion is also planned to the north of the existing Enemossen TSF and is termed as

Enemossen North TSF. Tailings are still being deposited in the existing Enemossen TSF to adjust the

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surfaces for reclamation purposes. The existing Enemossen TSF is also being used as a water

management area for the new East Enemossen TSF.

Existing Enemossen TSF

The annual production of tailings is approximately 1.1Mtpa, with 35% used as mine backfill and 65%

co-disposed at the Enemossen TSF and Enemossen East TSF, located about 4km south from the

processing plant, and shown in Figure 18.1.

Figure 18.1: Location of Enemossen TSF

The TSF is accessed from the north by the main pipeline route from the process plant to the disposal

facility. This route passes through the east edge of the Klarningsmagasin Water Storage Facility (WSF)

and close to Lakes Hemsjön and Viksjön. Tailings are pumped to the facility via twin 273mm ID HDPE

pipelines at a pulp density of 20 to 30% and are deposited by spigotting. The existing Enemossen TSF

covers an area of approximately 240,000m2 and is confined by two main embankments referred to as

the X-Y Dam and the E-F Dam, which were constructed on natural ground in the headwaters of three

streams. The dams were designed as water-retaining structures, and impounded the valleys draining

to the south into the Bjornbäcken River (X-Y Dam) and to the east directly into Lake Hemsjön (E-F

Dam).

Five saddle dams have been constructed to confine tailings deposition along the northern and western

perimeters of the facility.

The two main dams were raised over the lifetime of the TSF, both as centreline and downstream raises

and, from 2013, with upstream raises utilizing re-compacted tailings material. The original capacity of

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the Enemossen TSF was 12 Mm3 which equates to approximately 16.8 Mt of tailings. In December

2017, the reported deposited volume of tailings was 12 Mm3. The projected life of the facility was

planned until December 2017 but, due to better than expected deposition densities, ZMAB considers

that the Enemossen TSF has approximately another 18 months of capacity from October 2017.

WAI understand that the existing Enemossen TSF tailings permit expires in December 2017, however

due to better than expected tailings densification, ZMAB are in the process of extending this licence.

As part of the ongoing management of the TSF, a programme of monitoring and instrumentation has

been implemented comprising a combination of standpipe piezometers, BAT piezometers and

dewatering wells with flow meters in order to reduce the stability risk of the structures.

Two seepage collection trenches and a pump station are located at the downstream toe of the X-Y

Dam and one seepage collection pond and pump station is located at the downstream toe of the E-F

Dam.

All excess supernatant and flood water has historically been discharged under gravity via a series of

vertical concrete decant towers constructed adjacent to the E-F Dam and through the F-F1 Dam. The

construction of the current decant was completed around 2011. This decant tower is located in the

extreme north-east corner of the facility and is connected to the return pump station via a concrete

pipeline. An emergency spillway pipe is also located in the vicinity of this decant tower.

Enemossen East TSF

A new TSF has been constructed directly east of the existing Enemossen TSF and is termed Enemossen

East TSF, which was designed and constructed under the supervision of Knight Piésold Ltd. The first

stage of the TSF has been constructed with a minimum crest elevation of 175 m and consists of two

zoned embankments which are situated along the eastern side of the existing Enemossen TSF. The

facility utilises natural hillsides along the southern, eastern and northern ends as well as the existing

Enemossen TSF XY dam to create a confined storage area for tailings solids and supernatant water.

The total capacity of Enemossen East to its currently permitted height of 195.5 m is 5.0 Mm3 and this

will provide tailing storage until 2024. The design will allow further raises to the 204.0 m level and this

would provide a further 7.0 Mm3 of capacity.

The TSF Stage 1 embankments have been constructed as zoned structures consisting of the following:

A low permeability zone on the upstream;

A two-metre- wide fine filter located directly upstream of the crest centreline;

A two-metre- wide transition filter zone, located directly downstream of the crest

centreline and;

A rock buttress (Zone S) located downstream of the transition zone.

The Enemossen East TSF has two reclaim towers located in topographical low points within the basin

adjacent to the downstream toe of the existing Enemossen X-Y embankment. The towers are founded

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on bedrock and built to a minimum elevation higher than that of the operating elevation in the facility

during Stage 1 (175 m).

The towers will subsequently be raised in stages, based on the level of tailings in the facility and the

embankment crest elevation. Support rockfill around the towers will provide lateral support and help

mitigate the migration of fine tailings into the towers. Access to the towers is via an access road along

the existing bench on the downstream slope of the existing Enemossen X-Y dam.

Stage 1 had been completed and signed off at the time of the site visit by WAI, however tailings

deposition had not started.

Enemossen North TSF

A further expansion is planned with subsequent centre line raises proposed to the north. This

expansion TSF is termed as Enemossen North TSF. This will also be a staged TSF with Stage 1 covering

30 hectares with a capacity of 3.3 Mm3.

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19 MARKET STUDIES AND CONTRACTS

All concentrates, zinc, lead and copper, are predominantly sold under long term contracts directly to

European smelters. However, some 10 to 15% of the zinc concentrate production is sold to trading

companies on a spot basis through a tender process. The concentrates are all considered quite

marketable with few deleterious elements and there are no issues in selling the products. The

commercial terms applicable to the long-term contracts are negotiated on an annual basis in line with

the long-term market.

All silver contained in the concentrates belongs to Wheaton Precious Metals (formerly Silver

Wheaton) under a silver streaming agreement and is invoiced separately when the silver content

reaches payable levels.

No major changes in the commercial terms other than treatment and refining charges which follows

the market are expected for the coming years.

Credit risks are managed under a strict credit management programme which was implemented in

2011 and which monitors the clients’payment performance as well as restricts the credit exposure.

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20 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT

20.1 Environmental & Social Setting and Context

The Zinkgruvan mine and associated facilities are located adjacent to Zinkgruvan village in Askersund

Municipality, Örebro County. Zinkgruvan village has around 290 inhabitants. Other nearby towns

include Åmmeberg and Askersund, located around 10km and 15km from the mine, respectively.

The Enemossen TSF is located 4km to the south of the mine’s industrial area. A summer house

community can be found in Larstorp, roughly 100m south of the TSF. The nearest permanent residents

to the mine are in Kristineberg, around 1km to the east of the TSF.

There has been a history of mining at Zinkgruvan dating back over 150 years and most the operations

workforce lives locally. Forestry and agriculture complement mining as a main source of income in the

area; ZMAB is the municipality’s largest private employer.

20.2 Method of study and information sources

The documents reviewed and considered relevant for ZMAB are:

Waste Management Plan (“Avfallsplan”) for 2018-2020, published 2017, Zinkgruvan

Mining AB;

LMC Health and Safety Report for the period ending 30 September 2017, Lundin

Mining Corporation;

Zinkgruvan TSF: Enemossen East Design Memo, 25 September 2017, Knight Piésold

Limited;

Zinkgruvan TSF: Enemossen North Conceptual Design Memo, 25 September 2017,

Knight Piésold Limited;

Safety Statistics, September 2017, Zinkgruvan Mining AB;

Zinkgruvan Safety Action Plan, 2017, Zinkgruvan Mining AB;

Responsible Mining Management System Standard, March 2017, Lundin Mining

Corporation;

Five-Year Social Performance Strategy, 2017 (draft), Zinkgruvan Mining AB;

Independent Third-Party Geotechnical Tailings Review Programme, January 2017,

carried out by BGC Engineering Inc. and commissioned by Lundin Mining

Corporation;

Environmental, Health & Safety and Product Stewardship Audit 2016, April 2017,

carried out by ERM and commissioned by Lundin annually;

Traffic Noise Baseline and Impact Assessment (“Trafikbullerutredning”, Swedish),

2017, carried out by ÅF-Infrastructure AB and commissioned by Zinkgruvan Mining

AB;

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Environmental Noise Baseline and Impact Assessment (“Externbullerkartläggning”,

Swedish), 2017, carried out by ÅF-Infrastructure AB and commissioned by

Zinkgruvan Mining AB;

