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LUNDIN MINING

NI 43-101 Technical Report for the Zinkgruvan Mine, Central Sweden

January 2013

LUNDIN MININGNI 43-101 Technical Report for Zinkgruvan Mine,Central Sweden

ZT61-0996/MM775January 2013

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CONTENTS

1 SUMMARY ................................................................................................................................ 1

2 INTRODUCTION......................................................................................................................... 7

2.1 Purpose of Technical Report ................................................................................................. 7

2.2 Independent Consultants...................................................................................................... 7

2.3 Sources of Information ......................................................................................................... 8

2.4 Personal Inspections............................................................................................................. 9

2.5 Units and Currency ............................................................................................................. 10

3 RELIANCE ON OTHER EXPERTS ................................................................................................ 11

4 PROPERTY DESCRIPTION AND LOCATION................................................................................ 12

4.1 Location ............................................................................................................................. 12

4.2 Licences and Tenure ........................................................................................................... 13

5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY ......... 22

5.1 Accessibility........................................................................................................................ 22

5.2 Climate............................................................................................................................... 22

5.3 Local Resources and Infrastructure ..................................................................................... 22

5.4 Physiography...................................................................................................................... 23

6 HISTORY.................................................................................................................................. 24

6.1 Project History.................................................................................................................... 24

7 GEOLOGICAL SETTING AND MINERALISATION ........................................................................ 27

7.1 Regional Geology................................................................................................................ 27

7.2 Mine Geology ..................................................................................................................... 28

7.3 Mineralisation .................................................................................................................... 39

7.4 Underground Mapping ....................................................................................................... 41

8 DEPOSIT TYPE.......................................................................................................................... 43

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

9.1 Introduction ....................................................................................................................... 44

9.2 Latest Exploration Targets .................................................................................................. 44

9.3 Exploration Budget 2012 .................................................................................................... 45

9.4 Exploration Budget 2013 .................................................................................................... 47

10 DRILLING ............................................................................................................................ 49

10.1 Introduction..................................................................................................................... 49

10.2 Core Logging and Sampling .............................................................................................. 49

10.3 Core Storage .................................................................................................................... 51

10.4 Drilling Results ................................................................................................................. 51

11 SAMPLE PREPARATION, ASSAYING AND SECURITY............................................................ 56

11.1 Sample Preparation.......................................................................................................... 56



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11.2 Analysis............................................................................................................................ 56

11.3 QA/QC ............................................................................................................................. 58

11.4 Adequacy of Procedures................................................................................................... 65

12 DATA VERIFICATION........................................................................................................... 66

13 MINERAL PROCESSING AND METALLURGICAL TESTING..................................................... 67

13.1 Grindability Testwork ....................................................................................................... 67

13.2 Beneficiation Studies........................................................................................................ 68

14 MINERAL RESOURCE ESTIMATES ....................................................................................... 70

14.1 Introduction..................................................................................................................... 70

14.2 Drillhole Database............................................................................................................ 71

14.3 Mineralised Zone Interpretation ...................................................................................... 72

14.4 Drillhole Data Processing.................................................................................................. 73

14.5 Variography ..................................................................................................................... 73

14.6 Block Modelling ............................................................................................................... 76

14.7 Grade Interpolation.......................................................................................................... 77

14.8 Density............................................................................................................................. 79

14.9 Resource Classification..................................................................................................... 79

14.10 Mineral Resource Evaluation........................................................................................ 81

14.11 Comparison with Previous Mineral Resource Estimates................................................ 83

15 MINERAL RESERVE ESTIMATES .......................................................................................... 85

15.1 Mineral Reserve ............................................................................................................... 85

15.2 Mining Cut-Off Value........................................................................................................ 86

15.3 Mining Factors ................................................................................................................. 89

15.4 Reconciliation .................................................................................................................. 89

15.5 Mine Call Factor ............................................................................................................... 90

16 MINING OPERATIONS ........................................................................................................ 91

16.1 Geotechnical .................................................................................................................... 92

16.2 Hydrological ..................................................................................................................... 94

16.3 Mining Method ................................................................................................................ 94

16.4 Production Schedule ........................................................................................................ 97

16.5 Equipment ..................................................................................................................... 102

17 RECOVERY METHODS....................................................................................................... 104

17.1 Introduction................................................................................................................... 104

17.2 Flowsheet Description.................................................................................................... 105

17.3 Production Data ............................................................................................................. 111

17.4 Plant Consumables......................................................................................................... 115

17.5 Mill Labour..................................................................................................................... 116

17.6 Assay Laboratory............................................................................................................ 117



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18 PROJECT INFRASTRUCTURE.............................................................................................. 118

19 MARKET STUDIES AND CONTRACTS................................................................................. 120

20 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT........... 123

20.1 Environment, Social Setting and Context ........................................................................ 123

20.2 Project Status, Activities, Effects, Releases and Controls................................................. 125

20.3 Mine Waste Rock ........................................................................................................... 128

20.4 Water Management....................................................................................................... 129

20.5 Emissions to Air.............................................................................................................. 129

20.6 Waste Management....................................................................................................... 131

20.7 Hazardous Materials ...................................................................................................... 131

20.8 Security, Housekeeping and Fire Safety .......................................................................... 132

20.9 Permitting...................................................................................................................... 132

20.10 Environmental Management...................................................................................... 133

20.11 Social and Community Management .......................................................................... 138

20.12 Health and Safety ....................................................................................................... 139

20.13 Mine Closure and Rehabilitation................................................................................. 141

21 CAPITAL AND OPERATING COSTS..................................................................................... 143

21.1 Mining Costs .................................................................................................................. 143

21.2 Process Operating Costs................................................................................................. 144

21.3 Process Capital Costs...................................................................................................... 144

21.4 Mining Capital Costs....................................................................................................... 146

22 ECONOMIC ANALYSIS....................................................................................................... 147

23 ADJACENT PROPERTIES .................................................................................................... 148

24 OTHER RELEVANT DATA AND INFORMATION .................................................................. 150

25 INTERPRETATION AND CONCLUSIONS ............................................................................. 151

26 RECOMMENDATIONS....................................................................................................... 153

27 REFERENCES ..................................................................................................................... 154

TABLES

Table 4.1: Dalby Hytta Exploration Licence ...................................................................................... 18

Table 4.2: Lofallet Exploration Licence ............................................................................................. 19

Table 4.3: Flaxen Exploration Licence .............................................................................................. 21

Table 9.1: Exploration Programme for 2012..................................................................................... 45

Table 9.2: Exploration Programme for 2013..................................................................................... 47

Table 10.1: Summary of Drill Intersections fromm Surface Drilling at Dalby ..................................... 52

Table 13.1: Copper Metallurgical Testwork Results.......................................................................... 69

Table 15.1: Zinc and Copper Mineral Reserve (June 2012) ............................................................... 86



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Table 15.2: Mining Factors............................................................................................................... 89

Table 15.3: Reconciliation: Average 2012 Stope Mining Factors (%)................................................. 89

Table 15.4: Tonnage Correction Factor ............................................................................................ 90

Table 15.5: Grade Correction Factor ................................................................................................ 90

Table 16.1: In Situ Stress Measurements ......................................................................................... 92

Table 16.2: Geological Strength Index (GSI) ..................................................................................... 93

Table 16.3: Rock Strengths .............................................................................................................. 94

Table 16.4: Next Ten Years Planned Production from the LOM Plan................................................. 98

Table 16.5: Underground Equipment List....................................................................................... 103

Table 17.1: Plant Consumables (2011) ........................................................................................... 116

Table 17.2: Mill Labour (2011) ....................................................................................................... 116

Table 20.1: Overview Sampling/Measurement .............................................................................. 135

Table 20.2: External Complaints Received at Mine, 2012 ............................................................... 138

Table 21.1: Mining Operating Costs ............................................................................................... 143

Table 21.2: Operating Cost for Processing (2011)........................................................................... 144

Table 21.3: Zinkgruvan Process Opex Plan/Forecast 2012 to 2017 ................................................. 144

Table 21.4: Summary of Planned New Capital Investments............................................................ 145

FIGURES

Figure 4.1: Property Location Map................................................................................................... 13

Figure 4.2: Mining Concessions (Black) and Exploration Licences (Orange) at Zinkgruvan................. 15

Figure 4.3: Marketorp Mining Concession........................................................................................ 16

Figure 4.4: Location of the Dalby Hytta Licence Area ....................................................................... 17

Figure 4.5: Location of the Lofallet Licence Area .............................................................................. 18

Figure 4.6: Location of the Flaxen Licence Area................................................................................ 20

Figure 7.1: Simplified Regional Geology Map ................................................................................... 27

Figure 7.2: Generalised Local Geology Map ..................................................................................... 29

Figure 7.3: Simplified 3-D Section through Zinkgruvan Mine ............................................................ 30

Figure 7.4: Stratigraphic Sequence at Zinkgruvan............................................................................. 32

Figure 7.5: 650m Level Plan of Nygruvan Mine ................................................................................ 34

Figure 7.6: Schematic Cross Section through Nygruvan.................................................................... 35

Figure 7.7: 800 Level Plan - Burkland Zn/Pb and Cu Zones ............................................................... 37

Figure 7.8: Schematic Cross Section through Knalla ......................................................................... 38

Figure 7.9 : Example of Underground Mapping (Burkland Deposit) .................................................. 41

Figure 9.1: Location of Dalby and Isåsen Exploration Targets ........................................................... 44

Figure 9.2: Schematic Long Section of the Mine showing Proposed Exploration Drilling and Drifting

Programme for 2012 ....................................................................................................................... 46



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Figure 9.3: Schematic Long Section of the Mine showing Proposed Exploration Drilling and Drifting

Program for 2013 ............................................................................................................................ 48

Figure 10.1: Location of Surface Drill Hole Pierce Points into Dalby Exploration Target .................... 53

Figure 10.2: Schematic Cross Section showing the Position of Dalby Exploration Drift in Relation to

Known Structures within the Mine .................................................................................................. 54

Figure 10.3: Schematic Cross Section showing the Underground Exploration Drill Hole 3672........... 55

Figure 15.1: Knalla Reserve Classification......................................................................................... 87

Figure 15.2: Nygruvan Reserve Classification ................................................................................... 88

Figure 16.1: Schematic 3D View Shown the Present Mining Areas ................................................... 91

Figure 16.2: Transverse Bench and Fill (Panel Mining)...................................................................... 95

Figure 16.3: Modified Avoca Mining ................................................................................................ 97

Figure 16.4: Cecilia Planned Production 2013-2017 ......................................................................... 98

Figure 16.5: Burkland Planned Production 2013-2017...................................................................... 99

Figure 16.6: Nygruvan Planned Production 2013-2017................................................................... 100

Figure 16.7: Zinkgruvan Knalla Section Ventilation Network .......................................................... 101

Figure 16.8: Zinkgruvan Nygruvan Section Ventilation Network..................................................... 102

Figure 17.1: Simplified Flowsheet for the Crushing Circuit ............................................................. 105

Figure 17.2: Simplified Flowsheet for the Lead-Zinc Circuit ............................................................ 108

Figure 17.3: Simplified Flowsheet for the Copper Circuit................................................................ 110

Figure 17.4: Zinkgruvan Pb-Zn Mill Feed Data (2012: September YTD) ........................................... 111

Figure 17.5: Zinkgruvan Pb-Zn Circuit Recoveries (2012: September YTD) ...................................... 112

Figure 17.6: Zinkgruvan Lead and Zinc Concentrate Grades ........................................................... 113

Figure 17.7: Zinkgruvan Copper Mill Feed Data (2012: September YTD) ......................................... 114

Figure 17.8: Zinkgruvan Copper Recovery and Concentrate Grade................................................. 115

Figure 20.1: Number of Lost Time Accidents (including contractors) 1991 – November 2012......... 140

Figure 23.1: Location of Zinkgruvan within the Swedish Mining Districts........................................ 149

PHOTOS

Photo 10.1: Zinkgruvan Core Logging Facility ................................................................................... 50

Photo 10.2: Core Storage Facility ..................................................................................................... 51

Photo 19.1: Concentrate Warehouse and Weighbridge at Zinkgruvan ........................................... 120

Photo 19.2: Port of Otterbäcken Warehouse ................................................................................. 121

Photo 19.3: Vessel Loading in Otterbäcken.................................................................................... 121

Photo 20.1: Clearing Lake – Klaringssjö – Used to Clarify Water ..................................................... 124

Photo 20.2: Tailings Disposal at Enemossen TMF ........................................................................... 126

Photo 20.3: Pollution Control Sump at Zinkgruvan Mine to Collect Site Drainage Waters............... 128

Photo 20.4: Dust Monitoring Outside Site Boundary...................................................................... 130



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Photo 20.5: Construction of Noise Bund ........................................................................................ 131



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1 SUMMARY

Lundin Mining Corporation (Lundin) is a base metals mining company with operations in

Portugal, Spain, Sweden and Ireland. The Company currently has three mines in operation

producing copper, nickel, lead and zinc (Neves-Corvo in Portugal, Zinkgruvan in Sweden and

Aguablanca in Spain). The Zinkgruvan mine is 100% owned and operated by Lundin through

its Swedish subsidiary Zinkgruvan Mining AB.

This report presents the Mineral Reserves and Resources of the Zinkgruvan mine estimated

by the staff of Zinkgruvan Mining AB (Zinkgruvan) and audited by WAI as of 30 June 2012.

The Zinkgruvan mine is located in south-central Sweden, 175km west-southwest of

Stockholm. The mine site is some 15km from the town of Askersund and comprises a deep

underground mine, a processing plant and associated infrastructure and tailings disposal

facilities. Concentrates are trucked from the mine to a nearby inland port from where they

are shipped via canal and sea to European smelter customers. The Zinkgruvan deposit has

been known since the 16th century. Large scale production first started in 1857 and has

continued uninterrupted since then. At present the annual production of zinc-lead-silver ore

is in the order of 1,000kt. In the order of 38Mt of ore has been mined from Zinkgruvan up to

the end of 2012. The current remaining mine life is in excess of 10 years.

The mining operations are contained within two exploitation concessions; the "Zinkgruvan

Concession", and the neighbouring "Klara Concession” covering the deposit and the

immediate area.

The warm Gulf Stream in the Atlantic gives southern Sweden a relatively mild climate. The

average summer temperature is approximately 18° C. The average winter temperature is

slightly below freezing. The regional infrastructure of paved highways, electricity,

telecommunications and other communications is good. There are several villages and

smaller towns in the surrounding area. The nearest large city is Örebro, 60km to the north,

which hosts a university, considerable industry and an airport with flights to Copenhagen.

The Zinkgruvan deposit is located in the SW corner of the Bergslagen mining district, a part

of the Proterozoic Svecofennian Domain. This district hosts numerous iron ore and base

metal mines in volcano-sedimentary complexes consisting of felsic metavolcanics with



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intercalated limestone, calc-silicate and mineralised deposits. The district is composed of a

series of small elongated basins with felsic metavolcanics overlain by metasediments. The

basins are surrounded by mainly granitoid intrusions of which the oldest are of the same

age as the felsic metavolcanics.

The Zinkgruvan deposit is situated in an east-west striking synclinal structure. The tabular-

shaped Zn-Pb-Ag orebodies occur in a 5- to 25m-thick stratiform zone in the upper part of

the metavolcanic-sedimentary group. In the central part of the deposit disseminated Cu

mineralisation is situated in the immediate hanging wall of the Burkland Zn-Pb-ore body.

The ore deposit is about 5km long and extends to a depth of at least 1,500m below surface.

It strikes mainly east-west and dips towards north. One sub-vertical fault splits the ore

deposit in to two major parts, the Knalla mine to the west and the Nygruvan mine to the

east. In the Nygruvan mine the dip is 60o -80o, whilst in the Knalla mine folding is extensive

and partly isoclinal.

Most of the economic Zn-Pb-Ag mineralisation consists of massive layers of sphalerite and

galena intercalated with barren layers of quarzitic metatuffite and calc-silicate rock. Layers

of disseminated sphalerite and galena occur locally towards the hanging wall. Galena is

locally remobilised into veins, particularly in the Knalla mine.

Zinkgruvan is an underground mine with a long history. Mine access is currently via three

shafts, with the principal P2 shaft providing hoisting and man access to the 800m and 850m

levels with the shaft bottom at 900m (levels are measured in metres below surface). A

recently completed ramp connects the underground workings with surface and now

provides vehicle access direct to the mine. A system of ramps is employed to exploit

resources below the shaft and the deepest mine level is now at 1,130m below surface. The

mine is highly mechanised and uses longhole primary and secondary panel stoping in the

Burkland area of the mine, sublevel benching in the Nygruvan area and in the Cecilia area.

All stopes are backfilled with either cemented paste tailings or waste rock.