Community Survey (“Invånarundersökning”, Swedish), 2017, carried out by

Marknadskraft AB and commissioned by Zinkgruvan Mining AB;

Crisis Management Plan for Zinkgruvan (“Krisplanen 3.2”, Swedish), May 2017,

Lundin Mining Corporation;

Environmental Competence Plan (“Personalens Kompetens & Miljöutbildning”),

2017, carried out by YMK and commissioned by Zinkgruvan Mining AB;

Environmental Report v1.0, Zinkgruvan Mining AB;

Sustainability Report, 2016, Lundin Mining Corporation;

Partial Ruling on Mining License Application, Case M 2927-12/M 1421-11 (“Tillstånd

till fortsatt gruvverksamhet mm i Zinkgruvan samt tillstånd att anlägga och nyttja

nytt magasin för anrikningsand”), 30/01/2015, produced by Alrutz’Advokatbyrå AB

for Zinkgruvan Mining AB (updates regarding environmental conditions 17/02/2017

and 29/09/2017);

Group Procedures for Biodiversity Management (2015), Mine Closure Planning

(2015), Water Management (2014), Air Quality/GHG Management (2014), Lundin

Mining Corporation;

Air Quality Management Plan for Zinkgruvan, 2015, Zinkgruvan Mining AB;

Water Management Plan for Zinkgruvan, 2015, Zinkgruvan Mining AB;

Biodiversity Management Plan for Zinkgruvan (“Plan för biologisk mångfald”,

Swedish), 2015 - Second Revision, Lundin Mining Corporation;

Mine Closure and Rehabilitation Plan (“Efterbehandlingsplan”), 2015, carried out by

Nils Eriksson for Zinkgruvan Mining AB;

Complementary Environmental Impact Assessment (“Kompletterande

miljökonsekvensbeskrivning gällande justerat förslag till nytt sandmagasin vid

Zinkgruvan”), December 2013, carried out by Svensk MKB on behalf of Zinkgruvan

Mining AB;

Energy Efficiency Plan, Appendix 2: Transportation (“Energieffektiviseringsplan”,

Swedish), 2011-2016, Zinkgruvan Mining AB; and

Environmental Impact Analysis – App. C (“Miljökonsekvensbeskrivning gällande

fortsatt verksamhet och nytt sandmagasin vid Zinkgruvan”), 2012, carried out by

Svensk MKB on behalf of Zinkgruvan Mining AB;

The term “international best practice standards”refers to the sustainability standards of International

Financial Institutions (“IFIs”), including the IFC Sustainability Framework and EBRD Environmental &

Social Management Framework, as well as guidance offered by sector-specific institutions, such as the

International Council on Mining & Metals (“ICMM”).

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20.3 Access to the Site

The mine has good local road access and is close to the main E18 highway linking Stockholm and Oslo.

National Road 50, which runs northward to Örebro and southward to Motala, is the main access road

to Askersund District. The mine can be accessed from Askersund settlement (15km) by district road

592 and subsequently roads 586 and 590.

Rail and air links are available at the town of Örebro (35km away). Lake Vänern, the largest lake in

Sweden, is around 50km away and provides access to coastal shipping via a series of inland canals and

the port of Göteborg.

20.4 Water Resources

ZMAB has a Water Management Plan, which covers water baseline aspects, site water management

planning, water use efficiency and impacts of the mine (environmental and social) on surface water

and groundwater environments. The Plan has been developed in line with Lundin’s corporate-wide

HSEC Standard GSPE.002 (Water Management) and is to best practice standards.

Surface waters

The Zinkgruvan mine is located close to northern Lake Vättern in an area with numerous,

natural small lakes and streams/rivers, all of which flow/discharge to Lake Vättern.

Of significance are the surface water bodies of the Enemossen TSF, an area of former boggy terrain

that now forms the principal tailings disposal facility for the mine, a small natural lake called Hemsjön,

situated immediately to the south of the current TSF, and a Clarification Pond (“Klarningssjö”),

artificially created by as decant water from the TSF, flowing by gravity to a holding lake to settle any

solids prior to pumping water back to the plant for use in the process. Excess water is discharged to

the Creek Ekershyttebäcken. Water in the clearing pond has an average residence time of around 7

days.

Groundwater

Groundwater, where not disturbed by abstraction or discharge, typically follows topography and is

usually present at shallow depths in the valleys. Groundwater flow is through fractured bedrock on

the hills at depth under the valleys and is also modified by fracture and fault zones.

The underground works are dewatered and water pumped to the surface at the rate of 600,000m3/y.

All water pumped from the mine workings is used in mineral processing. Two water catchments are

covered by the footprint of the TSF: the west-flowing Ekershyttebäcken-Dalby valleys, and the east-

flowing Björnbäcken-Höksjön valley. There is a hydrogeological programme underway to confirm

regional and local hydrogeological regimes. This programme will be conducted over the course of the

next year.

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Water supply

The mineral process plant makes extensive use of water recycling, with 50% of the water sent to the

TSF returned to the mineral processing plant. Water removed from the underground workings,

together with all parts of the site drainage water, is sent to the TSF with the tailings/process water.

The underground operations are able to abstract water from Lake Åmmelången for use in the mineral

process plant and in the mine. The current permit allows pumping of up to 50 l/s as an annual average,

currently 35 l/s water is abstracted. Water is pumped via a pipeline running along the track bed of the

disused railway that took ore from the mine to the former processing plant at Åmmeberg, situated on

a bay in Lake Vättern. The water is pumped to a freshwater lake situated immediately adjacent to the

mine site approximately 10km from where it is extracted. There are two public water abstraction

zones nearby: one is 1km west of Enemossen, the other 3km to the east.

ZMAB maintains a risk and incident register for water-related aspects. This register is in line with

international best practice standards and, along with the Water Management Plan, is updated and

reported regularly to appropriate company officers on site and at the corporate level.

20.5 Infrastructure and Communications

The current mining operation is characterised by the presence of a small set of ancillary buildings and

offices centred around a mineral process plant (with attached chemical reagent store and lined

contingency ponds), mine shaft headgear, crushing facilities, mined ore stockpiles, stores and

maintenance buildings, fuel and waste storage areas.

In the Zinkgruvan village, community infrastructure is densest to the east of Trysjön lake but also exists

north and south of the Nygruvan area. The distance between the mineral process plant and the

nearest inhabited house is around 50m, though more densely inhabited parts of the settlement start

around 200 to 300m from the mine site.

20.6 Project Status, Activities, Effects, Releases and Controls

Current operations

Compared with previous reporting, the principal difference with this review, from an environmental

perspective, is the use of Enemossen East as a suplimentary TSF from 2017 onwards.

Current operations at Zinkgruvan comprise the underground mining of sulphidic zinc, lead and copper

ores, autogenous grinding, production of concentrates by flotation for sale and disposal of tailings at

a purpose-engineered TSF at Enemossen.

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Licences and Permits

The mine is currently operated under an Environmental Licence granted by the Swedish authorities

for mine life extension and a new tailings management facility. The application was submitted to

authorities in August 2012 (2015-01-30, case M 2927-12 and case 1421-11) and approved in January

2015 for the extraction and processing of 1.5Mtpa of ore, including a maximum of 1.2Mtpa of zinc and

lead ore and 0.3Mtpa of copper ore.

The licence was granted provisionally based on conditions relating to dust emissions from the

industrial area and new TSF, discharge to the aquatic environment (including choice of discharge point

for processed sewage water) as well as for noise and vibrations. Currently, the remaining item for

ZMAB to fully comply with relates to discharge to the aquatic environment, in line with the Swedish

Environment Agency’s standards (Handbook 2010:3). According to the most recent documentation,

the anticipated date for completion of these works is 14/12/2018.

Other relevant active permitting at Zinkgruvan includes:

28/01/2016: Transfer of water from Viksjön to Björnbäcken, Askersund and Motala

Districts to counterbalance water extraction for the mine’s operation;

12/08/2010: Discharge of copper, chromium, sulphate and phosphorus to the aquatic

environment, initially on probationary terms;

31/08/1990, Water Court case VA 52/1989: Zinkgruvan Mining owns the right to

extract and divert water for the mine and processing facility in accordance with the

verdicts from 08/12/1976 and 30/10/1986 on case VA/521975 and the verdict of

31/08/1990 on case VA 52/1989; and

The TSF permit at Enemossen currently expires 01/12/17, however, the new

Enemossen East can be used for tailings deposition while ZMAB extend this permit.

Land Ownership

The mine owns sufficient freehold surface land to accommodate the existing and planned mine

infrastructure. The mine’s current operations sit within the following properties owned by ZMAB, as

designated by the Swedish Planning Authorities:

Isåsen 1:35 (head office and old workshop);

Övre Knalla 1:20 (workshop and storeroom; and

Kristineberg 1:8 (waste and processing facilities).

Several other properties in the area are on land designated for mining by Swedish Mineral Laws,

including Kristineberg 1:16 and 1:36, and Nedre Knalla 1:2, 1:6 and 1:16 (TSF and Clarification Pond).

Of these, Kristineberg 1:16 is owned by ZMAB.

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20.7 Energy Consumption and Source

Energy for the mine is mainly sourced from electricity (~67%) as well as diesel (~28%) and some fuel

oil (~5%). In 2016, the total annual energy consumption and cost were:

47,911 MWh for above-ground processes (cost of 20,094,000 SEK); and

48,171 MWh for below-ground processes (cost of 19,777,000 SEK).

Lundin is committed to reducing energy consumption and Greenhouse Gas (GHG) emissions at its

global operational sites through corporate-level efficiency initiatives with a corporate commitment to

reduce GHG by 1% across the company., for 2017, at ZMAB these included:

Early-stage energy/GHG emission reduction assessment projects initiated, including

changes to lighting above and below ground, installation of lighting timers/movement

detectors, and regulation of heating;

Implementation of four energy-saving projects completed in 2016, including

enhancement of the switch made in 2015 from gas oil heating to renewable energy by

adding a bio-pellet burner for use in conjunction with the bio-oil burner, further

insulation of building roofs, recycling of process heat, and changes to light fittings

above ground; and

Data available for three of the four fully implemented initiatives indicate an estimated

annual saving of 6,800 GJ of energy with a resulting annual GHG emissions saving of

16 tonnes CO2.

ZMAB commissioned comprehensive energy surveys for site buildings in 2015 and mining activities in

2016.

20.8 Mine Waste

Tailings sand is the only type of mine waste generated at Zinkgruvan, classified as emanating from

either zinc, lead or copper ore.

Tailings Properties & Treatment

Current operations at Zinkgruvan comprise the underground mining of sulphidic zinc, lead and copper

ores, autogenous grinding, production of concentrates by flotation for sale and disposal of tailings at

a purpose engineered TSF at Enemossen. Some tailings are thickened to paste, mixed with cement

and used to backfill active mine stopes.

Since 2016, Lundin has conducted third-party geotechnical tailings reviews of ZMAB’s Tailings

Management System. All operational sites were auditied in compliance with the Lundin commissioned

Tailings Stewardship Review Programme. This programme was introduced at all Lundin mine

operations in 2016 to reduce or mitigate significant geotechnical risks associated with tailings

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management facilities, identify opportunities to implement best management practices, and to

provide consistency between sites.

As the Enemossen TSF neared full capacity, ZMAB applied to develop and manage a new tailings

facility. through a stepwise expansion of the existing Enemossen facility to the east and north (creating

the additional TSF facilities named “Enemossen Östra” and “Enemossen Norra”, respectively). The

new facilities will be delimited by Enemossen’s current dams, by natural partitions and by two new

dams (the East “Östra” and North “Norra” dams).

Non-Mining Waste

ZMAB has a site-specific Waste Management Plan (“WMP” for the years 2018-2020), developed as an

update to the previous Plan (2015-2017) to comply with the conditions of the current Mining License

application dated 30/01/2015. The WMP covers all waste originating from the mine, except for tailings

and overburden used for backfilling the mine and in the construction of dams for the tailings facility.

20.9 Water Management and Effluents

The decant water from the tailings dam flows by gravity in an underground pipe line to the clarification

pond. Pumps transfer recirculation water back to the concentrator to be used as process water. The

rest of the water from the pumphouse flows by gravity in an underground pipe line to a discharge

tunnel at the Ekershyttebäcken Creek.

Most of the site drainage and any arisings from sensitive areas around the site are collected in sumps

and then pumped to one of two emergency storage ponds. These ponds clarify the liquid, allow solids

to settle and the clear water pumped to the TSF with the tailings. Apart from the excess water

discharged from the tailings facility, there are no aqueous effluents discharged from the site. The site

drainage not directly collected, will report to the Lake Trysjön from which fresh water is collected for

use in the process. Water management is conducted so that no water is discharged from the lake into

the natural waterways.

20.10 Air Quality

Continuous dust monitoring around the site has been established since August 2012. A total of 3

monitoring locations are inside the mine site and one is located outside the boundary of the site.

ZMAB’s 2015 Mine Permit sets out terms for air quality emissions to air in the surrounding

environment from ventilation plants or extraction from crushing plants shall be cleaned or treated so

that the emission of dust from each point source does not exceed 10 mg/Nm3. Function control and

measurements take place to such an extent that compliance with the terms can be adequately

followed up.

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ZMAB has developed an Air Quality Management Plan (“AQMP”) relating to particulate matters and

Greenhouse Gases (GHG), written to comply with Swedish environmental standards and Lundin’s

corporate Air Quality and Greenhouse Gas standards.

20.11 Noise and Vibration

ZMAB commissioned ÅF-Infrastructure AB to conduct an environmental noise and vibration survey in

June 2017, including noise baselines and proposed mitigation measures to reduce noise and vibration

levels at selected receptor points in line with Nordic industrial standards. The survey showed that

temporary (maximum, short-term) noise levels exceed standards at three of the six receptor points

measured. Whereas average daytime noise levels are within standards, average night-time noise

emissions fall above the 40 A-weighted decibels (“dBA”) guidance by 1-3 dBA at four of six receptor

points. The survey showed that site aspects emitting the highest noise levels are ore processing

machinery and vehicles.

Noise monitoring has demonstrated that noise levels are not a problem during the day. However,

monitoring at the closest residential properties had demonstrated that night time limits of 45dB(A)

can be exceeded. To mitigate this, a ~16m high bund has been constructed around the site, adjacent

to residential properties in Zinkgruvan.

ZMAB also commissioned ÅF-Infrastructure AB to conduct a traffic noise survey in 2017 using selected

receptor points located near road 592, where the majority of the mines traffic passes. The land around

six dwellings located directly adjacent to the road exceeded standards set by the Swedish

Environmental Protection Agency (“Swedish EPA” or “Naturvårdsverket”) by 1-3 dB, based on an

estimated volume of traffic comprising 14 heavy vehicles per hour to the mine, which has been

estimated to make up around 60% of heavy vehicle traffic on road 592 (westwards). To Swedish EPA

standards, mitigation measures are not necessary for reducing the noise emissions to the general

environment as measured in the study.

20.12 Hazardous Materials Storage and Handling

Hazardous waste storage and handling is the same above and below ground and carried out in line

with Swedish legislation. The principal varieties of hazardous waste produced at the site are oils and

hydrocarbons, batteries, lower energy light sources containing mercury, industrial chemicals, paints,

electronic waste and pressure-treated wood.

Waste oils are collected and removed from the site by an appropriately licensed operative. Solid

hazardous wastes (e.g. batteries) are collected and stored in separate containers in the area used to

store other waste streams for off-site disposal.