The processing plant is located adjacent to the P2 shaft. The existing Zinkgruvan Plant

commenced production in 1977 and uses the conventional processing technologies of

crushing, grinding, flotation and concentrate dewatering to produce separate lead and zinc

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



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June 2010, a Copper Circuit was commissioned to produce copper concentrate using a

separate grinding, flotation and dewatering circuit.

Both the lead-zinc and the copper ores are relatively easy to process and have resulted in

good metallurgical performances. The copper ore responds favourably to beneficiation with

recoveries of 90.7% being obtained since the circuit was commissioned, while lead and zinc

recoveries are typically 86% and 92% respectively. In 2012, Zinkgruvan produced

approximately 3.1kt of copper, 37.2kt of lead and 83.2kt of zinc in concentrate respectively.

The quality of the concentrate is uniformly high and it is readily accepted by all customers.

Both the lead-zinc and copper circuits are fed with ore that has been crushed through a

common surface screening and crushing plant. However, the design of the crushing circuit

has resulted in plant performance being below expectations in terms of availability and

throughput, and it has struggled to meet existing noise and dust standards. In order to

remedy these issues, Zinkgruvan has undertaken a study with the following objectives:

To increase throughput from the surface plant operations to process 1.2Mtpa

for lead-zinc ore and 0.3Mtpa for copper ore;

To improve the plant’s availability by de-coupling the surface operations from

the mine hoist by incorporating suitable capacity stockpiles; and

To improve the plant design to attain continuous compliance with noise and

dust emission regulations.

Following positive results of a Pre-Feasibility Study, Zinkgruvan are contemplating the

installation of a new higher capacity Fully Autogenous Grinding (FAG) mill for the treatment

of the lead-zinc ore, negating the requirement for pre-screening and crushing. It is proposed

that the copper ore will be ground through the existing zinc milling circuit. The new lead-

zinc FAG mill will have a design capacity of 1.5Mtpa to allow for any potential future

expansion programmes.

Preliminary estimates have shown the total capital cost of the project to be US$51M,

however a more refined estimate will be determined by the more detailed Feasibility Study

currently underway. WAI notes that this is a significant capital investment into the plant and

that the requirement is driven not only by a potential financial gain but also by

environmental, operating control and health and safety concerns surrounding the existing



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crushing circuit. The payback period needs to be confirmed once detailed Feasibility Study

capital and operating costs are in hand. Zinkgruvan plan to have the new circuit operational

by Q1 2015. However, achieving this will depend on the time to receive the FAG mill from

order. The FAG mill is currently out to formal tender.

As part of the Trade-off-Study, metallurgical testwork was undertaken at SGS, Canada while

OMC undertook modelling and sizing of the AG mill. After reviewing the SGS test data, OMC

concluded that both the JK Dropweight and SMC test results indicate that the ores are not

overly competent. Based on the SGS laboratory testwork, WAI recommends that further

confirmatory testwork be undertaken as part of the Feasibility Study. It is accepted that

although not the most energy efficient option, oversizing of the FAG mill should allow for

effective treatment to at least current grind sizes and meet all environmental constraints

with the potential for easy of expansion if required.

The metallurgical support team at Zinkgruvan has been strengthened significantly in recent

years. This team have identified process improvements and are working towards the

installation of the new FAG mill and ore handling circuit. WAI recommended that the

metallurgical team undertake beneficiation tests on samples generated from drilling

programmes in order to predict future plant performances.

The estimation of Mineral Resources and Mineral Reserves of Zinkgruvan is based on a

database of over 3,000 diamond drill holes. The majority of the Zn-Pb-Ag Reserves have

been estimated by using block modelling and the Ordinary Kriging Method of grade

interpolation. In areas with randomly and often sparsely distributed drill holes, estimations,

mainly of Resources, have been done by employing the Polygonal Method.

The Zinc Mineral Resources and Reserves are reported above a 3.8% zinc equivalent cut-off.

The Copper Mineral Resources and Reserves are reported above cut-off grades of 1.0%

copper and 1.5% copper respectively.

Mineral Resources and Mineral Reserves as of 30 June 2012 are shown in the tables below.



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Total Mineral Resources for Zinc Zones at Zinkgruvan(30 June 2012)

Tonnage Grade Metal

kt Zn (%) Pb (%) Ag (g/t) Cu (%) Zn (kt) Pb (kt) Ag (Moz) Cu (kt)

Measured 8,682 10.5 5.0 107 0.0 912 434 30 0

Indicated 5,876 9.7 4.9 101 0.0 570 288 19 0

Measured+Indicated

14,558 10.2 5.0 105 0.0 1,482 722 49 0

Inferred 4,553 8.9 3.3 78 0.0 405 150 11 0

Total Mineral Resources for Copper Zones at Zinkgruvan(30 June 2012)

Tonnage Grade Metal


Measured 5,292 0.4 0.0 30 2.3 21 0 5 122

Indicated 587 0.3 0.0 34 2.3 2 0 0.6 14

Measured+Indicated

5,879 0.4 0.0 30 2.3 23 0 5.6 136

Inferred 622 0.4 0.0 31 1.7 3 0 0.6 11

Note: Mineral Resources are inclusive of Mineral Reserves - 100% attributable to Lundin

Total Mineral Reserves for Zinc Zones at Zinkgruvan(30 June 2012)

Tonnage Grade Metal


Proven 8,443 9.2 4.4 95 0.0 777 371 26 0.0

Probable 2,421 8.4 2.7 54 0.0 203 65 4 0.0

Total 10,864 9.00 4.0 86 0.0 980 437 30 0.0

Total Mineral Reserves for Copper Zones at Zinkgruvan(30 June 2012)

Tonnage Grade Metal


Proven 3,931 0.4 0.0 32 2.2 16 0.0 4 86

Probable 77 0.5 0.0 34 2.0 0.0 0.0 0.0 2

Total 4,008 0.4 0.0 32 2.2 16 0.0 4.0 88

Note: The Zinkgruvan Mineral Resource and Reserve estimates are prepared by the mine's

geology and mine engineering department under the guidance of Lars Malmström, Resource

Manager, employed by Zinkgruvan mine. Qualified Persons are Graham Greenway, Group



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Resource Geologist, Lundin Mining and Stephen Gatley Vice President Technical Services,

Lundin Mining. These estimates have been audited by WAI.

The Mineral Resource and Mineral Reserves are reported and prepared in accordance with

the requirements of National Instrument 43-101 and the guidelines published by the Council

of the Canadian Institute of Mining, Metallurgy and Petroleum (¨CIM Standards¨).



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2 INTRODUCTION

2.1 Purpose of Technical Report

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

Corporation (Lundin) to prepare a report in accordance with National Instrument 43-101 (NI

43-101) on the Zinkgruvan deposit located in Central Sweden.

WAI undertook a technical due diligence of the Zinkgruvan underground production mine

and this study considered all aspects of the mine from geology and mineral resources and

mineral reserves in accordance with guidelines of the Canadian Institute of Mining,

Metallurgy and Petroleum (CIM) Mineral Resource and Mineral Reserve definitions,

exploration potential, mining, processing, economics, and environmental and social issues.

Zinkgruvan mineral resource and reserve estimation work was undertaken in accordance

with Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Mineral Resource and

Mineral Reserve definitions that are referred to in National Instrument (NI) 43-101,

Standards of Disclosure for Mineral Projects. This Technical Report has been prepared in

accordance with the requirements of Form 43-101F1.

This report is intended to be used by Lundin as a NI 43-101 Technical Report. This report is

intended to be read as a whole, and sections or parts thereof should therefore not be read

or relied upon out of context.

2.2 Independent Consultants

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

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

Wardell Armstrong Group. 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, Russia. Total worldwide staff complement is now in

excess of 400.



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

Any rights to subscribe for shares in Lundin Mining Corporation either now or

in the future;

Any vested interests in any concessions held by Lundin Mining Corporation;

Any rights to subscribe to any interests in any of the concessions held by

Lundin Mining Corporation, either now or in the future;

Any vested interests in either any concessions held by Lundin Mining

Corporation or any adjacent concessions; or

Any right to subscribe to any interests or concessions adjacent to those held

by Lundin Mining Corporation, either now or in the future.

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.

2.3 Sources of Information

All information contained in this technical report has been supplied by Zinkgruvan Mining

AB. The author has relied upon this information from Zinkgruvan Mining AB staff and

internal reports covering the areas of previous exploration, infrastructure, environmental

and legal matters.

The following personnel from Zinkgruvan Mining AB have provided information to WAI in

order to compile this report:

Bengt Sundelin, General Manager has provided overall corporate information

and future mine development;

Lars Malmström, Resource Manager has provided the information on

Geology and Mineral Resources;

Jan Klare has provided the information on Mining and Ore Reserves;

Johan Albertsson, Mill Manager has provided the information on mineral

processing;



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Frederick Lundstrom, HSEC Manager provided information on environmental

matters; and

Goran Vajukil, Financial Controller, has provided information pertaining to

costs and finance.

The Mineral Reserves and Resource estimates were prepared under the direction of Lars

Malmström, Resource Manager. Qualified persons are Graham Greenway (Lundin Mining

Group Resource Geologist) and Stephen Gatley (Lundin Mining Vice President Technical

Services).

2.4 Personal Inspections

The below-listed qualified persons conducted personal inspections of the Zinkgruvan Mine:

Mark Owen, BSc, MSc, MCSM,CGeol, EurGeol, FGS is a full time employee of Wardell

Armstrong International and Technical Director of Geology and Resources and as a Qualified

Person is responsible for preparing this Technical Report. The author has visited the site to

review recent data pertaining to this report from 13-15th November 2012 inclusive.

Lewis Meyer, ACSM, MCSM, BEng, MSc, PhD, CEng, FIMMM, is a full time employee of

Wardell Armstrong International and Associate Director and Mining Engineer and is

responsible for mine design and scheduling for reserve estimation and as a Qualified Person

is responsible for preparing this Technical Report. The author has visited the site to review

recent data pertaining to this report from 13-15th November 2012 inclusive.

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

Zinkgruvan. The results and opinions expressed in this report are based on the authors’ field

observations and assessment of the technical data supplied by Zinkgruvan Mining AB staff.

The authors have carefully reviewed all of the information provided by Zinkgruvan Mining

AB and believe that the data has been verified to a sufficient level to permit its use in a CIM

compliant Mineral Resource and Mineral Reserve estimate.



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Other WAI consultants visited Zinkgruvan Mine during the period July 13-15th November

2012 to assist with the compilation of this report. During the site visit, the WAI team

inspected current exploration, production and process activities and reviewed

environmental compliance.

These additional WAI consultants consisted of:

Richard Ellis, BSc, MSc, MCSM, FGS; Principal Resource Geologist, Resource

Modelling and Estimation review;

Barrie O’Connell, PhD, B.Eng (MCSM), WAI, Senior Processing Engineer,

Process and Metallurgical Testwork review; and

Chris Broadbent, BSc, PhD, CEng, FIMMM, Director of WAI, Environmental

review.

2.5 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”), base metal values are reported in weight percentage (“%”)

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



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3 RELIANCE ON OTHER EXPERTS

This technical report has been prepared by WAI on behalf of Lundin Mining Corporation.

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

Information made available by Lundin Mining Corporation to WAI at the time

of preparing this Technical Report including previous internal Technical

Reports prepared on Zinkgruvan Mine and associated licences in close

proximity to the project; and

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

Report.

The qualified persons have not carried out any independent exploration work, drilled any

holes or carried out any sampling and assaying at Zinkgruvan Mine.

For the purposes of this report, WAI has relied on ownership information provided by

Lundin Mining Corporation. WAI has not researched property title or mineral rights for

Zinkgruvan and expresses no opinion as to the ownership status of the property. The

description of the property, and ownership thereof, as set out in this technical report, is

provided for general information purposes only.

Except for the purposes legislated under provincial securities laws, any use of this report by

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



Final V3.0 Page 12

4 PROPERTY DESCRIPTION AND LOCATION

4.1 Location

The Zinkgruvan mine is located in south-central Sweden in Närke County at approximately

58°49’N latitude, 15°06’E longitude. As shown in Figure 4.1, the mine lies 175km west-

southwest of Stockholm and 210km northeast of Göteborg. While there is a small village

called Zinkgruvan surrounding the mine installations, 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.



Final V3.0 Page 13

Figure 4.1: Property Location Map

4.2 Licences and Tenure

Lundin Mining Corporation (Lundin) is a base metals mining company with operations in

Portugal, Spain, Sweden and Ireland. The company currently has three mines in operation

producing copper, nickel, lead and zinc (Neves-Corvo in Portugal, Zinkgruvan and

Aguablanca in Spain). The Zinkgruvan mine is 100% owned and operated by Lundin through

its Swedish subsidiary Zinkgruvan Mining AB.



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4.2.1 Exploitation Concessions

Zinkgruvan Mining AB (ZMAB) holds three exploitation concessions totalling an area of

679ha. Two of these exploitation concessions cover the deposit and its immediate area

(Figure 4.2). The “Zinkgruvan Concession”, consisted originally of a large number of small

mining rights, was consolidated in 2000 into one concession covering an area of 254.4ha

and is valid until 01 January 2025. The “Klara Concession” was granted in 2002 and covers

354.7ha, mainly over “new areas” in the western part of the deposit and is valid until 18

December 2027. If mining continues after these years, these concessions can be extended

for periods of 10 years.

The two exploitation concessions are entirely held by ZMAB. 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. The Klara concession

has, however, one restriction stipulating that mining must always be done under a minimum

rock cover of at least 150m thick 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.

A further exploitation concession is held at Marketorp, which lies 40km due east of

Zinkgruvan, covers an area of 70.2ha and is valid until 06 March 2026. No exploitation and

exploration work has been conducted here in the last three years (Figure 4.3).



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Figure 4.2: Mining Concessions (Black) and Exploration Licences (Orange) at Zinkgruvan



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Figure 4.3: Marketorp Mining Concession

(North at top – do not scale)

4.2.2 Exploration Licences

Zinkgruvan Mining AB also holds three exploration licences covering a total area of 3,753ha.

These licences include:



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Dalby Hytta licence covers an area of 780ha and is valid until 01 July 2013. The location of

the licence is shown in Figure 4.4 and the co-ordinates are given in Table 4.1 below.

Zinkgruvan’s intention is to apply for an extension for at least part of this licence on expiry.

Figure 4.4: Location of the Dalby Hytta Licence Area




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Table 4.1: Dalby Hytta Exploration LicenceCo-ord No X Easting Y Northing

1 6525000.00 1455776.00

2 6525140.00 1455782.00

3 6525295.00 1455736.00

4 6526324.00 1455327.00

5 6527000.00 1455000.00

6 6527620.00 1455600.00

7 6527060.00 1456520.00

8 6523152.74 1458480.22

9 6522177.00 1457089.00

10 6523030.00 1456560.00

11 6525000.00 1456137.00

The Lofallet licence covers an area of 992ha and is valid until 13 September 2014. The

location of the licence is shown in Figure 4.5 and the co-ordinates are given in Table 4.2

below. In the absence of new information it is unlikely that Zinkgruvan will apply for an

extension of this licence.

Figure 4.5: Location of the Lofallet Licence Area




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Table 4.2: Lofallet Exploration LicenceCo-ord No. X Easting Y Northing

1 6516000.00 1458870.00

2 6515640.00 1459000.00

3 6515650.00 1460050.00

4 6515155.00 1461680.00

5 6515050.00 1462300.00

6 6514200.00 1462300.00

7 6514150.00 1461600.00

8 6514600.00 1459250.00

9 6513200.00 1459250.00

10 6513000.00 1456350.00

11 6513525.00 1456000.00

12 6513850.00 1456900.00

13 6516000.00 1457400.00

The Flaxen licence covers an area of 1981ha and is valid until 15 September 2014. The

location of the licence is shown in Figure 4.5 and the co-ordinates are given in Table 4.3

below. Zinkgruvan’s intention is to apply for an extension for at least part of this licence

with the precise area dependent on the results of the current exploration drilling at Isåsen.



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Figure 4.6: Location of the Flaxen Licence Area



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Table 4.3: Flaxen Exploration LicenceCo-ord No. X Easting Y Northing

1 6523152.74 1458480.22

2 6523835.24 1458133.58

3 6525000.00 1459550.00

4 6523090.00 1461430.00

5 6523460.00 1462360.00

6 6523180.00 1463600.00

7 6522680.00 1463420.00

8 6520900.00 1464360.00

9 6519050.00 1462765.00

10 6517690.00 1462035.00

11 6517000.00 1462825.00

12 6516450.00 1462825.00

13 6517375.00 1461660.00

14 6518580.00 1461180.00

15 6518990.00 1460575.00

16 6520744.20 1459992.70

17 6520807.60 1460158.70

18 6520700.30 1460385.20

19 6520807.70 1460909.10

20 6520989.50 1460872.30

21 6520974.00 1460836.50

22 6521157.90 1460757.80

23 6521229.50 1460593.70

24 6521349.30 1460599.20

25 6521345.60 1460688.10

26 6522400.00 1460150.00

27 6522860.00 1459555.00

28 6523235.50 1459733.00

29 6523388.86 1459426.54



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5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND

PHYSIOGRAPHY

5.1 Accessibility

The 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.

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 and 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



Final V3.0 Page 23

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.

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 Project 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 merged into Union Miniere in 1990. The earliest recorded mining

activity in the area dates from approximately 1700. This was from the Isåsa mine,

immediately to the north of the present Zinkgruvan operation. The mine operated

intermittently until the mid-1800s, but never made a profit and was shut down permanently

in 1845.

Interest in the present Zinkgruvan area as a potential zinc producer dates from 1846 - 47.

Trial mining and smelting were carried out but the operation was unprofitable because of

the large quantities of coal required for reducing the ore.

The Swedish owner of the property subsequently made contact with Vieille Montagne, the

world leader in the mining and processing of zinc ores at that time. The Belgian company

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.

Processing, including roasting, was carried out at Åmmeberg with its small port facility on

Lake Vättern. Zinkgruvan still has some real estate holdings in and around the village. The

former tailings area now forms a golf course. 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.



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In the years immediately following the opening of the mine, production was carried out on a

modest scale. Hand sorting and heavy media separation were sometimes employed to

upgrade mined material. The rate of production was around 300kt annually ("tpa") until the

end of 1976.

In the mid-1970s, the company decided to expand production to 600ktpa. 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 disposal facility

were built adjacent to the mine and the Åmmeberg facilities were largely rehabilitated and

abandoned. The new facilities were brought 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 late 1995, North Limited of Australia purchased the mine as part of a zinc strategy and in

addition to mining, carried out an aggressive exploration programme in the immediate and

surrounding area. In August 2000, Rio Tinto became the owner of Zinkgruvan when it

acquired North Limited.

Lundin Mining Corporation acquired the mine from Rio Tinto in June 2004 and is now the

owner of Zinkgruvan Mining AB. In December 2004, Silver Wheaton Corp. purchased the life

of mine silver production from the Zinkgruvan mine.

Significant milestones throughout the history of the mine include:

1300 Mining of iron ore starts in the vicinity;

1700 Isåsa silver operations starts;

1857 Vieille Montagne, BEL, acquires ”Zinkgruvan land” for 2.5MBFr;

1863 Railroad to and mill in Åmmeberg constructed;

1927 Introduction of flotation;

1955 Introduction of sink and float in Zinkgruvan;

1977 New mill in Zinkgruvan;

1995 Acquired by North Limited, Australia;

1999 Major reinvestment in the mill completed;

2000 Acquired by Rio Tinto Plc, UK;

2001 Introduction of paste fill;



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2004 Acquired by Lundin Mining Corporation, Canada;;

2009 Record throughput in the mill; 1,028,000t;

2010 Ramp from surface constructed;

2010 Mining and processing of copper ores commenced;

2010 Record ore production in the mine; 1.025.000t; and

2011 Record production in the mill, 1,109,000t.

2012 Record metal in concentrate production, 83.2ktZn, 37.2ktPb, 3.1ktCu



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7 GEOLOGICAL SETTING AND MINERALISATION

7.1 Regional Geology

Zinkgruvan is located in the SW corner of the Proterozoic-aged Bergslagen greenstone

belt/mining district, famed for its numerous iron ore and base metal mines, notably the

Falun deposit (200km north of Zinkgruvan), which saw production from before the year

1000 until 1992. The belt is shown in Figure 7.1 below.

Figure 7.1: Simplified Regional Geology Map

The ore-bearing Bergslagen district is part of the southern volcanic belt of the Svecofennian

Domain. The supracrustal rocks are dominated by felsic metavolcanic successions that can

be up to 10km thick. Limestones, calcsilicates and mineralised deposits are commonly found

within the metavolcanics. 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.



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7.2 Mine Geology

7.2.1 Stratigraphy

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

lower Proterozoic Svecofennian supracrustal sequence (Figure 7.2). This sequence consists

of metavolcanic and metasedimentary rocks 1.90 to 1.88 billion years old, which rest on an

unknown basement. The massive sulphide Zn-Pb-Ag and disseminated Cu mineralisation are

hosted by a metavolcano-sedimentary sequence with associated carbonates and cherts and

extend for some 5km along strike. Structurally, the deposit has undergone several phases of

folding and is divided into two distinct areas by the regional NNE-SSW-trending Knalla

fracture/fault zone. A simplified plan of the mine geology is given in Figure 7.2 and a 3-D

section of the mine shown in Figure 7.3 below.



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Figure 7.2: Generalised Local Geology Map

LUNDIN MININGNI 43-101 Technical Report for Zinkgruvan Mine, Central Sweden


Final V3.0 Page 30

Figure 7.3: Simplified 3-D Section through Zinkgruvan Mine



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The supracrustal rocks are divided into the following three lithostratigraphic groups (as

shown in Figure 7.4):

Metavolcanic group in the lower part of the stratigraphy;

Metavolcano-sedimentary group; and

Metasedimentary group, which occupies the highest stratigraphic position of

the Supracrustal rocks in the Zinkgruvan area.

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 and south of the Zinkgruvan basin structure.

Some of the rocks in the metavolcanic group are assumed to have an ignimbritic origin.

The rocks of the metavolcano-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, usually 2 to 3 m wide.

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. In

the lower part of the group, disseminated pyrrhotite occurs in garnet-bearing siliceous beds

of primary exhalative origin.

Most of the mineralisation in the district is associated with the metavolcano-sedimentary

group. The Zinkgruvan deposit, together with a number of small bodies of Zn-Pb

mineralisation are situated in the higher part of the metavolcano-sedimentary group. Higher

up in the stratigraphy a stratiform pyrrhotite mineralisation occurs in the uppermost part of

the metavolcano-sedimentary group and in the lower part of the metasedimentary group.



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Migmatite, Sillimanite - biotite - quartz - feldspar

Pyrrhotite mineralizationVolcaniclasticsMarble, wollastonite - skarn -vesuvianite - garnetZn - Pb ORE

Volcaniclastics

Marble, forsterite - serpentine - (magnetite) - calcite

Volcaniclastics

Zn - Pb mineralization

Volcaniclastics

Quartz - Microclinerock

(cu)

Metasediments

Mine Package

Quartz - Microcline rock

Figure 7.4: Stratigraphic Sequence at Zinkgruvan

7.2.2 Intrusive and Contact Metamorphic Rocks

During early stages of the orogeny 1.87 to 1.85 billion years ago, differentiated, I-type

granitoids, ranging from gabbro to granite in composition intruded the Svecofennian

sequence. From 1.84 billion years ago until 1.77 billion years ago 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 NNW trending Transscandinavian granite-porphyry belt

created a large volume of granitic intrusion about 1.73 billion years ago.

7.2.3 Structure

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 metavolcano-sedimentary group, which underwent the



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

bedding.

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 NNE-trending fault systems resulting in large-scale block

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

and Burkland ore zones is probably 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 billion years.

7.2.4 Structure, Lithology and Alteration

Stratigraphy is overturned such that the stratigraphic footwall forms the structural hanging

wall. From the stratigraphic footwall (oldest) to the hanging wall (youngest), the deposit

geology is presented schematically as follows:

Felsic metatuffite (sometimes quartzitic and with occasional oxide iron

formation beds);

Marble, hosting the copper mineralisation in the Burkland-Sävsjön area;

Massive sulphide Zn, Pb;

Calc-silicate bedded metatuffite;

Marble;

Felsic metatuffite with disseminated pyrrhotite near the upper stratigraphic

contact; and

Argillic metasediment.

The Nygruvan section of the mine, which has provided the bulk of the production until

recently, is situated to the east of the Knalla fracture/fault zone and consists of a single,

fairly regular, tabular 5m - 25m thick ore horizon, striking NW-SE, dipping 60° to 80° to the

NE and with a near-vertical plunge. It outcrops and persists to at least 1,300m vertical



Final V3.0 Page 34

depth. Figure 7.5 and Figure 7.6 show the 650 level plan and the schematic cross-section

through the Nygruvan area respectively.

Figure 7.5: 650m Level Plan of Nygruvan Mine



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Figure 7.6: Schematic Cross Section through Nygruvan

The western or Knalla section of the mine, striking generally NE-SW (although quite variable

locally) and dipping NW, consists of several bodies of highly contorted Zn-Pb mineralisation

of quite variable thickness (3m – 40m). Dips are variable from near vertical to sub-



Final V3.0 Page 36

horizontal. Plunges are also variable with the Burkland body plunging moderately NE and

Cecilia and Dalby plunging NW. Burkland extends from 200m to depths in excess of 1,500m

vertical. It flattens considerably at depth making exploration drilling and interpretation of

results difficult. Figure 7.7 and Figure 7.8 shows the 800m level Burkland plan and a

schematic cross-section through the Knalla area respectively.



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Figure 7.7: 800 Level Plan - Burkland Zn/Pb and Cu Zones



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Figure 7.8: Schematic Cross Section through Knalla

Sitting in the immediate structural hanging wall of the Sävsjön-Burkland ore body is a

copper (chalcopyrite) stringer zone hosted by dolomitic marbles, in turn overlain by the

oldest unit in the mine area, a metatuffite hyrothermally altered to a quartz-microcline rock.

The copper mineralisation can be followed sporadically from the Sävsjön area in the west to

the Burkland area in the east at depths of between 300 and 400m. At Burkland, it thickens

and follows continuously the plunge of Burkland Zn-Pb-Ag orebody down dip. Core drilling

has indicated the copper mineralisation at a depth of 1,500m. The copper zone dips steeply

NW in its upper part but flattens out at depth. It is cut off laterally to the NE by the Knalla

fault and has been closed off by drilling to the SW.

The plan position of the chalcopyrite copper zone in relation to the zinc zone is shown in

Figure 7.7.



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The metavolcano-sedimentary group consists mainly of a potassium-rich metatuffite with

intercalations of calcsilicate rocks, marbles, quartzites and sulphides. These intercalations

give the metavolcano-sedimentary group a pronounced stratification especially in the ore

zone and its stratigraphic hanging wall.

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 metavolcano-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.

7.3 Mineralisation

7.3.1 Zinc / Lead Orebodies

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

well banded and stratiform layers between 5 to 25m thick. At Nygruvan there are two

parallel horizons (mainly in the eastern portion of the orebody), separated by 3 to 8m of

gneissic metatuffite (quartz, microcline, biotite, and minor muscovite, chlorite and epidotic).

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 Pb-rich western part of Nygruvan

and in the Burkland area. In both the Nygruvan and Knalla areas there is an increase in Zn-

Pb grades towards the stratigraphic hanging wall of the massive sulphide horizon. Contacts



Final V3.0 Page 40

of the mineralisation with the host stratigraphy are generally very sharp, more so on the

stratigraphic hangingwall than footwall.

In the Knalla portion of the mine, the structure is more complex and structural thickening is

common. There are often two to four parallel ore horizons separated by narrow widths of

metatuffite. The Knalla area consists of five individual Zn-Pb bodies for which Mineral

Reserves and/or Mineral Resources have been estimated. Exploration is on-going to further

define and expand them along what is a continuous although highly contorted horizon.

The mineralised bodies are, from NE to SW, Burkland, Savsjon, Mellanby, Cecilia and Borta

Bakom. In addition, the Lindangen zone occurs close to surface above Mellanby on the

longitudinal section and was exploited earlier in the mine’s life. It hosts a small resource,

which is unlikely to be exploited because of its proximity to surface.

The only significant difference in mineralogy from Nygruvan to Knalla is that the Co and Ni

content are higher in the Burkland - Sävsjön deposit and are of a sufficient level that impacts

metallurgy and concentrate quality.

7.3.2 Copper Mineralisation

Copper stockwork mineralisation was noted on the structural hanging wall of the Burkland

deposit early in its exploration history. During 1996-1997 resource definition drilling at

Burkland led to the recognition of significant hanging wall copper mineralisation and a

copper-specific drilling programme was undertaken.

The dip of the copper resource is steep (80°) at higher levels (600-700m). It flattens out to

45° at depths below 1,000m. The plunge is about 60° towards the NNE.

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 mineralisation sometimes merges with the Burkland Zn-Pb ore body.

Here it usually contains significant amounts of sphalerite and some galena.



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The Burkland copper resource is best developed at depths between 700 and 1,100m. It has

a strike length of 100 to 180m while the width varies from 5 up to 60m with an average

around 20m. Up dip the copper resource wedges out and becomes uneconomic above the

600m level. From 1,100m and down to a depth of 1,200m the width of the mineralisation

decreases to 10m. Drilling has not taken place below this depth and no resource has yet

been defined. However, the copper mineralisation has been shown to extend to a depth of

1,500m by core drilling.

7.4 Underground Mapping

All underground development that intersects mineralisation is subject to underground

mapping at a scale of 1:400. Headings are normally washed clean prior to mapping. A

geologist then maps the back of the development headings and produces a hand-drawn

sketch. The mapping carried out relates to both lithology and also likely ore grade. The

sketch is digitised and used to update 3D level plans in the software programme

Microstation. An example of a mapped heading in Microstation® is shown in Figure 7.9

below. The underground mapping data is used to support ore body interpretation. In the

Nygruvan area, where orebody contacts are sharp and can be identified visually, the

underground mapping data is also used to establish orebody thickness for the sectional

resource estimation.

Figure 7.9 : Example of Underground Mapping (Burkland Deposit)



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WAI is particularly impressed with the underground mapping carried out at Zinkgruvan. The

underground mapping is comprehensive and provides an excellent tool to aid geological

interpretation. In addition the mapping aids communication between geology, survey and

mine planning departments.



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8 DEPOSIT TYPE

While the most appropriate genetic model for Zinkgruvan is still somewhat controversial,

evidence, particularly the presence of what appears to be a copper-rich stringer zone

stratigraphically below the Burkland ore body, seems to favour a volcanogenic ("VMS")

model in a distal environment. In this model, mineralised hydrothermal fluids ascended

through a vent system and deposited copper mineralisation just below the paleo-sea floor

and lead-zinc sulphide mineralisation in shallow, fairly flat-lying sea floor depressions during

a particularly quiescent period. However, some researchers prefer a sedimentary-exhalative

("SEDEX") model.



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9 EXPLORATION

9.1 Introduction

With the expansion of the mine capacity in the mid-1970’s, exploration increased and

became more aggressive in the beginning of the 1980’s. At first, focus was on the

continuation of the Nygruvan mine at depth, but after that, and at present, the focus is

towards the western half of the mining area and the Knalla Mine at depth.

Exploration by core drilling dominates, undertaken both from surface and underground.

Most of the exploration drilling takes place underground from dedicated exploration drifts.

9.2 Latest Exploration Targets

The mine is currently exploring two exploration targets which lie close to the mine. These

are Dalby which lies to the NW and Isåsen which lies to the NE (and is postulated to be the

upturned folded limb of the Nygruvan section of the mine). The location of these two targets

relative to the mine is shown in Figure 9.1 below.

Figure 9.1: Location of Dalby and Isåsen Exploration Targets



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9.3 Exploration Budget 2012

A total of 22km of underground drilling was planned for 2012, together with 4km of surface

drilling and 750m of exploration drifting. The programme is summarised in Table 9.1 and

Figure 9.2 below.

Table 9.1: Exploration Programme for 2012Drilling Type Target Metres Comment

Pure Exploration Burkland 2,500 Deep continuity of structure

East Nygruvan 2,500 Deeper extension of structure

West Nygruvan 2,000 Deeper extension of structure

Sub total 7,000

Upgrade Drilling Borta Bakom 2,000 Inferred to Indicated or Better

Mellanby 3,000 Inferred to Indicated or Better

Burkland 2,500 Inferred to Indicated or Better

NygruvanBlock 205

2,000 Inferred to Indicated or Better

Sub total 9,500

Infill Drilling Burkland/Nygruvan 5,500

Sub total 5,500

Surface &UndergroundExploration

Isåsen 4,000 Deep continuity of structure

Sub Total 4,000

Total 26,000

As of the end of December 2012, underground exploration drilling on Nygruvan (6,066m),

Borta Bakom (908m) and Isåsen (1,414m) totalled 8,388m, whilst upgrade drilling on Borta

Bakom (4,117m), Burkland below the 1,300m level (3,676m) and Nygruvan (3,551m) totalled

11,344m, with infill drilling totalling 3,408m.

Surface drilling at Isåsen will be carried out in 2013.



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Figure 9.2: Schematic Long Section of the Mine showing Proposed Exploration Drilling and Drifting Programme for 2012



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9.4 Exploration Budget 2013

A total of 26.5km of underground drilling has been planned for 2013 at a cost of US$2.73M;

together with 1,346m of exploration drifting (of which 200m will be on the Mellanby drill

cross cut drift (650m level) and 1,146m on the drill cross cut drift plus ventilation to Dalby)

at a cost of US$4.88M. An additional budget of US$76k has been included to conduct a

geophysical EM 3-4 survey over the Isåsen target area.