20.13 Biodiversity and Ecosystem Services

ZMAB has developed species inventories for areas adjacent to operations for classification in terms of

natural values and biodiversity. It has also put in place mitigation measures to protect flora species in

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an area of high natural value adjacent to the footprint of the new tailings facility, including relocation

of a Swedish protected orchid (Dactylorhiza incarnata) to a nearby sheltered area, with proposed

management and monitoring from 2017 to 2019.

ZMAB maintains the transfer of water from Lake Viksjön to maintain the flow rate in a creek

(Björnbacken) that flows through a valley of high natural value and is at risk of reduced flow rate due

to the expansion of the tailings facility. ZMAB considers that nearby lakes are of high cultural value

and, as such, the operation considers it to be a key priority to ensure these lakes are not adversely

impacted.

ZMAB has developed a Biodiversity Management Plan (“BMP”) in accordance with the Lundin

Standard. It was initially produced in 2013 and revised in 2015.

20.14 Fire Safety

The mine has several trained fire safety specialists (15 people are trained as fire officers) and

extinguishers are located in the offices/surface buildings. There is a trained fire officer present as part

of each shift. The mine manager is responsible ultimately for fire safety. In the event of a major

incident, on-site staff would be supported by professional fire fighters from Askersund and/or

Mariedam (approximately 10km away).

20.15 Environmental and Social Impact Assessment

An Environmental Impact Assessment (“EIA”) to Swedish, European and International standards was

commissioned in 2012 to assess the environmental consequences of continued mining operations at

Zinkgruvan, including the development of a TSF, an expansion of Enemossen towards the north and

east. The 2012 EIA set out a number of key areas for management control which are encapsulated in

the site operating procedures and environmental management plan.

Mitigation measures for all potentially significant negative aspects are also set out in the 2012 EIA,

including social aspects. The report also states that the Project’s continued development is vital for

the economy of local settlements and that, in this context, potential negative environmental impacts

are relatively small.

20.16 Environmental Management

Lundin does not operate a formally accredited Environmental Management System, such as ISO

14001, however the mine operates in accordance with international best practice standards and new

Lundin Mining Corporate Responsible Mining Management Standards. ZMAB has a designated EHS

Manager who reports directly to the General Manager of the mine and subsequently with regular

reports to corporate directors at Lundin.

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Environmental policy and company approach

Since 2015, Lundin’s company policies around health, safety, environment and community aspects are

set out in a Responsible Mining (“RM”) Policy.

Lundin’s Responsible Mining Framework (“RMF”) outlines the Company’s overall approach to mining

responsibly in the context of Health and Safety, Social, Economic, Environmental Stewardship and

Guidance elements. The implementation of the RMF and the commitments outlined within the RM

policy are supported by and delivered through a Responsible Mining Management System (“RMMS”),

which intends to reduce the potential for occupational injuries and illnesses, and to support in the

prevention of health, safety, environment and community incidents. The RMMS comprises of 16

requirements which describe mandatory criteria that apply to all Lundin operations. These criteria

reflect international best practice and the company’s different sites are encouraged to develop the

application of these requirements in a site-specific manner.

Environmental Management Staff & Resources

ZMAB has had a staff Environmental Competence Plan (“ECP”) in place since 2005, setting out

expectations for competency around environmental aspects amongst staff and contractors. The plan

includes the definition of minimum required relevant qualifications, training requirements and

methods for communicating competence on the environment, primarily through the company’s

internal computer database (“AGDA”).

The HSE department at the mine comprises 10 people including 3 dedicated, specialist environmental

engineers who are responsible for sampling, and environmental monitoring around the site. Currently

all environmental samples are analysed off-site.

Environmental Systems and Work Procedures

Lundin has developed several company-wide environmental management planning procedures,

including for air quality and GHGs, water management, mine closure planning and biodiversity

management (Environmental Programmes). These group procedures are written in support of the

Responsible Mining Framework, developed to ensure that all Lundin’s operations implement effective

management of environmental aspects during exploration, mine planning, development, operations,

mine closure and aftercare.

Environmental monitoring, compliance & reporting

ZMAB continues to monitor relevant environmental aspects in line with Lundin reporting standards.

On behalf of Lundin, ERM carried out an Environmental Audit in 2016, some of the outstanding audit

findings, have been carried forward into the following years RMMS Implementation action plan.

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Emergency preparedness and response

Emergency preparedness and response for personnel is formalised on the corporate level within

Lundin’s RMMS Requirement 11 entitled ‘Crisis & Emergency Response’. The standard aims to ensure

that processes are established to protect personnel, to minimise business disruption, and to mitigate

negative impact to the community, the environment and assets in the event of an emergency.

Lundin has developed a comprehensive site-specific Crisis Management Plan for the Project. The plan,

which is continuously revised and was most recently updated in May 2017 (v3.2), includes general

company policy, guidance for its activation and application in a step-by-step manner, and appendices

featuring contact details of key staff members, details about emergency shelter room locations and

crisis communications information.

The site-specific 2017 Safety Action Plan includes a schedule for drills relating to emergency response

and evacuation, consists five evacuation drills in the underground mine and mineral process plant (1

of which will be conducted with the community fire brigade) and one evacuation drill at all offices.

Training

The HSE manager is responsible for training at the mine. Training for personnel is formalised on the

corporate level within Lundin’s RMMS Requirement 8 entitled ‘Awareness, Competency & Training’.

The requirement aims to ensure that the workforce is hazard aware, trained and competent to safely

and effectively carry out assigned work in accordance with the RMMS and applicable internal and

external HSEC requirements.

The site’s 2017 Safety Action Plan consists of several statutory trainings, including Blasting for miners,

High pressure water flushing, Material handling of hazardous goods, Requirements for electrical

installations, Safe lighting and rigging, Hot working, Hazardous chemicals and Operation of trucks.

20.17 Social and Community Management

ZMAB is developing a comprehensive Five-Year Social Performance Strategy, (“Strategy”) which is

currently in draft stage, and will be completed in January 2018. The strategy is aligned with ZMAB’s

operational plans, reflects the socioeconomic context and provides best practice guidance for

strategic and proactive stakeholder engagement, community investment, and communications.

Stakeholder Dialogue and Grievance Mechanisms

Stakeholder engagement is formalised on the corporate level within Lundin’s RMMS Requirement 9

entitled ‘Communications & Stakeholder Engagement’. The requirement aims to ensure that

processes are established to effectively communicate, consult and engage with internal and external

stakeholders on all matters related to HSEC. The formal standard includes general communications

procedures, internal communications, stakeholder engagement and customer engagement.

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ZMAB maintains a grievance register, which tracks complaints as well as responses and mitigation

measures, where relevant. Three grievances were received in 2016 and five in 2017 (until October).

Most recent grievances pertain to vibration damage and traffic (excessive noise and speed). The most

common method for submitting grievances is by telephone. In 2018, a corporate grievance

management standard and guidance note will be developed to ensure all operations are following

best practice and meeting international standards in grievance management.

A comprehensive account of ZMAB’s stakeholder engagement strategy and plan can be found in

Strategy.

Social Initiatives and Community Development

Overall, ZMAB are viewed positively by local communities. In February and March 2017, ZMAB

commissioned Marknadskraft AB to conduct a survey of residents of Zinkgruvan and Åmmeberg to

better understand public opinion around the mine’s development. Of 702 households queried, 305

(43%) provided responses either on a dedicated webpage or by letter. Questions were answered on a

scale of 1 to 5, signifying negative to positive opinions, respectively. Nearly all respondents (97%)

suggested that they consider ZMAB to be an important aspect of their local community. The least

positive score was given to respondents’views on ZMAB’s information dissemination policy, judged

to be positive by 64% of overall respondents and just 43% of residents of Åmmeberg. ZMAB’s company

magazine ‘Zinktrycket’was seen as respondents’favourite method of receiving information about the

mine. A majority of respondents (86%) report that they consider it easy to contact ZMAB and that they

receive replies to their queries (76%). Overall, 87% of respondents believe that ZMAB is a good

employer.

A comprehensive account of ZMAB’s community investment strategy and plan can be found in the

Strategy. To date ZMAB has contributed to several community initiatives including the Knalla mine

museum which is intended to bolster tourism in the local region. The museum is located near the

current mine and recently integrated the Knalla underground shaft (operational 1857-2004). This

tourism project was developed by ZMAB in collaboration with Atlas Copco, the municipality of

Askersund and the Countryside Society. Visitors can participate in an underground mine tour since the

summer of 2016. The museum has attracted over 2,000 visitors.

Community investment initiatives planned for 2018 include the Komtek programme,

training/apprenticeship programme for a womens entrepreneurs network and an expansion of Knalla

mine museum to incorporate modern mining innovation and other programmes to attract women to

the mining industry. Beginning in 2018, ZMAB will work in partnership with the Lundin Foundation to

develop and implement programmes for small business incubators to advance local entrepreneurs

and promote economic diversification. The Strategy also includes potential community investment

activities for 2019-2022 which will be developed based on the evolving socioeconomic challenges and

opportunities in the local region. ZMAB continues to develop social media to better communicate with

members of local communities, including via Facebook (page has currently around 800 followers) and

LinkedIn.

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20.18 Health & Safety

Health & Safety (“H&S”) is a key driver of Lundin’s RMMS. The corporate strategy states that each

operation must establish and maintain a health and safety management programme that includes

formal procedures and processes that address a comprehensive set of key H&S factors. Lundin

develops regular Health & Safety Reports encompassing all its sites and including a summary of safety

statistics, safety initiatives, incidents resulting in lost time, significant/high-potential incidents and

personal medical incidents.

ZMAB has developed a site-specific Safety Action Plan, which aligns the site’s safety culture with

Lundin’s corporate-level objectives as outlined within the RMMS. Specific aims of the 2017 Plan

include emphasis on fatality prevention, elimination and treatment of high potential hazards,

employee and supervisor hazard recognition skills, housekeeping improvement and the prevention of

injuries. The Safety Action Plan includes site-specific operational objectives as well as a summary of

planned H&S activities or initiatives for the year.

Environmental Resources Management (“ERM”) was appointed by Lundin to undertake a 2016

Environment and Health & Safety Audit of its global mine site portfolio, including ZMAB. The Audit

identified strengths, best practices and potential risks. The Audit reports that ZMAB has adopted a

strategy called ‘8 Rules to Prevent Accidents’, which is not currently fully aligned with Lundin’s

corporate protocols. Closure of Audit findings is listed as a key operational objective within ZMAB’s

2017 Safety Action Plan.

ZMAB maintains comprehensive Health & Safety records and historical statistics. Over the past

decade, the general trend is towards lower incidence of accidents, including those leading to a leave

of absence and those also requiring medical treatment. ZMAB also encourages its staff to report near

misses, that is, the occurrence of situations that could potentially lead to accidents.

ZMAB participates in several mining H&S associations and initiatives. A new H&S Coordinator will be

appointed in January 2018. ZMAB’s HR Department is also tasked with wellness and health

programmes, including subsidies for health activities, coaching and leisure activity groups. On the site

level, internal H&S audits are carried out biannually in Q2 and Q4. No external audits were planned

for 2017.

The local community health care office Askersundshälsan delivers the site’s occupational health

monitoring, Statutory health controls for silica, lead and vibrations, blood lead testing; chest X-rays;

and drugs testing.

20.19 Mine closure plans

A comprehensive conceptual Mine Closure Plan (“MCP”, 2015) developed to Swedish standards is in

place, covering the general area, mine and tailings facility. The current closure costs are estimated at

SEK195M. This plan will be reviewed and assessed against Lundin standards in 2018.

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21 CAPITAL AND OPERATING COSTS

21.1 Mining Costs

The mining operating cost forecast for 2018 to 2022 is shown in Table 21.1.

Table 21.1: ZMAB Mining Operating Cost - Forecast 2018 to 2022

Item Unit 2018Forecast

2019Forecast

2020Forecast

2021Forecast

2022Forecast

Labour MSEK 198.2 200.1 202.1 204.2 206.2

Contractors MSEK 193.0 194.9 196.9 198.9 200.9

Energy MSEK 22.5 22.7 23.5 23.2 22.6

Explosives and Detonators MSEK 20.4 20.6 21.3 21.1 20.5

Filling and Reinforcement MSEK 70.6 69.7 72.3 71.4 69.3

Maintenance MSEK 58.7 59.3 59.3 59.3 59.3

Other MSEK 54.2 52.2 52.2 54.0 54.0

Total Mining Cost MSEK 617.7 619.6 627.7 632.0 632.8

Less CapitalizedDevelopment

MSEK -122.7 -154.8 -159.5 -143.3 -118.8

Less CapitalizedExploration

MSEK -16.8 -15.0 -15.0 -15.0 -15.0

Less Exploration Expense MSEK -102.7 -83.6 -83.6 -87.7 -87.7

Total Operating Cost MSEK 375.4 366.2 369.6 386.0 411.3

Unit Cost SEK SEK/t 278.1 271.2 264.0 275.7 293.8

Exchange Rate SEK/US$ 0.125 0.125 0.133 0.133 0.133

Unit Cost US$ US$/t 34.8 33.9 35.2 36.8 39.2

The operating cost forecast for 2018 for the mine is 278.1 SEK/t (tonne of ore mined), which is US$

34.8/t at an exchange rate of US$0.125 per 1SEK. The annual cost per tonne of ore in SEK is forecast

to decrease through to 2020 as a result of increasing ore tonnage as well as a higher portion of costs

directed at development, which is capitalized. The increase in the cost per tonne in US dollars in 2020

is due to the higher SEK/US$ exchange rate forecast, while from 2021 unit costs start increasing

because of less tonnage and respective lower development cost allocation.

21.2 Mineral Process Plant Operating Costs

ZMAB do not separate the operating cost between the copper and zinc-lead mineral process plant

circuits, but instead report an overall operating cost for the entire mineral processing plant. The

process operating cost forecast for 2018 to 2022 is presented in Table 21.2.

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Table 21.2: ZMAB Process Operating Cost – Plan/Forecast 2018 to 2022


2019Forecast

2020Forecast

2021Forecast

2022Forecast

Labour MSEK 59.5 60.1 60.7 61.3 62.0

Contractors MSEK 40.0 40.2 40.4 40.6 40.8

Energy MSEK 19.3 20.0 20.8 20.8 20.8

Rods/Balls MSEK 2.3 2.4 2.5 2.5 2.5

Reagents MSEK 11.0 11.4 11.8 11.8 11.8

Maintenance MSEK 26.0 26.0 26.0 26.0 26.0

Other MSEK 21.4 21.4 21.4 21.4 21.4




Unit Cost US$ US$/t 16.6 16.8 17.5 17.6 17.6

The operating cost forecast for 2018 for the process plant is 132.9 SEK/t (tonne of ore milled), which

converts to US$ 16.6/t. The cost per tonne is expected to slightly increase in 2019 driven by a rise in

energy costs, and from 2020 the cost per tonne stabilizes as the mill throughput reaches 1.40mtpa.

21.3 Total Operating Costs

The total operating cost forecast for 2018 to 2022 is shown in Table 21.3.

Table 21.3: ZMAB Total Operating Cost – Forecast 2018 to 2022


2019Forecast

2020Forecast

2021Forecast

2022Forecast

Mining MSEK 375.4 366.2 369.6 386.0 411.3

Processing MSEK 179.6 181.6 183.7 184.5 185.3

Inventory Movement MSEK 0.4 - - - -

G&A MSEK 129.3 129.2 129.9 130.6 131.3




Unit Cost US$ US$/t 63.4 62.7 65.1 66.8 69.3

The overall operating cost forecast for 2018 is 506.8 SEK/t (tonne of ore milled), which gradually

decreases to 488.0 SEK/t in 2020 as a result of increasing tonnage when mill throughput is forecast to

reach 1.40mtpa. From 2021 the total cost per tonne is forecast to increase mainly as a result of higher

mining costs.