A summary of the exploration programme for 2013 is given in Table 9.2 and shown

schematically in Figure 9.3 below.

Table 9.2: Exploration Programme for 2013Drilling Type Target Metres

(m)Comment

Pure Exploration Borta Bakom 1,000 Deep continuity of structure

Dalby 1,000 Deep continuity of structure

Burkland Copper 600 Deep continuity of structure

Burkland Lower 3,500 Deep continuity of structure

Isåsen 3,000 Locatestructure

West Nygruvan 1,500 Deeper extension of structure

East Nygruvan 1,000 Deeper extension of structure

Sub total 11,600

Upgrade Drilling Borta Bakom 1,500 Inferred to Indicated or Better

Mellanby 3,300 Inferred to Indicated or Better

Savsjon 1,500 Inferred to Indicated or Better

Burkland Copper 600 Inferred to Indicated or Better

Burkland Lower 900

NygruvanBlock 205

3,000 Inferred to Indicated or Better

Sub total 10,800

Infill Drilling Knalla toNygruvan (pluscopper target)

4,100

Sub total 4,100

Total 26,500

WAI has reviewed the proposed budget proposed for 2013 and considers it adequate to

cover those areas of exploration drilling that have been proposed.



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Figure 9.3: Schematic Long Section of the Mine showing Proposed Exploration Drilling and Drifting Program for 2013



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10 DRILLING

10.1 Introduction

Diamond drilling data are the only data used for resource definition, stope definition and

grade control. In the last 10 years between 5,700 and 34,000m of drilling have been

completed on the mine site annually and approximately 20% of that was of a

reconnaissance nature.

Reconnaissance drilling for new mineralisation is normally carried out from exploration

drifts and underground holes may be up to 1,200m in depth. Occasionally surface holes are

drilled.

To qualify as Inferred Resources drill spacing is generally 100m vertically by 100m

horizontally with no mineralisation exposed by development. Indicated Resource drill

spacing is in general 50 by 50m with some mineralisation exposed by development.

Measured Resources have drill spacing of 30 to 50m and are often well exposed by

development. Stope definition holes generally have a maximum spacing of 15 to 20m.

Diamond drilling is done by contractors. Holes over 100m in length are surveyed using a

Maxibor instrument with readings taken every 3m. Core size is generally 28 - 36mm for

underground holes and 28 – 39mm for surface holes. Recovery is considered excellent,

averaging near 100%.

Drill core is delivered to a modern, well lit core shed on the mine site. It arrives in labelled

wooden core trays. The geologist calculates Q values (a geotechnical measurement

combining several measures) and proceeds to geologically log the core using Prorok a

software (developed and employed in Sweden) data entry module and predefined

lithological codes. There is also a provision for a written description. One geologist is

assigned to enter all drill logs into the database.

10.2 Core Logging and Sampling

All core produced is subject to geological and geotechnical logging. Core logging is

undertaken in a well-lit logging facility as shown in Photo 10.1 below. Logging data is



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entered directly into a digital database using Prorok® software (developed and employed in

Sweden). The software enables all basic geological characteristics such as rock type,

mineralisation style, colour, texture, and structure to be entered into the database using a

set of pre-defined codes. The geotechnical Q value is also assessed and entered in to the

database.

The geologist marks the "from - to" for assay samples on the box and this "from - to" serves

as the sample number, which he or she enters on a sample record sheet. The geologist

defines sample intervals which are governed by lithology, sulphide content and a maximum

sample length of 2.0m (minimum of 0.10m). The request for analysis follows the sample

from the core shed until the sample has undergone all stages of sample preparation.

Photo 10.1: Zinkgruvan Core Logging Facility

A technician splits the core using a hydraulic splitter and then places the split portion in a

bag marked with the sample number supplied by the geologist. A diamond saw is used

occasionally. The drill core samples are transported in manually labelled paper bags to the

sample preparation facility.

Since 2007, photographs have been taken of all drill cores. In-fill drilling cores are disposed

of after logging and sampling.



Final V3.0 Page 51

The core logging and sampling procedures employed at Zinkgruvan are considered by WAI to

be generally excellent.

10.3 Core Storage

The exploration drill core storage boxes are all stored in a warehouse on site adjacent to the

core logging facility. The store is maintained to a very high standard and well secured, as

shown in Photo 10.2.

Photo 10.2: Core Storage Facility

10.4 Drilling Results

10.4.1 Dalby

The Dalby Exploration target lies to the NW of the current mine workings and was

historically drilled from surface during 2006 to 2008. A summary of results from these drill

hole intersections, which appear promising is given in Table 10.1 and a plan showing the

location of the pierce points from these holes into the structure shown in Figure 10.1 below.



Final V3.0 Page 52

Table 10.1: Summary of Drill Intersections fromm Surface Drilling at Dalby

HoleNo.From(m)

To(m)

Length(m)

Zn(%)

Pb(%)

Ag(g/t)

Cu(%)

1270 Barren

1271 Barren

1272 720.11 727.53 7.42 10.50 0.55 19 0.03

2156 Trace

2449 797.30 807.43 10.13 14.35 4.77 111 0.01

2549 1,138.17 1,152.21 14.04 10.84 5.76 121 0.14

2588 Trace

2647 1,067.47 1,073.77 6.30 9.91 0.18 56 1.07

1,136.00 1,142.76 6.76 9.91 8.28 117 0.01

2843 916.00 922.00 6.00 1.47 1.61 73 0.01

2844 1,029.75 1,035.75 6.00 11.46 0.09 4 0.00

2845 1,092.75 1,099.69 6.94 18.60 0.23 29 0.04

2846 1,167.22 1,173.68 6.46 7.33 4.22 89 0.01

2847 894.37 914.55 20.18 8.50 1.08 54 0.34

2884 836.33 920.84 84.51 9.99 8.33 143 0.09

2885 805.38 813.90 8.52 7.25 5.12 98 0.01

2886 Barren

2912 Barren

2913 925.49 958.88 33.39 6.77 0.64 28 0.07

1,032.47 1,035.83 3.36 4.76 3.56 41 0.00

2914 766.57 774.20 7.63 25.70 2.40 43 0.03

928.99 951.39 22.40 5.71 4.03 131 0.05

1,012.93 1,020.02 7.09 4.53 4.86 62 0.01

2916 Trace

2917 992.27 997.13 4.86 6.88 0.01 3 0.01

1,143.53 1,144.64 1.11 8.63 1.23 61 0.08

2918 816.28 834.50 18.22 9.63 2.74 60 0.01

3015 Barren

3094 Trace

3095 526.69 529.26 2.57 6.03 0.17 5 0.01



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Figure 10.1: Location of Surface Drill Hole Pierce Points into Dalby Exploration Target

(Limits of the Extrapolated Dalby Zone (shown in Red – north at top of view)



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From underground, an exploration cross cut drift has been established on 1,130m level from

Burkland to Dalby. A total of 1,146m of drifting is planned for 2013. Once the drift is

completed, uphole fan drilling into the Dalby structure will be conducted from the end of

this drive in 2015. A schematic cross section to show the underground position of the Dalby

structure in relation to known structures within the mine is illustrated in Figure 10.2 below.

Figure 10.2: Schematic Cross Section showing the Position of Dalby Exploration Drift in

Relation to Known Structures within the Mine

10.4.2 Isåsen

An exploration drift has been put out through the hangingwall of the Nygruvan structure on

1,100m level in order to provide a drill position to target a structure thought to lie NNE

beneath Isåsen. The structure here is postulated to represent the upturned limb of a

synclinal structure that contains Nygruvan (Figure 10.3).

The first hole is currently at a depth of 850m, but progress is slow due to poor in-hole

ground conditions and high saline water make. Further drilling both from surface and



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underground will continue throughout 2013. A second hole from a similar position on the

965m level has recently been started.

Figure 10.3: Schematic Cross Section showing the Underground Exploration Drill Hole 3672

from Nygruvan Exploration Drive to Isåsen

(and Surface Drill Hole into same Target Zone)

10.4.3 Mellanby

A short (150m) exploration drift is being driven on the 650m level towards in order to be in

a position to drill down into Mellanby. This drift is planned to be completed in May 2013,

when drilling will commence.



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11 SAMPLE PREPARATION, ASSAYING AND SECURITY

11.1 Sample Preparation

Sample preparation is carried out on site within a section of the process analytical

laboratory.

The core is first dried and then crushed to <5mm using a jaw crusher. Following crushing,

the sample is mechanically split to 100-150g using Jones’ Riffles. Before 2002 a Tema mill

was employed for grinding; since then, however, an automated Herzog pulveriser has been

employed which can run 60 samples at a time with samples being reduced to <36 microns.

Cleaning of the pulveriser is automatically carried out after each sample run using

compressed air and water.

The prepared samples are bagged up and packed into cardboard boxes for shipping to ACME

Analytical Laboratories in Vancouver. Duplicates, dolerite blanks and samples for external

checks are also bagged and packed with the sample batch.

11.2 Analysis

11.2.1 Pre 2002

Prior to 2002, all samples were assayed at Zinkgruvan’s own on-site laboratory by Atomic

Absorption Spectroscopy (AAS). Samples were analysed 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 on-site laboratory AAS detection limits are shown in Table 11.1.



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Table 11.1: Zinkgruvan On-Site LaboratoryAAS Detection Limits For Geological SamplesElement 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.

11.2.2 Post 2002

Since 2002 all samples have been assayed by ACME Analytical Laboratories in Vancouver

where approximately 12g of pulp sample (40g since 2008) are shipped. ACME Analytical

Laboratories has an ISO/IEC 17025:2005 accreditation. The laboratory run assays using ICP-

ES; 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 11.2. Ag assays reporting over 700ppm are submitted for fire assay analysis using a

30g charge.

Table 11.2: ACME ICP-ES Method DetectionLimits

Element Detection Limit

Ag 1g/t

Co 0.0005%

Cu 0.0005%

Fe 0.01%

Ni 0.001%

Pb 0.005%

Zn 0.005%



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11.3 QA/QC

A systematic QA/QC programme was implemented in 2001 and was fully up and running in

2002. Duplicates and blanks are inserted 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.

11.3.1 Duplicates

Pulp duplicate samples are inserted into the sample stream at a frequency varying from

between every 21st and every 25th sample. The duplicate results are rigorously compared to

the original to monitor analytical precision as well as any potential bias in the process

caused by improper cutting of sample, homogeneity, washing during cutting or loss of fines

during preparation. The results of the 2011/2012 duplicate assaying are shown in Figure

11.1, Figure 11.2, Figure 11.3 and Figure 11.4 and indicate an acceptable level of precision.

Figure 11.1: Log Scatter Plot of Duplicate Comparison for Zinc



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Figure 11.2: Log Scatter Plot of Duplicate Comparison for Lead

Figure 11.3: Log Scatter Plot of Duplicate Comparison for Silver



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Figure 11.4: Log Scatter Plot of Duplicate Comparison for Copper

11.3.2 Blanks

Diabase blanks are inserted at a frequency of between every 21st and 23rd sample to

monitor contamination in the sample preparation and analysis. The 2011/2012 results for

zinc and lead and silver and copper are shown in Figure 11.5, Figure 11.6 and Figure 11.7.

The results indicate that contamination is not a specific problem.

Figure 11.5: Blank Results – Zinc and Lead



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Figure 11.6: Blank Results - Silver

Figure 11.7: Blank Results - Copper

11.3.3 Standards

GeoStats certified standard samples are inserted between every 19th and 21st sample. A

summary of the standards used in 2011/2012 are shown in Table 11.3. Example results of

the assaying of the standard samples are shown in Figure 11.8, Figure 11.9 and Figure 11.10.

The results indicate that a reasonable level of accuracy has been attained in the analysis.



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Table 11.3: Standards with Accept ValuesZinc Lead Silver Copper

StandardName

Zn (%)Standard

NamePb (%)

StandardName

Ag (%)Standard

NameCu (%)

310-16 17.15 310-16 11.32 310-16 315.8 302-9 1.27

908-12 2.52 908-12 1.09 908-12 22.0 310-16 0.36

908-14 4.27 908-14 3.30 908-14 303.7 908-12 0.26

909-13 6.84 909-13 0.85 909-13 127.3 908-14 2.37

909-13 3.21

Figure 11.8: Standard 909-13 for Zinc

Figure 11.9: Standard 908-14 for Lead



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Figure 11.10: Standard 310-16 for Silver

11.3.4 External Checks

External check samples are selected for every 23rd and 27th sample and pulp duplicate

samples are submitted for analysis at ALS Chemex, Vancouver. Results of the 2011/2012

external check assaying are shown in Figure 11.10, Figure 11.11, Figure 11.12 and Figure

11.13. Overall a good correlation between the ACME and ALS laboratories is shown in the

check assaying.

Figure 11.10: External Duplicates for Zinc



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Figure 11.11: External Duplicates for Lead

Figure 11.12: External Duplicates for Silver



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Figure 11.13: External Duplicates for Copper

11.4 Adequacy of Procedures

A rigorous QAQC programme was implemented in 2002 and these procedures have been

maintained since this date. WAI believes that the sampling, sample preparation, assaying

and security measures in use at Zinkgruvan conform to standard industry practice, or better.

In addition, the field procedures used by Zinkgruvan Mining AB are in line with industry best

practice and the accepted sample results provide a representative estimate of the

Zinkgruvan mineralisation.



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12 DATA VERIFICATION

WAI has visited Zinkgruvan on several occasions, to review the geology, exploration work

and Mineral Resource estimation processes. The following aspects were inspected during

these visits:

The geological and geographical setting of the Zinkgruvan deposit;

The extent of the exploration work completed to date;

Inspection of the core logging, sampling and storage facilities;

Inspection of the core and a review of the logging procedures;

Review of the sampling and sample preparation procedures;

Discussions with the geological staff regarding geological interpretation;

Visits to the on-site assay laboratory and discussions on procedures and

quality issues;

Review of the reconciliation of planned versus broken versus milled versus

the resource model; and

Visits to underground exposures of the mineralisation in working stopes.

Limited QA/QC data exists for the historical assaying carried out at the Zinkgruvan on-site

laboratory prior to 2002. WAI has reviewed the location of the holes drilled prior to 2002

(up to Drillhole 1760 in the drillhole database) in relation to the current mineral resource. It

is considered by WAI that the majority of these historical drillholes are located in areas since

depleted by mining and that their influence on the current mineral resource estimate is

minimal.

WAI was able verify the quality of geological and sampling information. The underlying data

supporting the resource estimate is considered by the author to be generated and input into

the corresponding resource models in a satisfactory manner. Given the operating history of

Zinkgruvan and the on-going reconciliation studies, WAI considers that the sampling and

assay information to be reliable and has therefore not carried out any check sampling or

assays. WAI believes that reliance can therefore be placed on the information contained

within the Zinkgruvan database in this respect.



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13 MINERAL PROCESSING AND METALLURGICAL TESTING

13.1 Grindability Testwork

Orway Minerals Consultants (OMC) undertook AG/SAG modelling work to ascertain if the

ore could be treated using FAG, negating the requirement for pre-screening and crushing.

To acquire necessary inputs into their model, comminution testwork was undertaken by SGS

Lakefield. Testwork was undertaken on samples of zinc and copper mineralisation. For each

sample, one main composite and two variability samples (representing high and low grade)

were tested. The SGS tests undertaken on the main composite samples showed that:

The samples tested were soft to moderately soft in terms of their resistance

to impact breakage (SMC tests);

Bond Crusher Work Index (CWI) tests categorised the samples from the

moderately hard to hard range of hardness; and

Bond Ball Work Index (BWI) tests showed the samples to be between soft to

medium range in terms of hardness.

It was consequently decided that zinc ore will be treated through a new higher capacity AG

mill. Simulation studies were undertaken by OMC, who recommended that a 7.32m

diameter by 6.7m long mill fitted with a 4.5MW motor would achieve a target grind size of

90µm. A further plant trial was undertaken in September 2012, using copper ore treated

through the existing AG mill to establish the ability of the existing zinc mill to treat the minor

tonnage of copper ore. The results indicated that the mill adequately handled the ore at a

rate of 50tph without loss in metallurgical performance.

The detailed Feasibility Study will provide more accurate costing. As part of the Feasibility

Study, WAI recommends that confirmatory testwork is undertaken to ensure that the ores

are amenable to FAG technology.



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13.2 Beneficiation Studies

13.2.1 Copper

13.2.1.1 Optimet, 1997

Initial testwork was undertaken by Optimet in 1997. The test sample contained 3.35% Cu,

0.26% Zn, 10g/t Ag, 3.5% S, 0.04% Ni, 0.032% Co and 200g/t As. Initial mineralogical

observations indicated that fine grinding is likely to be necessary in order to liberate

chalcopyrite from gangue minerals.

Flotation tests were undertaken with a simple reagent suite containing a frother and

xanthate collector at natural pH (8.5-8.7). Flotation residence times of 12-20 minutes were

used during roughing while 10 and 8 minutes were used during cleaner stages 1 and 2

respectively.

In the initial flotation tests, it was shown that at a copper concentrate containing 23.9% Cu

at a recovery of 92% could be obtained at a grind of 80% passing 75µm. Finer grinding

(40µm) increased the copper concentrate grade to 28.8% Cu at a recovery of 91.3%. The

content of zinc in the concentrate (2.4% Zn) remained below penalty limits (3% Zn).

13.2.1.2 MinPro, 1999

Later testwork was undertaken in 1999 by MinPro, a Swedish mineral laboratory contractor.

MinPro tested a mineralised copper sample containing 3.9% Cu, 0.79% Zn, 55g/t Ag, 0.071%

Ni, 0.055% Co and 4.5% S.

In initial tests, MinPro used conditions derived from Optimet’s testwork programme. A

copper concentrate grade of 27.9% Cu at a recovery of 93.2% was obtained. However, it was

shown that the copper concentrate assayed some 5% Zn. Consequently, in subsequent tests,

SO2 was used to depress zinc. With the use of SO2, a copper concentrate containing 0.76%

Zn could be obtained (the copper content of this copper concentrate was 29.3% Cu at a

recovery of 92.3%). It was concluded that the copper concentrates will not contain any

penalty elements provided zinc is sufficiently depressed.



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Mineralogical investigations by SGAB Analytica verified that chalcopyrite and sphalerite

were well liberated in the particle size range +20 microns. It was shown that some

chalcopyrite seems to occur as small inclusions in gangue minerals (in the tailing product).

Gangue minerals are predominately calcite-dolomite, muscovite, quartz, biotite and

amphibole. Arsenic is shown to be bound to tetrathedrite-tennantite.

13.2.1.3 MinPro, 2007-2008

During 2007-2008, MinPro undertook a pilot plant trial on a 100t copper mineralised sample

(hoisted from mine development on the 800m level). The pilot plant test shows that a

copper concentrate can be produced grading 25% Cu with a recovery of >92%. The results

are shown in Table 13.1 below.

Table 13.1: Copper Metallurgical Testwork Results

Products Weight (%) Cu Grade (%) Ag Grade(g/t)

Cu Recovery(%)

Ag Recovery(%)

Cu conc. 8.8 25.4 150 92.8 78.4

Tailings 91.2 0.19 4 7.2 21.6

Feed 100.0 2.4 17 100.0 100.0

The copper concentrate from this pilot plant test had high grades of arsenic, at 0.9%.

However, the bench scale tests shows that the arsenic content in the concentrate can be

depressed to <0.4% if the pH in the flotation circuit is high or a special copper collector is

used.

13.2.2 Lead-Zinc

No recent metallurgical studies have been undertaken as there are no significant new

orebodies in the 10 year mine plan.



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14 MINERAL RESOURCE ESTIMATES

14.1 Introduction

The Zinkgruvan mineral resource estimates have been produced by Zinkgruvan and Lundin

Mining and were audited by WAI. The majority of the Zinkgruvan orebodies have been

modelled using 3d block modelling. The polygonal method is also used but is mainly limited

to minor orebodies and orebodies at early stages of resource evaluation. A summary of the

resource estimation method used by mining area for Nygruvan and Knalla areas of

Zinkgruvan Mine are shown in Table 14.1 and Table 14.2, respectively.

Table 14.1: Nygruvan Area Resource Estimation Methods by Mining AreaLocation Mining Area Resource Estimation Method

300 96-97 Polygonal

650 10 Block Model

1140 C Block Model

305 E 950 Polygonal

1130 240-260 Block Model

Nygruvan Rec. Pillar Block Model

410 10 Block Model

455 G Block Model

1000 D Block Model

819-1070 205 Block Model

1170 C Block Model

1100 F Block Model

1320 240-260 Block Model

1290 A Block Model

B 1340 Block Model

205 1280 Block Model

K 1170 Block Model



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Table 14.2: Knalla Area Resource Estimation Methods by Mining AreaLocation Mining Area Resource Estimation Method

Burkland

450 Block Model

650 Block Model

960 Block Model

1125 Block Model

1300 Block Model

1365-1500 Block Model


Rec. Pillar Block Model

Burkland Hängmalm 1025-1145 Block Model

Cecilia341-680 Block Model

240-341 Block Model

Borta Bakom570-650 Block Model

525-750 Block Model

150 I Polygonal

350 J Block Model

250 U Polygonal

I 150 Polygonal

Sävsjön450 Polygonal

560 Polygonal

Mellanby570-680 Polygonal

770-830 Polygonal

Copper Zone



1260 Block Model

Rec. Pillar Block Model

14.2 Drillhole Database

Drillhole co-ordinates, assays, and down-hole surveys are stored in an Oracle® database.

Assay values are uploaded into the database from Excel worksheets that have been sent

from ACME Analytical Laboratories. Prior to uploading of the assay data a rigorous statistical

assay check is carried out on the data. 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. The geological database at Zinkgruvan is well

structured and is well maintained.

WAI is impressed by the rigorous statistical analysis of laboratory assay results by the

geologist prior to upload preventing erroneous values being included in the database.



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14.3 Mineralised Zone Interpretation

Mineralised zone interpretation is carried out for the zinc and copper zones separately. For

areas where 3d block modelling is carried out wireframes depicting the mineralisation for

each orebody are constructed in Microstation® software based on drillhole data and

underground mapping data.

A cut-off grade of 3.8% Zn equivalent (based on the average NSR value for the mine and

calculated from the equation: NSR=Zn(%)*86+Pb(%)*92+Ag(g/t)*0.4) is used to define the

mineralisation in the zinc zones. Because the footwall and hangingwall contacts within the

zinc zones are geologically well defined WAI consider this cut-off grade to be generally

reflective of a geological cut-off.

A cut-off grade of 1.0% Cu is used to define the copper zone mineralisation. Separate

wireframes are constructed for the footwall and the hangingwall. The wireframes are also

constrained by major mined out areas. Mineralised zone wireframes for Zinkgruvan are

shown in Figure 14.1 and Figure 14.2. Additional wireframes and strings of the mined out

stopes and underground development are also constructed separately for depletion

purposes.

Figure 14.1: Isometric View of Zinkgruvan Mineralised Zone Wireframes



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Figure 14.2: Isometric View of Knalla Area and Showing Copper Zone Mineralisation

14.4 Drillhole Data Processing

Drillhole samples located within the mineralisation wireframes are selected for further data

processing. A 2m composite interval was applied to these samples to standardise the

sample lengths for both the zinc and copper ore zones. No top-cutting of the dataset was

carried out. WAI have reviewed the selected sample database and identified minor outlier

values to be present; however given the nature and style of the mineralisation encountered

at Zinkgruvan, the influence of these values is considered to be insignificant.

14.5 Variography

Variography has been carried out for Zn, Pb, Ag, Cu, Ni, Fe and Co independently for each

orebody. The spherical scheme model was used to derive variogram parameters from the

experimental semi-variograms. The principal direction of continuity was selected from the

generated experimental semi-variograms and modelled with two structure spherical

models. The variography used the 2.0m composite data and nugget variances were

modelled from the downhole variograms. Examples of the modelled semi-variograms for Zn,

Pb and Ag in the Burkland zinc zone are shown in Figure 14.3, Figure 14.4 and Figure 14.5.

Overall the semi-variograms generated were considered to be well structured and



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interpretable with the exception of Cecelia, Borta Bakom, J and 205 orebodies. Modelled

semi-variograms were therefore not generated for these orebodies.

Figure 14.3: Semi Variograms for Zn – Burkland Zinc Zone



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Figure 14.4: Semi Variograms for Pb – Burkland Zinc Zone



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Figure 14.5: Semi Variograms for Ag – Burkland Zinc Zone

14.6 Block Modelling

The geology department at Zinkgruvan uses the Prorok® block modelling system as their

primary geological modelling software. The system is designed as a block modelling module

to run on Microstation® CAD 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 (I,J,K) indices 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. A parent cell size of 10m x 5m x 10m (x,y,z) was used



Final V3.0 Page 77

for the block models located within the Knalla area. A parent cell size of 5m x 10m x 5m

(x,y,z) was used for the block models in the Nygruvan area. A minimum of two sub-cell splits

to the parent cell were allowed where additional cell resolution was required. Block models

are stored in the Oracle® database which links directly into Microstation®.

14.7 Grade Interpolation

14.7.1 Block Model Grade Interpolation

Grade interpolation was carried out using Prorok® software. Ordinary Kriging was used as

the principle grade interpolation method for all block model orebodies with the exception of

Cecilia, Borta Bakom, J and 205 where inverse distance weighting squared (IDW) was used

as the principle interpolation method due to the poorly structured variography in these

areas. 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 are stored in a separate table and linked to the volumetric model table via

a special key field. A summary of the grade estimation parameters used at Zinkgruvan are

shown in Table 14.3. Industry best practice would typically involve a 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 the

composite sample requirement WAI considers that the number of blocks (particularly within

the Measured and Indicated resource categories) that could have been estimated from only

one drillhole to be insignificant. WAI considers that the grade interpolation carried out at

Zinkgruvan to be generally robust.



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Table 14.3: Summary of Zinkgruvan Search Parameters

Ore Body ElementSearch Radius

Along Strike (m) Down Dip (m) Across Strike (m)

Burkland

Zn 80 38 20.5

Pb 108.5 40.5 5.5

Cu 90 39.5 27

Ag 124.5 40.5 36

Co 63 32 10.5

Fe 70 39.5 10

Ni 99 38 17

Nygruvan

Zn 103 80 4.5

Pb 101 91.5 10

Cu 101 78 8

Ag 136 78 6

Co 120.5 85.5 7

Fe 110.5 67 6

Ni 68.5 58.5 11

Cecilia

Zn 90 60.3 8.01

Pb 90 60.3 8.01

Cu 90 60.3 8.01

Ag 90 60.3 8.01

Co 90 60.3 8.01

Fe 90 60.3 8.01

Ni 90 60.3 8.01

Borta-Bakom

Zn 100 100 40

Pb 100 100 40

Cu 100 100 40

Ag 100 100 40

Co 100 100 40

Fe 100 100 40

Ni 100 100 40

Copper Zone

Cu 60 30 14

Zn 95 51 36

Pb 100 30 30

Fe 90 48 13

Ag 84 44 35

As 102 57 50

Sb 80 50 42

Bi 70 42 27

Hg 95 80 53NB –1. Burkland, Nygruven (with the exception of Nygruvan 205 area) and copper zone areas estimated using Ordinary Kriging. All

other areas estimated by Inverse Distance Weighting.2. Maximum of 10 composites and minimum of 2 composite used for all estimations.



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14.7.2 Polygonal Estimation

Polygonal estimation is carried out in MS Excel spreadsheets along with Microstation® CAD

software for the measurement of polygon areas. Drillhole intersection centres, which have

been composited on their entire thickness, are plotted on a vertical longitudinal projection.

Density is used as a weighting factor in the intersection average grade calculation. The

horizontal thickness is calculated using the angle between the intersection angle and the

local orebody orientation. Irregular polygons are drawn around each drillhole intersection

on the vertical projection. The polygon areas are calculated using Microstation® CAD

software. The volume and tonnage of each polygon is then calculated. The tonnage of the

orebody is calculated as a sum of the tonnage of each polygon, whereas grade is estimated

as a weighted average.

14.8 Density

Density for the Zn-Pb resources is estimated by the following formula:

5.7

15.1%

0.4

49.1%

7.2

15.1%49.1%100100

PbZnPbZnSG

The formula estimates sphalerite and galena content as a function of grade. A density of

2.7t/m3 is assumed for the host rock with the theoretical densities of sphalerite and galena

used for the density calculation. The reliability of this formula is tested by water

displacement tests and reconciliation between the estimated tonnage and the actual mined

tonnage. Apart from sphalerite and galena, the Zinkgruvan Zn-Pb mineralisation contains

very few sulphide minerals and, therefore, the density formula should provide accurate SG

estimations. A constant density of 2.86t/m3 is used for the copper zone mineralisation.

Reliability of the density estimations has been tested and proven by reconciliation of

estimated tonnage against the actual processed tonnage.

14.9 Resource Classification

Mineral resources are classified on the basis of the drill hole spacing, presence of

underground development and soundness of structural interpretation. In general, a 100m ×

100m drill hole spacing is required to classify resources in the Inferred category. An area



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drilled at 50m × 50m, with some mineralisation exposed by underground development, will

be classified as Indicated; the Measured category requires 30m-50m drill hole spacing and

good exposure of the mineralisation in development. The current reserve and resource

areas of the Knalla areas of Zinkgruvan are illustrated in Figure 14.6 and the current reserve

and resource areas of the Nygruvan areas of Zinkgruvan are illustrated in Figure 14.7.

Figure 14.6: Knalla Reserve and Resource Classifications by Area (Zinkgruvan, 2012)



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Figure 14.7: Nygruvan Current Reserve and Resource Classifications by Area

(Zinkgruvan, 2012)

14.10 Mineral Resource Evaluation

A summary of the Mineral Resource Statement for zinc and copper at Zinkgruvan as of 30

June 2012 are given in Table 14.4 and Table 14.5, respectively.

A cut-off grade of 3.8% Zn equivalent (based on the average NSR value for the mine and

calculated from the equation: NSR=Zn(%)*86+Pb(%)*92+Ag(g/t)*0.4) is used to define the

mineralisation in the zinc zones. Because the footwall and hangingwall contacts within the

zinc zones are geologically well defined WAI consider this cut-off grade to be generally

reflective of a geological cut-off.

A cut-off grade of 1.0% Cu is used to define the copper zone mineralisation.

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,



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infrastructure, or other factors that materially affect this mineral resource estimate, at this

time.

Table 14.4: Total Mineral Resources for Zinc at Zinkgruvan(30 June 2012)

Tonnage Grade Metal


Measured 8,682 10.5 5.0 107 0.0 912 434 30 0

Indicated 5,876 9.7 4.9 101 0.0 570 288 19 0

Measured+Indicated

14,558 10.2 5.0 105 0.0 1,482 722 49 0

Inferred 4,553 8.9 3.3 78 0.0 405 150 11 0

Table 14.5: Total Mineral Resources for Copper at Zinkgruvan(30 June 2012)

Tonnage Grade Metal


Measured 5,292 0.4 0.0 30 2.3 21 0 5 122

Indicated 587 0.3 0.0 34 2.3 2 0 0.6 14

Measured+Indicated

5,879 0.4 0.0 30 2.3 23 0 5.6 136

Inferred 622 0.4 0.0 31 1.7 3 0 0.6 11

Note: The Zinkgruvan Mineral Resource and Reserve estimates are prepared by the mine's

geology and mine engineering department under the guidance of Lars Malmström, Resource

Manager, employed by Zinkgruvan mine. Qualified Persons are Graham Greenway and

Stephen Gatley. These estimates have been audited by WAI in November 2012.

Mineral Resources are inclusive of Mineral Reserves - 100% attributable to Lundin

The Mineral Resource and Mineral Reserves are reported and prepared in accordance with

the requirements of National Instrument 43-101 and the guidelines published by the Council

of the Canadian Institute of Mining, Metallurgy and Petroleum (¨CIM Standards¨).



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14.11 Comparison with Previous Mineral Resource Estimates

A comparison of the 2011 (as of 30 June 2011) and 2012 (as of 30 June 2012) mineral

resource estimates for Zinkgruvan zinc and copper zones are shown in Table 14.6. Overall

the combined Measured and Indicated mineral resources increased by 600kt in the zinc

zones and 403kt in the copper zone.