The total cost per tonne in US$ is forecast to range between a minimum of US$62.7/t in 2019 and a

maximum of US$69.3/t in 2022.

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21.4 Mining Capital Costs

The estimated mining sustaining capital expenditures between 2018 and 2022 are summarised in

Table 21.4.

Table 21.4: Summary of Mine Sustaining Capital Plan from 2018 to 2022

ItemUnit Capital Cost

2018 2019 2020 2021 2022 Total

MineEquipment/Services

KSEK 99,225 98,420 75,115 64,505 67,125 404,390

CapitalizedDevelopment

KSEK 122,742 154,846 159,463 143,342 118,796 699,189

CapitalizedExploration

KSEK 16,800 15,000 15,000 15,000 15,000 76,800

Total KSEK 238,767 268,266 249,578 222,847 200,921 1,180,379


Total US$m 29.8 33.5 33.3 29.7 26.8 153.2

Sustaining capital in the mine includes on-going horizontal and vertical development necessary to

achieve the mine schedule, infill diamond drilling, together with mobile and other equipment

replacement programmes. A total of 1,180,379 KSEK (US$ 153.2 million) is forecast to be spent over

the next 5 years. This is an increase from the previous 5 years, reflecting both increased renewal of

mine equipment and the expansion of mine operations in the western areas of the underground

operations.

21.5 Mineral Process Plant Capital Costs

A summary of the estimated mineral process plant sustaining capital expenditures budgeted between

2018 and 2022 is shown in Table 21.5.

Table 21.5: Summary of Mineral Processing Plant Sustaining Capital Plan from 2018 to 2022


2018 2019 2020 2021 2022 Total

Total KSEK 54,600 62,060 49,105 56,955 32,355 255,075

ExchangeRate

SEK/US$ 0.125 0.125 0.133 0.133 0.133

Total US$m 6.8 7.8 6.5 7.6 4.3 33.0

As part of maintaining an efficient and effective operating plant, ZMAB have allocated a sustaining

capital forecast of 255,075KSEK (US$ 33.0 million) between 2018 and 2022. The estimate is to an

accuracy of +/- 25% and is based on ZMAB in-house experience. The sustaining capital forecast

includes a provision for an upgrade to the back fill paste plant and distribution lines, ongoing raises of

the Enemossen TSF, upgrades to the concentrate handing facilities and continued noise reduction

programmes.

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The budgeted new mineral process capital expenditure between 2013 and 2016, as set out in the

previous Technical Report, that included the installation of a second-hand FAG grinding mill, has been

successfully installed. The construction of a new TSF, Enemossen East, has also been completed.

21.6 Total Capital Costs

Total forecast sustaining capital expenditures between 2018 and 2022 are summarized in Table 21.6.

Table 21.6: Summary of Sustaining Capital Plan from 2018 to 2022


2018 2019 2020 2021 2022 Total

Mine KSEK 238,767 268,266 249,578 222,847 200,921 1,180,379

Plant KSEK 54,600 62,060 49,105 56,955 32,355 255,075

Administrative KSEK 29,471 8,465 12,765 8,965 5,415 65,081

Total KSEK 322,838 338,791 311,448 288,767 238,691 1,500,535


Total US$m 40.4 42.3 41.5 38.5 31.8 194.6

Total forecast capital expenditures between 2018 and 2022 amount to 1,500,535 KSEK, which

converts to US$194.6 million.

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22 ECONOMIC ANALYSIS

Companies which are active and current producers of saleable product issuing a NI 43-101 Technical

Report may exclude the information required under Section 22 for Technical Reports on properties

unless the Technical Report includes a material expansion of current production.

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23 ADJACENT PROPERTIES

There is no information regarding adjacent properties applicable to the Zinkgruvan Property for

disclosure in this report.

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24 OTHER RELEVANT DATA AND INFORMATION

There are no other relevant data or information to report.

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25 INTERPRETATION AND CONCLUSIONS

An updated Mineral Resources and Mineral Reserves estimate has been prepared for the Zinkgruvan

polymetallic base metal mine. All Mineral Resources and Mineral Reserves estimates were produced

by ZMAB and reviewed by WAI.

Mineral Resource estimation involved the use of drill hole and geological mapping data to construct

three dimensional wireframes that define mineralised domains. Grades were estimated into a

geological block model representing each mineralised domain. Grade estimation was carried out

predominantly by ordinary kriging and inverse distance weighting. Estimated grades were validated

globally, locally, and visually prior to tabulation of the Mineral Resources. Reconciliation indicates that

the resource models generally perform well when compared to plant production data.

As of June 30, 2017 and at an average cut-off grade of 3.68% Zn equivalent the total Measured and

Indicated Mineral Resources for the zinc-lead zones within the Zinkgruvan licence areas are 15,668Kt,

with an average grade of 9.3% Zn, 3.7% Pb and 84g/t Ag. Total Inferred Mineral Resources are 9,431Kt

with an average grade of 8.5% Zn, 3.5% Pb and 81g/t Ag.

As of June 30, 2017 and at a cut-off grade of 1.0% Cu the total Measured and Indicated Mineral

Resources for the copper stockwork zone within the Zinkgruvan licence areas are 4,976Kt, with an

average grade of 2.3% Cu, 0.3% Zn and 32g/t Ag. Total Inferred Mineral Resources are 193Kt with an

average grade of 2.3% Cu, 0.3% Zn and 25g/t Ag.

Mineral Reserve estimation methodology includes determining the value of each individual stope or

stope block by utilising an NSR calculation. The NSR is calculated on a metal recovered and metal

payable basis taking into account zinc, lead, copper grades and silver content, metallurgical recoveries

based on actual mineral process plant performance, metal commodity prices and realisation costs

related to shipment of concentrates to the appropriate smelter and associated commercial smelter

terms and conditions. The mining cut-off value is based on an analysis of the variable operating cost

of the mining, mineral processing, general and administration, and stope development cost multiplied

by a ratio of the future waste/ore production; and sustaining capital based on the five-year budget.

As of June 30, 2017 and at an average cut-off grade of 3.68% Zn equivalent the total Proven and

Probable Mineral Reserves for the zinc-lead zones within the Zinkgruvan licence areas are 11,901Kt

with an average grade of 7.2% Zn, 2.9% Pb and 63g/t Ag.

As of June 30, 2017 and at a cut-off grade of 1.5% Cu the total Proven and Probable Mineral Reserves

for the copper stockwork zone within the Zinkgruvan licence areas are 5,252Kt with an average grade

of 1.8% Cu, 0.2% Zn and 26g/t Ag.

Underground mining operations commenced at Zinkgruvan mine in 1857. The orebody is known to

extend to 1,600m below surface and is open at depth. Mine access is currently via three shafts, with

the principal P2 shaft providing ore and waste rock hoisting and labour access to the -800m and -850m

levels. The “daylight”ramp connects the surface and the underground workings throughthe “western

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areas”, providing direct vehicle access to the mine. A system of internal ramps is employed to access

and hence exploit Mineral Reserves below the shaft. The mine is highly mechanised, uses the best

available technologies to control operations and uses longhole panel and sub level bench stoping

throughout the mine. All stopes are backfilled with either cemented paste tailings or waste rock.

Mining has reached the -1,250m level.

The zinc-lead and copper ore processing plants are operated efficiently to produce readily saleable

concentrates with good levels of recovery of the metals to their respective concentrates. There is little

variation in run-of-mine ore over time and recoveries and concentrate grades are generally stable and

predictable.

In 2016, 1,119,276t of ore were processed at Zinkgruvan, of which 1,093,249t were zinc-lead ore and

106,027t were copper ore. The average ore grades for 2016 were 7.98% zinc, 3.3% lead, 68g/t silver

and 2.0% copper. In 2016, a total of 148,938t of zinc concentrate, 44,139t of lead concentrate and

7,366t of copper concentrate were produced.