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Table 14.6: Comparison of 2011 vs 2012 Zinc and Copper Mineral ResourcesZinc Mineral Resources

30 June 2011 30 June 2012 Difference

Tonnage(kt)

Grade Tonnage(kt)

Grade Tonnage(kt)

Grade

Zn(%)

Pb(%)

Ag(g/t)

Cu(%)

Zn(%)

Pb(%)

Ag(g/t)

Cu(%)

Zn(%)

Pb(%)

Ag(g/t)

Cu(%)

Measured 8,464 11.0 5.5 119 0.0 8,682 10.5 5.0 107 0.0 +218 -0.5 -0.5 -12 -

Indicated 5,494 10.4 4.6 93 0.0 5,876 9.7 4.9 101 0.0 +382 -0.7 +0.3 +8 -

Measured +Indicated

13,958 10.8 5.1 109 0.0 14,558 10.2 5.0 105 0.0 +600 -0.6 -0.1 -4 -

Inferred 5,572 9.6 3.2 69 0.0 4,553 8.9 3.3 78 0.0 -1,019 -0.7 +0.1 +11 -

Copper Mineral Resources

30 June 2011 30 June 2012 Difference

Tonnage(kt)

Grade Tonnage(kt)

Grade Tonnage(kt)

Grade

Zn(%)

Pb(%)

Ag(g/t)

Cu(%)

Zn(%)

Pb(%)

Ag(g/t)

Cu(%)

Zn(%)

Pb(%)

Ag(g/t)

Cu(%)

Measured 5,304 0.5 0.0 29 2.2 5,292 0.4 0.0 30 2.3 -12 -0.1 - +1 +0.1

Indicated 172 0.3 0.0 35 2.5 587 0.3 0.0 34 2.3 +415 0.0 - -1 -0.2

Measured +Indicated

5,476 0.5 0.0 29 2.2 5,879 0.4 0.0 30 2.3 +403 -0.1 - +1 +0.1

Inferred 772 0.2 0.0 36 2.2 622 0.4 0.0 31 1.7 -150 +0.2 - -5 -0.5

LUNDIN MININGNI 43-101 Technical Report for ZinkgruvanMine, Central Sweden


Final V3.0 Page 85

15 MINERAL RESERVE ESTIMATES

15.1 Mineral Reserve

The primary tools used for Mineral Reserve Estimation at Zinkgruvan are Microstation and

Prorok ®. Mineral Reserve Estimation at Zinkgruvan is integrated with resource modelling

and classification.

Stoping and development plans are constructed using the CAD programme, Microstation®.

The footwall and hangingwall wireframes produced in Prorok® 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.

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. Development drives located 30m from the orebody footwall are driven into a stoping

area well in advance of production. Infill drilling from the footwall is used to define the

footwall and hangingwall stope boundaries based on a mining cut-off value.

Mined-out areas are routinely surveyed using a Cavity Monitor System (CMS) prior to

backfilling. The CMS produces a wireframe of the stope void which can then be 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. The mined-out portion of the orebody is then subtracted from the resource.

The majority of the Mineral Reserves and Resources at Zinkgruvan are hosted by the

Burkland deposit, with a smaller portion remaining in the Nygruvan deposit. Smaller

tonnages are hosted by the Savsjon, Mellanby, Cecilia, and Borta Bakom deposits, all of

which lie to the south west of Burkland (collectively known as Västra fältet). None of these

deposits are fully closed off.

The Zinkgruvan June 2012 Mineral Reserve Estimation is shown in Table 15.1, and the

location of the Proven and Probable Reserves are presented on the long section of Knalla

and Nygruvan in Figure 15.1 and Figure 15.2.



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Table 15.1: Zinc and Copper Mineral Reserve (June 2012)

Zinc Mineral Reserve

30-Jun-12

Tonnage (kt)Grade

Zn (%) Pb (%) Ag (g/t) Cu (%)

Proven 8,443 9.2 4.4 95 -

Probable 2,421 8.4 2.7 54 -

Proven + Probable 10,864 9.0 4.0 86 -

Copper Mineral Reserve

30-Jun-12

Tonnage (kt)Grade

Zn (%) Pb (%) Ag (g/t) Cu (%)

Proven 3,931 0.4 - 32 2.2

Probable 77 0.5 - 34 2.0

Proven + Probable 4,008 0.5 - 32 2.2

15.2 Mining Cut-Off Value

Zinkgruvan Mine utilises a Net Smelter Return (NSR) calculation to determine the value of

each individual stope or stope block.

The NSR is calculated on a recovered payable basis taking into account copper, lead, zinc

and silver grades, metallurgical recoveries, prices and realization costs.

The cut-off value is based on the variable operating cost of the mining, milling and general

and administration, development cost multiplied by a ratio of the future waste/ore

production; and sustaining capital based on the five year budget.

The June 2012 Reserve Estimation applies different cut-off variables to different mining

areas of the mine;

Burkland and Nygruvan SEK300/t;

Västra fältet SEK420/t; and

Copper Orebody SEK420/t.



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Figure 15.1: Knalla Reserve Classification



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Figure 15.2: Nygruvan Reserve Classification



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15.3 Mining Factors

Factors derived from operational experience for dilution, recovery, backfill dilution and

mining losses are applied to the stopes. The planned mining factors applied to the various

mining areas are summarised in Table 15.2.

Table 15.2: Mining Factors

Mine Area Burkland Cecilia Omr 10 Ny 240-260 cdf Sävsjön Borta B Copper

Dilution (%) 12 25 25 22 25 25 25 12

Mining recovery(%) 97 95 95 95 95 95 95 95

Ore loss (%) 5 5 5 5 5 5 5 5

Backfill dilution (%) 3 0 0 0 0 0 0 3

The methodology employed for defining Mineral Reserves at Zinkgruvan takes account both

the economic and practical operational constraints of mining the orebodies. The mine

Mineral Reserves are supported by detailed mine plans and appropriate, operationally

derived, dilution and recovery factors applied to the geological resource.

15.4 Reconciliation

Detailed stope reconciliation exercises are undertaken by the staff at Zinkgruvan on an

annual basis. The actual tonnage and grade of ore processed in the mill is compared with

the original mining plan for that year, based on the modelled tonnages and grades.

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.

The annual reconciliation determined the average mining factors presented in Table 15.3.

Table 15.3: Reconciliation: Average 2012 Stope MiningFactors (%)

Dilution 11.6

Ore addition 0.4

Past fill dilution 0.3

Ore losses 10.0



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15.5 Mine Call Factor

Reconciliation of the mine production plan with the plant production defines the mine

tonnage and grade corrections factor.

Table 15.4: Tonnage Correction Factor

All resource areas 0.75

Table 15.5: Grade Correction Factor

Zn 0.95

Pb 0.94

Cu 0.95

Ag 0.93



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16 MINING OPERATIONS

The long mining history of Zinkgruvan has seen a dramatic development in the technologies

and systems used to mine and process the ores. A new shaft and processing facility was built

in 1977 and since that time new equipment and automation have been introduced to both

the mine and mill operations.

In the mid-1990s, the increasing size of the underground mined out areas, coupled with the

inherently high horizontal ground stress led to increasing difficulty in maintaining stability of

the stope hangingwalls. As a result, the mining methods and sequences were changed and a

new 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.

Figure 16.1: Schematic 3D View Shown the Present Mining Areas



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The Zinkgruvan underground mine has three main shafts with current mining focused

largely on the Burkland and Nygruvan deposits. Shafts P1 and P2 at Nygruvan are 735 and

900m deep respectively, with P1 used for hoisting personnel and P2 used for ore and waste

hoisting, materials and personnel. In 2010, a ramp from surface down to a depth of 350m

was completed, connecting in to the existing internal infrastructure in the mine. The Knalla

shaft, P3, is 350m deep and is not a significant part of the current or future operating plan

and serves only as an emergency egress and to support mine ventilation.

16.1 Geotechnical

16.1.1 The Stress Environment

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 orebody, and roughly perpendicular to the Burkland orebodies. 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

Orebody is ϬH=64MPa, Ϭh=45MPa and Ϭv=28MPa.

The following stress profile represents the stress environment at Zinkgruvan Mine.

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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16.1.2 Rock Mass Properties

Geological strength index (GSI) is used to describe the rock mass (Table 16.2).

Table 16.2: Geological Strength Index (GSI)Rock Type

Biotite Reletively competent rock, with GSI typically ranging between 50 and60 based on estimations and previous experience.

Leptite and.or Skarn-leptite Fairly competent rock with GSI in the range of 50 to 65, althoughzones with quality rock occur intermittently.

Zinc-lead ore Competent rock with relatively consistent GSI-rating between 60 and70, locally up to 80 in areas with very high strength rock with fewstructures.

Limestone/marble Relatively good rock with GSI in the range of 60 to 65, locally as highas 80.

Copper Ore Relatively good rock with GSI varying between 55 and 65, locally ashigh as 80 with few fractures

Quartz feldspar leptite Very good rock with GSI ratings in the range of 70 to 82, with littlevariation in the exposed areas.

16.1.3 Rock Mass Strengths

Summarised estimated rock strengths following the Hoek and Brown Criterion and

Geological Strength Index rock mass classifications, are presented in Table 16.3.



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Table 16.3: Rock Strengths

Rock Type Strength miσc

(MPa)GSI

c(MPa)

φ(°)

σtm

(MPa)

Biotite leptite (Znfootwall)

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 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/orSkarn-leptite (Znhangingwall)

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

16.2 Hydrological

Zinkgruvan Mine is an extremely dry operation with no substantial water inflow to the

underground workings.

16.3 Mining Method

Three stoping methods are utilised at Zinkgruvan Mine, transverse bench and fill, double

sub level mining (double bench mining) and a modified Avoca mining method.



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16.3.1 Transverse Bench and Fill (Panel Mining)

In the Burkland deposit, 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

38m high by 20m wide for the primary stopes and 25m 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 LHDs. The panel stoping mining method and

sequence are shown in Figure 16.2.

Figure 16.2: Transverse Bench and Fill (Panel Mining)



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On completion of mining, the stopes are backfilled with paste fill with 4% cement content

for the primaries and a lower strength 2% cement content for the secondary stopes. 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.

16.3.2 Double Sub-Level Mining (Double Bench)

In the Nygruvan deposit, long hole transverse bench and fill stoping is also used with a

sequence of primary and secondary stopes. In selected areas, double benching is practiced

where two sub levels are mined at the same time. 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.

Ore from Burkland and Nygruvan is fed through an ore pass system to the 800 and 900

levels respectively, where it is transported by truck to the crusher at the P2 shaft. Ore from

levels below 800 is loaded directly in to trucks for ramp haulage to the crusher.

16.3.3 Modified Avoca Mining

In Cecilia 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, Figure 16.3. Following

blasting the stope is mucked with constant monitoring to avoid excessive dilution.



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Figure 16.3: Modified Avoca Mining

16.3.4 Future Deep Extraction

Zinkgruvan Mine are presently evaluating extracting the lower levels of Nygruvan and

Burkland by a top down mining sequence rather than the existing bottom up sequence of

extraction. This will reduce the amount of up front development required before extraction

can be undertaken, but will require working below cement filled stopes.

16.4 Production Schedule

The Mine is currently targeting future production levels of 1.15Mtpa lead-zinc ore, 0.3Mtpa

copper and the requisite waste. The next ten years planned production is presented in Table

16.4 and the location of the next five year production is presented as long sections of the

three main stoping areas in Figure 16.4, Figure 16.5 and Figure 16.6.



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Table 16.4: Next Ten Years Planned Production from the LOM Plan2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Total Zn OreProduction (tonnes)

1,050,115 1,110,007 1,160,286 1,165,828 1,169,711 1,207,006 1,042,474 959,478 871,745 703,009

Zn Grade % 8.2 8.7 8.8 9.5 9.7 8.4 8.5 9.5 10.3 19.6

Pb Grade% 4.3 4.2 3.6 4.0 3.9 3.7 3.5 3.3 3.9 3.5

Ag Grade g/t 81.1 86.5 75.9 89.8 84.4 80.4 76.0 77.5 84.4 69.1

Total Cu OreProduction (tonnes)

186,000 143,799 293,973 312,386 333,528 333,998 327,906 338,619 293,039 271,778

Cu Grade % 2.4 2.3 2.0 2.0 2.1 1.8 2.2 2.2 1.9 1.8

Ag Grade g/t 20 20.6 24.0 25.1 27.4 22.5 22.6 24.6 25.7 27.7

Total WasteDevelopment (tonnes)

218,276 223,817 251,255 244,542 238,775 202,740 162,499 77,786 47,461 49,244

Figure 16.4: Cecilia Planned Production 2013-2017



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Figure 16.5: Burkland Planned Production 2013-2017



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Figure 16.6: Nygruvan Planned Production 2013-2017

LUNDIN MININGNI 43-101 Technical Report for Zinkgruvan Mine,Sweden


Final V3.0 Page 101

16.4.1 Ventilation

Zinkgruvan Mine effectively comprises two ventilation district; Knalla and Nygruvan. The

ventilation networks are modelled in Mine Ventilation Service Inc. VnetPC software. Refer

Figure 16.7 and Figure 16.8.

Figure 16.7: Zinkgruvan Knalla Section Ventilation Network



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Figure 16.8: Zinkgruvan Nygruvan Section Ventilation Network

Thorax shafts have a heat exchange installed; Kristena and P1 have oil fired air heaters.

16.5 Equipment

The underground mining equipment operated at Zinkgruvan Mine includes the following

items (see Table 16.5).



Final V3.0 Page 103

Table 16.5: Underground Equipment List

Designation Manufacturer Number

Rockbolter Atlas Copco 6

Cablebolter Atlas Copco 1

Charging Vehicle Bolidens mekaniska verkstad 1

Charging Vehicle Dyno Nobel 1

Charging Vehicle GIA 2

Cherry Picker Carl Ström 3

Cherry Picker GIA 11

Cherry Picker Volvo 2

Drilling Unit Atlas Copco 13

Drilling Unit Contecktor 1

Dump Truck Volvo 14

Excavator Caterpillar 3

Excavator Larssons maskiner Be 1

Excavator Mini maskiner 1

Excavator Volvo 1

Forklift Jungheinrich 1

Forklift Lundberg Hymas Skell 1

Forklift Servicebyn AB 1

Forklift Valmet 1

Loader Atlas Copco 1

Loader Cat 4

Loader Caterpillar 4

Loader Sandvik 4

Loader Volvo 8

Misc. Vehicles Various 9

Personel Vehicles Nissan/Ford/Chevrolet/Renault/VW 59

Scaler JAMA 5

Dewatering vehicle Volvo 1



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17 RECOVERY METHODS

17.1 Introduction

The existing Zinkgruvan Lead-Zinc Plant commenced production in 1977 and uses the

conventional processing technologies of crushing, milling, flotation and concentrate

dewatering to produce lead and zinc concentrates. The plant also produces paste for

underground backfill.

In June 2010, the Copper Circuit was commissioned to produce copper concentrate using a

separate grinding, flotation and dewatering circuit. The throughput of the copper circuit is

designed at 300ktpa and although throughputs at this rate have been achieved over short

periods, full processing of 300ktpa is not planned until 2015. During periods when the mine

does not produce 300ktpa of copper ore, the copper grinding circuit is able to mill zinc-lead

ores.

Both the zinc and the copper ores are relatively easy to process and have resulted in good

metallurgical performances. The copper ore responds favourably to beneficiation with

recoveries of 90.7% being obtained since the circuit was commissioned, while lead and zinc

recoveries are typically 86% and 92% respectively. The zinc throughputs continue to

increase with a record 118.3kt being milled in December 2011.

The lead-zinc, copper ore and some waste rock are hoisted to surface and are fed through a

common screening and crushing plant. As part of process and environmental improvements,

Zinkgruvan plan to remove the crushing circuit, processing run-of-mine ore with Fully

Autogeneous Grinding (FAG) technology in 2015. This will involve treating the copper ore

through the existing zinc AG mill circuit while grinding the zinc ore through a new higher

capacity FAG mill circuit. Preliminary estimates have shown the cost of the project to be

US$51M.



Final V3.0 Page 105

17.2 Flowsheet Description

17.2.1 Crushing Circuit

In 2009, Metso Minerals installed the crushing plant with the objective of increasing the

throughput of the Autogenous Grinding (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 ore.

A simplified flowsheet for the crushing circuit is shown in

Figure 17.1.

Figure 17.1: Simplified Flowsheet for the Crushing Circuit

Three material types are brought to surface in campaigns via the mine hoist. These include

zinc ore, copper ore and waste rock. Once treated through the crushing plant, four products

are produced:

Copper ore, -15mm;

Zinc ore, -15mm;

Zinc ore, -250mm, +90mm; and

Hoist +90mm Coase Ore

(Shaft P2) Stockpile (Pb-Zn)

Grizzly -15mm Fine Ore

(Vibrational) Stockpile (Pb-Zn)

Double Deck -90mm, +15mm

Screen

Transfer Cone Crusher Double Deck Cone Crusher

Station (GP3005) Screen +15mm (HP4)

-15mm

Fine Ore Copper ore

Waste Stockpile (Cu) Lead-zinc



Final V3.0 Page 106

Waste, -250mm.

Primary crushed ore (crushed underground to minus 250mm) is conveyed from the P2 shaft

to a double-deck screen fitted with 100mm and 15mm screen decks. Material <100mm can

be sent either of two ways, depending on the material hoisted.

Copper ore and waste material are conveyed to a transfer station where they are either sent

to a waste stockpile or to the copper crusher circuit. Copper ore is fed to a Metso GP3005

cone crusher. The cone crusher product reports to a double deck screen from where the

+15mm fraction reports to a Metso HP4 cone crusher. The crushed product returns to the

secondary double deck screen. The minus 15mm fraction from the screen is conveyed to the

copper fines (-15mm) stockpile.

Zinc ore is transferred to a double deck screen where material >90mm is conveyed to a

coarse ore stockpile located inside the stockpile shed. Ore from the coarse ore stockpile is

reclaimed by vibrating feeders for mill feed. Similarly, ore screened to minus 15mm is

conveyed to the zinc stockpile located in the stockpile shed.

Zinc ore screened to a size fraction of -90 +15mm 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 the other located inside the

Stockpile Shed). Ore from the outside fine ore stockpile can be sent to the stockpile shed.

Finely crushed zinc ore from the stockpile shed is reclaimed by vibrational feeders as mill

feed.

The throughput of the crusher plant has been lower than anticipated due to various design

flaws. These include; poor material handling (exacerbated during winter months), the design

makes maintenance more difficult and there is no surge capacity between the hoist and the

crusher circuit. In addition to production related issues, noise and dust created by the

crusher circuit has caused minor environmental issues, affecting near-by residences. To

maintain throughput objectives, Zinkgruvan has been using contractor pre-crushing

equipment; however this has further complicated noise and dust issues. Zinkgruvan plan to

significantly reduce contracted crushing from 2012 onwards, which will see the amount of

ore crushed by this route reduce from 190ktpa (forecast for 2012) to 20ktpa in 2013.



Final V3.0 Page 107

In order to resolves these issues, Zinkgruvan selected two preferred options from work done

by Jacobs Engineering and others, these were:

Option 1 (Base Case): Improvement of the existing crushing facility,

upgrading equipment and eliminating bottlenecks where possible. The design

would improve environmental, safety and maintainability issues; and

Option 2: Replacement of the existing crushing and screening circuits by

introducing autogeneous grinding of copper ore and installing a new higher

capacity AG mill for the zinc ore.

After reviewing the various options, Zinkgruvan have selected Option 2 as the preferred

option, as it was shown to deliver the most acceptable outcomes in solving the current

issues. Option 2 also allows for the potential to expand the lead-zinc Plant to 1.5Mtpa in

future years. Zinkgruvan now plan to select a consultant to undertake a feasibility study with

the aim of commissioning of the circuit in Q1 2015.

In the interim, Zinkgruvan have been actively remedying some of the issues surrounding the

crushing plant. This has included the initial construction of a 10m high berm around the

crushing circuit to limit noise and placing external cladding around some of the key areas of

the crushing circuit that are high emitters of noise and dust.

17.2.2 Lead and Zinc Circuit

17.2.2.1 Introduction

The lead-zinc flowsheet uses conventional technologies including AG milling, flotation,

thickening and filtration. The flowsheet is summarised in Figure 17.2.



Final V3.0 Page 108

Figure 17.2: Simplified Flowsheet for the Lead-Zinc Circuit

17.2.2.2 Autogenous Grinding (AG)

The feed to the mill consists of approximately 30% lump ore (+90mm) and 70% finely

crushed ore (-15mm). The ore is ground in a single Morgardshammar CHRK 6580 AG mill to

80% passing 130μm. 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 Krebs 500mm cyclones

with the underflows returning to the mill and the overflows passing to the bulk lead-zinc

flotation circuit.

17.2.2.3 Flotation

The Zinkgruvan flotation circuit is unusual, as it involves the bulk flotation of lead and zinc

minerals. The bulk concentrate is then subjected to a separation stage where zinc minerals

are depressed and lead minerals floated.

The cyclone overflow is conditioned with sulphuric acid to reduce the pH to 8 with sodium

isopropyl xanthate (SIPX) used as the collector. The pulp is pumped to two 38m3 OK rougher

ROM Ore

Stockpiles

AG

Mill

Rougher Rougher-Scavenger Tai ls Tailings Tailings

Float Float thickener Facility

Conc. Conc.

Bulk Cleaner Tai ls Regrind Paste

Float Mill Plant

Conc.

Tertiary Lead - Zinc Zn Product Zinc conc. Zinc Conc.

Mill Seperation (tai ls) dewatering Stockpile

Pb Conc.

Lead Cleaner Conc. Lead conc. Lead Conc.

Float dewatering Stockpile



Final V3.0 Page 109

flotation machines and the concentrate from these cells passes to the lead-zinc bulk

cleaning stage. The tailings pass to six 40m3 Metso cells and the tailings from these cells are

the final plant tailings. The concentrates from the first four cells pass to the Pb-Zn bulk

cleaning stage and the concentrates from cells five to eight are pumped to a regrind mill.

The reground product is pumped back to the head of the rougher circuit.

The bulk lead-zinc concentrate is reground to 80% passing 44µm and the zinc minerals are

depressed by the addition of sodium metabisulphite. The separation is achieved in three

stages consisting of 6 x 15m3 and 4 x 15m3 Metso cells and a third, locally constructed, JELE

flotation cell.

The flotation plant is monitored using a Courier 30 on-stream analyser.

17.2.2.4 Dewatering

The lead concentrate passes to a Sala 7m diameter thickener and the zinc concentrate is

dewatered in a 15m diameter Sala thickener.

The lead concentrate is filtered using a Svedala VPA pressure filter and the zinc concentrate

is filtered using a VPA 15 pressure filter.

17.2.2.5 Paste Fill

The processing plant staff are responsible for operating a conventional paste backfill plant

which consists of a Baker Hughes 10.5m thickener, a Dorr Oliver disc filter (11 x 3.25m discs)

and mixer tanks. Cement is added at a rate of 2% for secondary stopes and 4% for primary

stopes. The paste is pumped underground at 78% solids. Paste production in 2011 was

154,367m3, which is significantly less than in 2006, when some 271,664m3 were backfilled.



Final V3.0 Page 110

17.2.3 Copper Circuit

17.2.3.1 Introduction

The copper circuit is a relatively new addition to the facility and was commissioned in June

2010. The circuit has a design capacity of 300ktpa and uses conventional crushing, grinding

and flotation technologies, as shown in Figure 17.3.

Figure 17.3: Simplified Flowsheet for the Copper Circuit.

17.2.3.2 Grinding

Crushed ore (-15mm) is conveyed to a single 3.3m diameter, 6.6m long ball mill fitted with a

1,250kW motor. The mill has an adjustable speed drive. The ball mill is operated in closed

circuit with a cluster of three “gMax” 381mm (15 inch) diameter cyclones with the target

product grind size of some 80% passing 80µm.

Copper Ore

Stockpile

Ball

Mill

Rougher Tails Rougher Scavenger To Tailings

Flotation Flotation Facility

Conc. Conc.

Three Stage Tails Regrind

Cleaner Flotation Mill

Conc.

Concentrate Concentrate Concentrate

Thickener Filter Stockpile



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17.2.3.3 Flotation

Flotation takes place in eight 15m3 Metso flotation cells. The rougher concentrates (first

four cells) are cleaned three times to produce a final copper concentrate assaying 25% Cu

with 92% recovery. The cleaner tailings and scavenger concentrate are re-ground in a 1.8m

diameter, 3.6m long ball mill fitted with a 132kW motor.

17.2.3.4 Dewatering

The copper concentrate is dewatered using a 10m diameter Sala unit. The thickened

concentrate is filtered using a Metso VPA pressure filter.

17.3 Production Data

17.3.1 Lead and Zinc Circuit

The production throughput records for the concentrator since 1985 are summarised in

Figure 17.4 below.

Figure 17.4: Zinkgruvan Pb-Zn Mill Feed Data (2012: September YTD)



Final V3.0 Page 112

Throughput has remained relatively consistent from 1985 to 1995, averaging some 670ktpa.

After 1995, the throughput steadily began to increase reaching 787ktpa in 2006. The

throughput significantly increased from 2006, reaching 1,018ktpa in 2011. In 2012 (up until

September), some 844kt of lead-zinc ore has been processed.

Lead head grades have ranged from 1.59% to 4.56% Pb and have been higher in recent

years since the treatment of Burkland Ore. Zinc head grades have ranged from 7.2% to

11.2% Zn and have been highly variable since 2000.

The plant recoveries of lead and zinc are given in Figure 17.5 below.

Figure 17.5: Zinkgruvan Pb-Zn Circuit Recoveries (2012: September YTD)

Between 1985 and 2011, lead recoveries have ranged from 83% to 85.4%. In 2005, the lead

recovery peaked at 89.5% after which it has fallen slightly. For 2012, year-to-date lead

production records show an improvement with a recovery of 85.4% being obtained.

Zinc recoveries have remained relatively consistent, ranging from 95.3% (1985) to 91.5%

(2011). At the beginning of the decade the recoveries fell to 86.4% but thereafter they

increased and have since remained above 90%.



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The grades of lead and zinc concentrates produced are shown in Figure 17.6 below.

Figure 17.6: Zinkgruvan Lead and Zinc Concentrate Grades

(2012: September YTD)

Between 1985 and 2011, the lead concentrate grades have ranged from 62.7% to 75% Pb.

Recent years have seen the concentrate grade increase to 76.7% Pb which is an

exceptionally high grade concentrate. Silver grades in the lead concentrate are typically in

the range 1,100 to 1,500g/t Ag.

Zinc concentrate grades have remained consistent since 1985 to 2011 with grades averaging

54.8% Zn. Zinc concentrate grades have decreased slightly in recent years from 56.7% Zn

(1998) to 52.6% Zn (2011). However, year-to-date records for 2012 show an increase in the

concentrate grade with 54% Zn being obtained.

17.3.2 Copper Circuit

The copper circuit was commissioned in June 2010. The production throughput records for

the concentrator since commissioning are summarised in Figure 17.7 below.



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Figure 17.7: Zinkgruvan Copper Mill Feed Data (2012: September YTD)

During commissioning in 2010, the throughput of the copper circuit was 27.2kt, averaging

some 33tph. The throughput significantly increased to 109.6kt in 2011, as the circuit ran for

a period of eleven months; however the feed rate was below the design rate at 35tph. In

2012 (YTD), the copper circuit has processed some 115.9kt of copper ore at a processing

rate of 43tph.

The copper head grade fell from 2.2% Cu in 2010 to 1.78% Cu in 2011; however the 2012

year-to-date records show the copper head grade is now at 2.25% Cu.

The plant copper recovery and concentrate grade are given in Figure 17.8 below.



Final V3.0 Page 115

Figure 17.8: Zinkgruvan Copper Recovery and Concentrate Grade

(2012: September YTD)

The copper recovery has remained relatively unaltered since the circuit was commissioned

in 2010. The copper recovery for 2012 (up until September) is 91.63%.

The copper concentrate grade has also remained relatively steady, with a grade of 25.26%

Cu being obtained for 2012 (up until September). The concentrates generated for 2012 have

on average contained 1,036g/t As, 1.05% Pb and 5.92% Zn and 193g/t Ag. The copper

concentrate incurs penalty charges due to the presence of lead and zinc although these are

offset by the credits received for silver.

17.4 Plant Consumables

The consumables for the copper and lead-zinc circuits are summarised in Table 17.1.



Final V3.0 Page 116

Table 17.1: Plant Consumables (2011)Item Units Consumption

Steel Media g/t 48

Xanthate g/t 54

Dow Frother g/t 89

Flocculant g/t 93

Cement g/t 8,751

Sodium Hydroxide g/t 106

Sulphuric acid g/t 629

Sodium Bisulphite g/t 2,129

Electricity kWh/t 34.6

Power costs in recent years have been highly variable. Electricity is currently bought on the

spot market and the budgeted figure for 2012 was €0.10/kWhr.

The plant consumables are typical for the treatment of a moderately soft copper and lead-

zinc ore.

17.5 Mill Labour

The Mill Manager is responsible for both the copper and zinc circuits including the paste

backfill plant. The concentrator is operated with five shift crews for a total complement of

60 personnel. 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. The

manning levels are summarised in Table 17.2.

Table 17.2: Mill Labour (2011)

Personnel Number of Staff

Mill Manager 1

Supervisor 7

Metallurgy 1

Production 25

Maintenance 14

Electrical 8

Laboratory 4

Total 60



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17.6 Assay Laboratory

The assay laboratory only undertakes analysis of samples generated from the processing

plant. Geological samples are prepared at the facility and are sent to an external laboratory

for analysis.

The assay laboratory receives 15 process samples each day. Pulp samples are filtered, dried

and representatively split (using Jones Riffles) 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.

Chemical analysis is generally undertaken using two acid digestions:

250mg of pulp is boiled in 10ml of HNO3 with the sublimate being re-

dissolved in HCL. The sample is then diluted in H2O and analysed for Zn, Pb,

Ag, Cu, and Fe by AAS; and

500mg of pulp is boiled in 15ml of aqua regia, the solution is then reduced

before being dissolved in H2O to analyse for Co and Ni by AAS.

Following acid digestion, the samples are analysed using Atomic Absorption Spectroscopy

(AAS). Blanks, duplicates and in-house standards are routinely applied during analysis.

However, the laboratory does not send samples to external laboratories for systematic

verification (Round Robin). The laboratory is not accredited and QA/QC procedures could

not be obtained during the site visit.

WAI recommends that the laboratory obtains accreditation and that samples are routinely

sent to external laboratories as part of a quality assurance programme, although it is noted

that no samples used in the Mineral Resource estimate are assayed in this laboratory.



Final V3.0 Page 118

18 PROJECT INFRASTRUCTURE

The Zinkgruvan mine is located in the south-central Sweden, 175km west-southwest of

Stockholm. The mine site is some 15km from the town of Askersund and comprises a deep

underground mine, a processing plant and associated infrastructure and tailings disposal

facilities. Concentrates are trucked from the mine to a nearby inland port from where they

are shipped via canal and sea to European smelter customers.

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.

The mine is well served by roads. Currently all ore is transported by road approximately

100km to the inland port of Otterbäcken where it is loaded on to sea going ships for

transport to smelters.

Electricity is obtained from the National Grid. It is understood that the majority of electricity

generation in the area is via hydro-electric schemes, although recently a number of wind

turbines have been installed adjacent to the mine. The mine site is well served by

telecommunications with excellent mobile phone coverage.

Annual energy consumption at the mine is recorded at 104GWh (both electric and fossil fuel

energy). Sweco Environment AS has investigated potential energy savings at the mine and

the mine has an Energy Reduction Plan (2011) comprising 11 separate topics, 9 of which will

be fully implemented within the next 2-3 years. US$1.7M investment in this area should

result in the saving of 2,250t CO2/year. One of the areas with the biggest potential to save

energy is the optimisation of the mine ventilation which, on its own, has the potential to

save 2,250MWh.

50% of the water sent to the tailings management facility (TMF) is returned to the

processing plant. Water removed from the underground workings, together with all site

drainage water is sent to the TMF with the tailings/process water. Total mine dewatering

produces around 600,000m3/y water.



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The mine is able to extract water from Åmmeberg (Lake Vattern) for use in the process.



Final V3.0 Page 120

19 MARKET STUDIES AND CONTRACTS

Storage capacity at the mine is around 4,000wmt for zinc concentrates, 2,000wmt for lead

concentrates and 1,500wmt for copper concentrates (Photo 19.1). 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).

Photo 19.1: Concentrate Warehouse and Weighbridge at Zinkgruvan

At Otterbäcken the concentrates are stored in a warehouse owned by the port operator

Vänerhamn and rented to Zinkgruvan (Photo 19.2). Vänerhamn also owns the terminal at

the port and have given the right to use the same to Zinkgruvan. The terminal is fully ISPS

compliant.

The storage capacity at Otterbäcken is around 30,000wmt, divided into four storage bins

with the respective capacity of 10,000wmt for zinc concentrates, 8,000wmt for lead

concentrates, 8,000wmt for copper concentrates and 4,000wmt used for storage of a small

quantity of mixed concentrates coming from the cleaning of the port and warehouse after

loading and which are trucked back to Zinkgruvan for reprocessing.



Final V3.0 Page 121

Photo 19.2: Port of Otterbäcken Warehouse

Stevedoring is performed by Vänerhamn under contract. Loading is performed by two front

end loaders transporting the concentrates from the warehouse to the quay where a mobile

crane is used for loading the vessel. The load rate is approximately 500wmt/h.

The concentrates are shipped from Otterbäcken by bulk vessels. Since Otterbäcken is

located on the 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. Zinkgruvan is

using Thun, a Swedish ship-owner, with whom they have a long term contract of

affreightment.

Photo 19.3: Vessel Loading in Otterbäcken



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Official weighing and sampling is normally done at the discharge port under the supervision

of an internationally recognized company.

All concentrates, zinc, lead and copper, are predominantly sold under long term contracts

directly to mainly European smelters. However, some 10%-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 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 for zinc, lead and copper

concentrates or better.