The zinc ore throughput has increased since 1977, reaching a maximum of 1.096 Mtpa in 2015. In 2017

the plant had processed 0.807Mt by September (1.076 Mtpa equivalent).

Significant improvements have been made to the crushing plant in recent years by simplifying the

circuit and de-coupling the plant from the mine hoist system. A significant proportion of the zinc-lead

ore is now fed directly to the AG mill without the need for pre-screening and pebble crushing.

All concentrates, zinc, lead and copper, are predominantly sold under long term contracts directly to

mainly European smelters. However, some 10 to 15% of the zinc concentrate production is sold to

trading companies on a spot basis by tenders. The quality of all concentrates is high with few penalty

elements and there are no issues selling the products.

ZMAB has established plans for the continuous monitoring and management of water, waste, air

quality, biodiversity, health and safety and stakeholder engagement. These plans are updated to

reflect changes to business needs and Lundin corporate-level standards for environmental and social

management, which are commensurate with international best practice standards.

The operations infrastructure, including access roads and energy sources, meets best practice

requirements and general housekeeping, safety and security standards at the mine are compliant with

international best practice. ZMAB maintain positive relations with local communities through informal

and formal stakeholder engagement activities, including through community initiatives and

continuous interaction via social media.

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26 RECOMMENDATIONS

26.1 Geology and Mineral Resources

Update the drill hole database with all available information, including year of drilling,

core diameter and density. The structure of the geological logging database should be

reviewed to prevent overlapping samples;

Given the large difference in density between the zinc-lead mineralisation and the

surrounding waste rock it is recommended that the current practice of incorporating

a minimum mining width within the mineralised zone wireframes be reviewed;

The method of density estimation of the zinc-lead mineralised zones should be

reviewed. The potential for estimating density from drill hole density measurements

or calculating density from regression of grades estimated into the block model (lead,

iron or sulphur), should be assessed;

The Mineral Resource classification methodology should also consider the confidence

in the drill hole data quality, with respect to the proportion of historical or recent

drilling, and their spatial distribution within the mineralised zone; and

The planned implementation of Vulcan and Leapfrog be completed in time to be fully

tested before next year’s Mineral Resource estimation and reporting.

26.2 Mining and Mineral Reserves

As recommended in Section 26.1 the practice of incorporating a minimum mining

width within the mineralised zone wireframes should be reviewed. Defining the

Mineral Resource model using geological contacts only would allow for planned

dilution to be separately defined; and

Diagrams that reflect the interaction of the Mineral Resource model, lithological

boundaries, rock strata control and planned and unplanned dilution to be drafted to

assist in the communication of conversion of Mineral Resources to Mineral Reserves.

26.3 Mineral Processing

More pro-active testing of new ore sources and at an earlier stage of exploration;

Development of an on-site metallurgical laboratory; and

Flotation modelling of existing circuit to evaluate flotation expansion requirements.

26.4 Environmental Studies, Permitting and Social or Community Impact

Continue the current project to understand the hydrogeological regime in the area

underlying and around the Industrial Area and the TSF. Determine the extent to which

contaminant impact is occurring and the consequences of this impact on receptors of

concern down the hydraulic gradient;

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Continue to look at the feasibility and options for the improvement of surface run-off

water collection for all areas of the site;

Improve material storage practices (e.g. oils) above ground and in underground areas;

Review chemicals present on site to ensure that all of them are captured in the

chemicals management system, including those regulated by REACH legislation;

Continue programmes that have been initiated to assess and resolve the legacy issues

at Åmmeberg;

Consider completion of a legal review of port sediment data for internal risk

management purposes;

Develop a Permit and Obligations Management Plan to include the overview of the

permitting workflow; legal risk assessment and review procedure; responsible people;

the process for alerts to changes in permits, tracking and management of permit

obligations, communications plans, management of change plans;

Conduct a formal risk assessment of the TSF access road and implement barriers to

vehicle access, where appropriate;

The mining licence has recently been extended for the extraction and processing of

1.5Mtpa. The extension was granted on a provisional basis and contingent on the

completion of studies related to dust, hydrology, noise and vibrations. Of these, only

hydrology works are pending, with an anticipated completion date of Q4 2018;

ZMAB has developed site-specific plans for the continuous monitoring and

management of water, waste, air quality, biodiversity, H&S and stakeholder

engagement. These plans are comprehensive and comply with best practice, and

ZMAB remains committed to continuously updating their content to reflect changes

in project design, including when the new Enemossen TSF’s come into operation, as

well as per Lundin’s extensive corporate-level guidance on environmental and social

aspects; and

ZMAB continues to embed its environmental and social management systems within

the company’s digital intranet facilities, including by making the incident and risk

register more readily available to employees. Stakeholder engagement by ZMAB is

also increasingly digital and the company is developing social media channels to faster

and more easily understand community concerns and grievances. WA recommends

that ZMAB continues to explore ways of improving two-way communication channels

with local communities whilst maintaining more conventional methods of registering

grievances, such as by telephone.

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27 REFERENCES

Air Quality Management Plan for Zinkgruvan, 2015, Zinkgruvan Mining AB;

Allen, R.L., Lundström, I., Ripa, M., Simeonov, A., Christofferson, H., 1996. Facies

analysis of a 1.9 Ga, continental margin, back-arc, felsic caldera province with

diverse Zn–Pb–Ag–(Cu–Au) sulfide and Fe oxide deposits, Bergslagen Region,

Sweden. Econ. Geol. 91, 979–1008;

Biodiversity Management Plan for Zinkgruvan (“Plan för biologisk mångfald”,

Swedish), 2015 - Second Revision, Lundin Mining Corporation;

Community Survey (“Invånarundersökning”, Swedish), 2017, carried out by

Marknadskraft AB and commissioned by Zinkgruvan Mining AB;

Complementary Environmental Impact Assessment (“Kompletterande

miljökonsekvensbeskrivning gällande justerat förslag till nytt sandmagasin vid

Zinkgruvan”), December 2013, carried out by Svensk MKB on behalf of Zinkgruvan

Mining AB;

Crisis Management Plan for Zinkgruvan (“Krisplanen 3.2”, Swedish), May 2017,

Lundin Mining Corporation;

Energy Efficiency Plan, Appendix 2: Transportation (“Energieffektiviseringsplan”,

Swedish), 2011-2016, Zinkgruvan Mining AB;

Environmental, Health & Safety and Product Stewardship Audit 2016, April 2017,

carried out by ERM and commissioned by Lundin;

Environmental Impact Analysis – App. C (“Miljökonsekvensbeskrivning gällande

fortsatt verksamhet och nytt sandmagasin vid Zinkgruvan”), 2012, carried out by

Svensk MKB on behalf of Zinkgruvan Mining AB;

Environmental Noise Baseline and Impact Assessment (“Externbullerkartläggning”,

Swedish), 2017, carried out by ÅF-Infrastructure AB and commissioned by

Zinkgruvan Mining AB;

Environmental Competence Plan (“Personalens Kompetens & Miljöutbildning”),

2017, carried out by YMK and commissioned by Zinkgruvan Mining AB;

Environmental Report v1.0, Zinkgruvan Mining AB;

Five-Year Social Performance Strategy, 2017 (draft), Zinkgruvan Mining AB;

Gibson, HL., Allen, RL., Riverin, G., and Lane, TE., 2007. The VMS Model: Advances

and Application to Exploration Targeting. Proceedings of Exploration 07: Fifth

Decennial International Conference on Mineral Exploration, pp 713-730;

Group Procedures for Biodiversity Management (2015), Mine Closure Planning

(2015), Water Management (2014), Air Quality/GHG Management (2014), Lundin

Mining Corporation;

Independent Third-Party Geotechnical Tailings Review Programme, January 2017,

carried out by BGC Engineering Inc. and commissioned by Lundin Mining

Corporation;

Jansson, NF., Zetterqvist, A., Allen, R.L., Billström, K., and Malmström, L., 2017.

Genesis of the Zinkgruvan stratiform Zn-Pb-Ag deposit and associated dolomite-

hosted Cu ore, Bergslagen, Sweden. Ore Geology Reviews 82 (2017), pp 285-308;

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LMC Health and Safety Report for the period ending 30 September 2017, Lundin

Mining Corporation;

LOM2018 5 years.xlsx - MS XLS worksheet defining the mining operational activity

for the period 2018 to 2022;

LOM2018, Enhanced Production Scheduler Software (“EPS”) schedule - Detailed

historical and future mine plans in 3D format; EPS part of Studio 5, Datamine;

Lundin Mining, 2017 Mineral Resource and Mineral Reserve Estimates;

Mine Closure and Rehabilitation Plan (“Efterbehandlingsplan”), 2015, carried out by

Nils Eriksson for Zinkgruvan Mining AB;

NI 43-101 Zinkgruvan Final (V3.0) Report (WAI), January 2013;

Partial Ruling on Mining License Application, Case M 2927-12/M 1421-11 (“Tillstånd

till fortsatt gruvverksamhet mm i Zinkgruvan samt tillstånd att anlägga och nyttja

nytt magasin för anrikningsand”), 30/01/2015, produced by Alrutz’Advokatbyrå AB

for Zinkgruvan Mining AB (updates regarding environmental conditions 17/02/2017

and 29/09/2017);

Responsible Mining Management System Standard, March 2017, Lundin Mining

Corporation;

Safety Statistics, September 2017, Zinkgruvan Mining AB;

Sustainability Report, 2016, Lundin Mining Corporation;

Traffic Noise Baseline and Impact Assessment (“Trafikbullerutredning”, Swedish),

2017, carried out by ÅF-Infrastructure AB and commissioned by Zinkgruvan Mining

AB;

Waste Management Plan (“Avfallsplan”) for 2018-2020, published 2017, Zinkgruvan

Mining AB;

Water Management Plan for Zinkgruvan, 2015, Zinkgruvan Mining AB;

Zinkgruvan_LOM_model_20171114_WAI - MS XLS worksheet defining the

enterprise revenue, expenses and resultant cash flow;

Zinkgruvan Mine, Ground Control Management Plan, 2008;

Zinkgruvan TSF: Enemossen East Design Memo, 25 September 2017, Knight Piésold

Limited;

Zinkgruvan TSF: Enemossen North Conceptual Design Memo, 25 September 2017,

Knight Piésold Limited; and

Zinkgruvan Safety Action Plan, 2017, Zinkgruvan Mining AB.

DATE AND SIGNATURES

The effective date of this Technical Report, entitled “NI 43-101 Technical Report for the Zinkgruvan

Mine, Sweden” is 30 November 2017.

Richard Ellis

Date: 30 November 2017

Phillip King


Timothy Daffern


"Richard Ellis"

"Philip King"

"Timothy Daffern"

CERTIFICATE OF AUTHOR

I, Richard John Ellis, BSc, MSc, MCSM, FGS, CGeol, EurGeol, do hereby certify that:

• I am a Principle Resource Geologist of: Wardell Armstrong International Ltd Wheal Jane,

Baldhu, Truro, TR3 6EH, United Kingdom;

• I graduated with a Bachelor of Science Degree in Geology from the University of Bristol (UK) in

2001 and a Master of Science Degree in Mining Geology from the Camborne School of Mines

(UK) in 2003;

• I am a Fellow and Chartered Geologist of the Geological Society of London (Membership No.

1013201) and member of the European Federation of Geologists;

• I have practiced my profession continuously for the last 13 years in a variety of countries and

geological environments and have prepared Mineral Resource estimates for volcanogenic

massive sulphide deposits and sedimentary exhalative deposits for more than 5 years;

• I have read the definition of “qualified person” set out in National Instrument 43-101 (“NI 43-

101”) and certify that I am a “qualified person” for the purposes of NI 43-101;

• I last visited the property from October 10 to October 11, 2017;

• I am responsible for the preparation of sections 1. Summary; 2. Introduction; 3. Reliance on

Other Experts; 4. Property Description and Location; 5. Accessibility, Climate, Local Resources,

Infrastructure and Physiography; 6. History; 7. Geological Setting and Mineralisation; 8.

Deposit Type; 9. Exploration; 10. Drilling; 11. Sample Preparation, Analyses and Security; 12.

Data Verification; 14. Mineral Resource Estimates; 23. Adjacent Properties; 24. Other Relevant

Data and Information; 25. Interpretation and Conclusions; 26. Recommendations; 27.

References;

• I am independent of the issuer, Lundin Mining Corporation as defined by NI 43-101;

• I have read the Instrument NI 43-101 and the Technical Report has been prepared in

compliance with NI 43-101 and;

• As of the date of this certificate and to the best of my knowledge, information and belief, the

Technical Report contains all scientific and technical information that is required to be

disclosed to make the Technical Report not misleading.

Dated this 30th day of November, 2017

Name: R J Ellis BSc, MSc, MCSM, FGS, CGeol, EurGeol

(signed) "Richard Ellis"


I, Phillip King, BSc, ARSM, CEng, FIMMM do hereby certify that:

• I am a Technical Director of: Wardell Armstrong International Ltd Wheal Jane, Baldhu, Truro,

TR3 6EH, United Kingdom;

• I graduated with a Bachelor of Science Degree in Mineral Technology from Imperial College,

London (UK) in 1980,

• I am a Fellow of the Institution of Mining, Metallurgy and Materials (IMMM) and a Chartered

Engineer (CEng),

• I have practiced my profession continuously for the last 37 years in a variety of countries and

in a range of commodities and have been involved with the minerals processing of massive

sulphide deposits for more than 30 years;

• I have read the definition of “qualified person” set out in National Instrument 43-101 (“NI 43-

101”) and certify that I am a “qualified person” for the purposes of NI 43-101;


• I am responsible for the preparation of sections 1. Summary; 13. Mineral Processing and

Metallurgical Testing; 17 Recovery Methods; 18. Project Infrastructure; 19. Market Studies

and Contracts; 24. Other Relevant Data and Information; 25. Interpretations and Conclusions;

26. Recommendations; 27. References;




• As of the date of this certificate and to the best of my knowledge, information and belief, the

Technical Report contains all scientific and technical information that is required to be



Name: P. A. King BSc, ARSM, C.Eng. FIMM (signed) "Philip King"


I, Timothy Daffern, BEng, MBA, CEng, FIMMM, FAusIMM, MCIM, MSME, do hereby certify that:

• I am a Consulting Mining Engineer of: Wardell Armstrong International Ltd Baldhu House,

Wheal Jane Earth Science Park, Baldhu, Truro, Cornwall, United Kingdom TR3 6EH;

• I graduated with a Bachelor Degree in Mining Engineering from The University of New South

Wales, Sydney, Australia in 1990 and with a Master Degree in Business Administration from

The Open University Business School (UK) in 2000;

• I am a Fellow and Chartered Engineer of the Institution of Materials, Minerals & Mining

(Membership No. 48479);

• I have practiced my profession continuously for the past 30 years in areas of gold and base

metals evaluation in a number of countries around the world, and have prepared Mineral

Reserve estimates for more than 5 years;

• I have read the definition of “qualified person” set out in National Instrument 43-101 (“NI

43-101”) and certify that I am a “qualified person” for the purposes of NI 43-101;


• I am responsible for the preparation of sections 1. Summary; 15. Mineral Reserve Estimates;

16. Mining Methods; 18. Project Infrastructure; 19. Market Studies and Contracts; 20.

Environmental Studies, Permitting and Social or Community Impact; 21. Capital and

Operating Costs; 22. Economic Analysis; 24. Other Relevant Data and Information; 25.

Interpretation and Conclusions; 26. Recommendations; 27. References;




• As of the date of this certificate and to the best of my knowledge, information and belief,

the Technical Report contains all scientific and technical information that is required to be



Name: T Daffern, BEng, MBA, CEng, FIMMM, FAusIMM, MCIM, MSME

(signed) "Timothy Daffern"

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