All silver contained in the concentrates belongs to 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 Environment, Social Setting and Context

Zinkgruvan is a zinc-lead-silver mine located near Åmmeberg in Askersund Municipality,

Örebro County, in the Province of Närke, Sweden, approximately 250km west of the

Swedish capital, Stockholm. The ore deposits are located just to the east of northern Lake

Vättern. There is a long history of mining in this area with iron ore and silver being exploited

from the 14th century. Mining at Zinkgruvan has been continuous since the Belgian Company

Société des Mines et Fondries de Zinc de la Vieille Montagne (Vieille-Montagne) opened the

current mine. Zinkgruvan was part of Vieille-Montagne for 138 years. In 1995, the mine was

sold to the Australian mining company North Ltd, who in turn was taken over by Rio Tinto in

2001. In 2004, the Swedish-Canadian exploration company, South Atlantic Ventures Ltd

acquired Zinkgruvan and in the same year was renamed Lundin Mining Corporation.

20.1.1 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 the Lake Vättern. Of

particular significance are the surface water bodies of the Enemossen TMF, an area of

former boggy terrain, that now forms the principal tailings disposal facility for the mine, a

small natural lake, named Hemsjön, situated immediately to the south of the current TMF

and a Clarification Pond (Klarningssjö), artificially created by pumping return water from the

TMF to a holding lake to settle any solids prior to pumping water back to the plant for use in

the process. Water in the clearing pond has an average residence time of around 7 days.

Hemsjön is currently under consideration as a potential TMF location for the tailings

disposal area required once the Enemossen TMF is full in 2017.



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Photo 20.1: Clearing Lake – Klaringssjö – Used to Clarify Water

Before Return to the Process Plant from the TMF

20.1.2 Groundwater

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 processing.

A comprehensive groundwater modelling exercise has been undertaken by local consultants

and is included with the recent EIA prepared to support the licence changes required in

2017 when a new TMF will be required. WAI understands that apart from use of

groundwater abstracted from the mine working (recovered via the TMF) there are no

additional users of groundwater in the immediate vicinity of the mine.

20.1.3 Water Supply

50% of the water sent to the TMF is returned to the processing plant. Water removed from

the underground workings, together with all site drainage water is sent to the TMF with the

tailings/process water. Total mine dewatering produces around 600,000m3/y water.



Final V3.0 Page 125

The mine is able to abstract water from Åmmeberg (Lake Vattern) for use in the process.

The current permit allows pumping of up to 110l/s but it is understood that currently 35l/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, for

use in the process.

20.1.4 Communities and Livelihoods

There has been a history of mining at Zinkgruvan dating back over 150 years. Indeed, the

current township owes its existence to mining.

Forestry and agriculture complement mining as a main source of income in the area.

20.1.5 Infrastructure and Communications

The mine produces a regular local newsletter for the local community and 3-4 times a year a

magazine that is freely available in the community.

20.2 Project Status, Activities, Effects, Releases and Controls

20.2.1 Past Activities

Until the 1970’s ore was processed in Åmmeberg on the shores of Lake Vättern. Ore used to

be roasted and for over 120 years >3Mm3 of tailings were deposited in the Lake. The

buildings that contained the former processing facilities have been restored and are now

primarily used for light industry. Some buildings, such as the former locomotive shed have

been preserved as a museum.

The former TMF has been restored for use as a golf course and marina/holiday village. The

present mining company retains certain residual liabilities associated with the former TMF

and processing facilities.



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20.2.2 Current Operations

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 TMF at Enemossen. Some tailings are thickened

to paste, mixed with cement and used to backfill active mine stopes.

The current environmental/operating licence for the exploitation of up to 1.5Mtpa ore

expires on 1 December 2017 from when the site will need a replacement licence. A new

licence application, for the exploitation of up to 1.5Mtpa ore was submitted in late summer

2012. As part of this application, Lundin Mining Corporation submitted an EIA for a future

expansion of mining and, as the existing TMF would be full in the next 6-7 years, details

were provided regarding a preferred replacement tailings disposal area in Lake Hemsjön.

AMEC performed a compliance check on the projects permitting package and Environmental

Impact Assessment against Swedish Regulations, EU regulations and the International

Finance Corporation (IFC) Standards (as amended in January 2012).

Photo 20.2: Tailings Disposal at Enemossen TMF



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20.2.3 Proposed Operations

Although the existing permit allows for the extraction of up to 1.5Mtpa ore, the future mine

operation will consistently extract higher tonnages of ore than achieved previously and the

recovery of copper will be integral to the processing.

The principal difference from an environmental perspective is probably the recommended

use of Hemsjön as a replacement TMF from 2017 onwards. Hemsjön is a natural lake up to

14m deep, although 4-5m depth is more typical. The company has calculated that this will

have a 17-18 years storage capacity for tailings produced at an annual rate of 400,000 –

500,000m3. The mine has produced capital estimates totalling US$12.74M between 2013

and 2017 to create the new TMF with an accuracy of + 25%. WAI considers that this figure is

realistic, but notes that these costs reflect development of a TMF at Hemsjön. Several other

alternative locations for the future tailings storage have been assessed and if one of these

were ultimately approved through the permitting process, the capital costs for these other

options could vary from the base case.

AMEC concluded that there were no non-compliance issues concerning Swedish Regulations

or EU Regulations and BAT. The documentation was found to be largely compliant with IFC

requirements with the following exceptions:

Discharge from the TMF has on occasion exceeded the IFC zinc limit of

0.5mg/l;

An additional section in the EIA was recommended to consider cumulative

impacts from the project;

A specific section describing community health and safety effects was

recommended so that it could be demonstrated clearly that relevant IFC

performance standards were being complied with; and

A Resettlement Action Plan and potentially a formal Livelihood Restoration

Plan should be considered.

WAI concurs largely with the findings of the AMEC Review. It is noted that, although

Hemsjon is the preferred option for the new TMF, Lundin Mining has considered a number

of alternative locations should tailings disposal at the preferred site not be possible.



Final V3.0 Page 128

There are studies underway to replace the front end crushing and grinding circuits and to

fully convert the existing zinc circuit to handle copper and build a new line for zinc.

Investment estimated at US$51M is required to achieve these plans. In addition to

metallurgical considerations these changes will result in environmental (dust and noise

reduction are expected) as well as health and safety improvements.

Photo 20.3: Pollution Control Sump at Zinkgruvan Mine to Collect Site Drainage Waters

WAI notes that the level of zinc in water associated with the tailings is relatively high (i.e.

exceeds the 0.5mg/l limit persistently). Zinkgruvan has attempted to implement changes,

especially in the management of surface drainage, that aim to restrict the amount of zinc

entering solution. WAI considers that if these measures do not result in the required

improvements some form of active treatment (such as precipitation) may be required to

comply with the mine’s IPPC licence.

20.3 Mine Waste Rock

Waste rock from the mine is preferably stored uncemented in the secondary stopes

underground. Where waste has to be hoisted to surface, it is either used for tailings dam



Final V3.0 Page 129

construction or crushed and sold into the local aggregates market. Some waste rock has

been used recently to form an acoustic bund around the crushing area of the site.

20.4 Water Management

All process water and water pumped from underground workings is pumped almost 4km to

the Enemossen TMF.

Site drainage and any arisings from sensitive areas around the site is 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 is pumped to the TMF with the tailings. Water

management and a comprehensive site water balance is covered in the recent (August

2012) EIA contained in the new Permit Application.

Apart from the tailings disposal, there are no aqueous effluents discharged from the site.

20.5 Emissions to Air

Permanent 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. In general WAI would agree that emissions to air at the site should not be regarded

as significant.



Final V3.0 Page 130

Photo 20.4: Dust Monitoring Outside Site Boundary

(adjacent to noise bund under construction)

Noise monitoring has demonstrated that during the day, noise levels are not a problem.

However, noise monitoring at the closest residential properties has demonstrated that night

time limits of 45dB(A) can be exceeded. An approximately 10m high bund is being

constructed around the site, adjacent to residential properties in Zinkgruvan. Although not

yet fully complete, this has already reduced night time noise levels at the nearest

properties. WAI considers that when finished the noise bund will ensure compliance with

permitted maximum noise levels.



Final V3.0 Page 131

Photo 20.5: Construction of Noise Bund

20.6 Waste Management

Excluding mine wastes (waste rocks and tailings) considered elsewhere, the mine produces

relatively small volumes of other categories of waste. All waste is segregated on-site,

collected in separate containers (skips) for off-site disposal. All waste is collected and

disposed of by appropriately licensed waste operators. WAI considers waste to be well

managed at the site.

20.7 Hazardous Materials

The principal varieties of hazardous waste produced at the site are relatively small

quantities of materials such as batteries and relatively low volumes of waste oils.

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.



Final V3.0 Page 132

WAI considers that the separation, storage and disposal of hazardous materials conforms to

all EU waste directives and is considered best practice.

20.8 Security, Housekeeping and Fire Safety

At the time of the site visit, the standard of housekeeping was exemplary. The mine site is

surrounded by a fence with controlled access.

The TMF is located approximately 4km from the main mine site. The TMF (a clearing pond)

is not fenced and is accessible potentially by members of the public.

The mine has a number of 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 the fire would be attended by professional fire

fighters from Askersund and/or Mariedam (approximately 10 km away).

20.9 Permitting

Currently the mine is fully permitted and compliant in Swedish regulations. The current

Environmental/Operating Permit expires in December 2017.

20.9.1 ESIA

A formal EIA was prepared by local (Swedish) consultants as part of the application process

for a replacement permit. This EIA has been examined by international consultants and is

considered to satisfy Swedish, European and International EIA requirements.

20.9.2 Environmental Permits and Licences

An application was made in August 2012 for a replacement of the existing permit. To date

(December 2012) no formal feedback has been received.



Final V3.0 Page 133

20.10 Environmental Management

Lundin Mining does not operate a formally accredited Environmental Management System

such as ISO 14001. However, the mine operates in general accordance with ISO 14001.

There is a designated EHS manager who reports directly to the General Manager.

Environmental performance is reported on a monthly basis to the Main Board.

20.10.1 Environmental Policy and Company Approach

Lundin Mining publish Health, Safety, Environmental and Community policy statements in

all offices. The policy is bilingual (Swedish and English) and signed by Paul Conibear

(President and CEO) and is currently dated August 2011. It is the stated policy that Lundin

Mining “...is committed to achieving a safe, productive and healthy work environment...”

and that business should be carried out in “...a manner designed to protect our employees,

adjacent communities and the natural environment...”

Although not formally accredited to any recognised EMS the company operates to best

practice and standards reflective of best management systems.

It is company policy to have a complete audit, including EHS matters, every 3 years carried

out by independent consultants.

20.10.2 Environmental Management Staff and Resources

The HSE department at the mine comprises 10 people including 2 dedicated, specialist

environmental engineers who are responsible for sampling, and environmental monitoring

around the site.

WAI considers that adequate resources are devoted to environmental (and health and

safety) teams to ensure that they can work effectively. There is a small on-site laboratory.

Currently all environmental samples are analysed off-site. Whilst there are clear benefits in

such a policy (e.g. complete independence) investment in internal environmental analyses

could be useful in allowing additional, routine samples to be examined and assist with early

identification if there are any concerns.



Final V3.0 Page 134

20.10.3 Systems and Work Procedures

The mine has written Standard Operating Procedures for all work tasks. These are reviewed

regularly and assessed against best practice for EHS matters.

20.10.4 Environmental Monitoring, Compliance and Reporting

The current environmental monitoring and sampling position is provided in Table 20.1. In

addition there is a geotechnical inspection of the dams at the TMF at least once per year.

LUNDIN MININGNI 43-101 Technical Report for Zinkgruvan Mine, Sweden


Final V3.0 Page 135

Table 20.1: Overview Sampling/MeasurementParameter Measuring

LocationSample/Measurement Frequency Conducted by Documented

byConditions/Terms

Water Clearing lake Watersample andwaterflow

Once everymonth

HN/TK/AT HMS ZN 0.5mg/l, PH<7.0 Susp5.0, Pb 75µ/l, Cd 0.5µg/l,

Cu <20 µg/l

Clearing lake Watersample Weekly HN/TK/AT HMS ZN 0.5mg/l, PH<7.0 Susp5.0, Pb 75µ/l, Cd 0.5µg/l,

Cu <20 µg/l

Mine Water Watersample Twice per year HN/TK/AT HSM -

Mine water Watersample Weekly HN/TK/AT HMS -

Spare pond,industry area

Watersample Twice per year HN/TK/AT HMS -

Björnbäcken Watersample 4 times peryear

HN/TK/AT HMS -

Åmmeberg,golfcourse

Watersample 4 times peryear

VP/allmänservice HMS -

Åmmelången-lake Trysjön

Waterflow Weekly VP/allmänservice HMS Max 110 l/s, yearly average 50 l/s

lake Trysjön –processing plant

Waterflow Weekly VP/allmänservice HMS Max 140 l/s

Lake wiksjön-Salaån

Waterflow Weekly VP/allmänservice HMS Sept-Apr 10 l/s, May-August 15 l/s

Clearing lakeEkershyttebäcken

Waterflow Weekly VP/allmänservice HMS Max 300 l/s

Clearing lakeProcessing plant

Waterflow Weekly VP/allmänservice HMS -

LakeÅmmelången

Waterlevel Weekly VP/allmänservice HMS Dammed: +93.52Lowering: +92.50



Final V3.0 Page 136

Table 20.1: Overview Sampling/Measurement (Continued)Parameter Measuring

LocationSample/Measurement Frequency Conducted by Documented

byConditions/Terms

Lake Viksjön- Waterlevel Weekly VP/allmänservice HMS Damned: +173.00Lowering: +172.20

Lake Trysjön Waterlevel Weekly VP/allmänservice HMS Damned: +167.75Lowering: +172.15

Tailingspond Waterlevel Weekly VP/allmänservice HMS Damned: freeboard 2m

Tailingspond Watersample Weekly HN/TK/AT HMS -

Clearing lake Waterlevel Weekly VP/allmänservice HMS Dammned: +178.00

Clearing lake Watersample Weekly HN/TK/AT HMS -

North Vättern’scatchment area

Water sample, sedimentsample

Continuouslythroughout

the year

Medins Medins -

Noise Surroundingresidential area

External noise equivalentDb(a)

Every 3rd

year Independentconsultant

HMS Daytime (07-18) 55 dB(A)Evenings (18-22) 50 dB(A)

Night time (22-07) 45 dB(A)

Industry area Internal noise Continuously ? HMS ?

Dust Exhaust 800 m Dust, airflow,temperature

Every 3rd

year Independentconsultant

HMS Air from u.g crushing <20mg/m3Air from crushing a.g.<10mg/m3

Industry areasurroundings

Dust Once everymonth

HN/TK/AT HMS -



Final V3.0 Page 137

Data inspected by WAI indicates that monitoring confirms general compliance with all limits

established in the current permit and with the mine’s IPPC licence. There are two exceptions

to this statement; firstly the limit of 0.5mg/l for zinc has been exceeded consistently in

water sampling at the clearing lake, and secondly, night time noise levels have occasionally

exceeded the 45db (A) limit at the closest residential properties.

All monitoring results are provided to the Permitting Authorities and summaries of (where

required) results have been included in the recent EIA that formed part of the application

for a new Permit.

WAI considers that the measures taken to reduce noise levels, including the formation of a

noise bund that will ultimately be up to 10m high, should ensure that the 45db (A) limit is

achieved. The mine has initiated a series of improvements to better control surface drainage

and storm water at the site and there is some indication that this is beginning to result in

improved water quality. However, the basic chemistry of zinc is such that the permit limit of

0.5mg/l will be difficult to achieve consistently unless additional treatment methods are

considered.

20.10.5 Emergency Preparedness Response Plan

The mine has a current Emergency Preparedness and Response Plan (Räddningsplan) dating

from February 2012. The plan covers all foreseeable incidents and is updated, at least,

annually. The plan is readily available and contains up to date telephone numbers of the

people designated to co-ordinate the response to different scenarios.

20.10.6 Training

The HSE manager is responsible for training at the mine. Each new employee undergoes a

basic induction in environmental and health and safety. Regular training exercises

(emergency scenarios) are undertaken. Short, basic HSE training was given to site

contractors approximately 18 months ago and although external contractors were not

included in 2012 health and safety training activities, they were included in the more formal

emergency exercises. It is the intention to integrate long-term contractors better into the

training policy on site. All employee training records are up to date and kept in the HR

department.



Final V3.0 Page 138

20.11 Social and Community Management

As stated previously Lundin Mining has an integrated Health, Safety, Environment and

Community Policy. The company is committed to engage with the local community and

other interested parties in relation to all safety, health and environmental aspects of the

business.

20.11.1 Consultation, Dialogue and Grievance Mechanisms

Meetings are held between the mine and the local community. A public meeting was held

on 14 November 2012 in Zinkgruvan. A regular magazine and newsletter are published by

the mine and are freely available to the community.

The company operates a grievance policy and records all complaints in a formal manner.

Indeed, the initiative to create the noise bund resulted partly from complaints from the

public.

Table 20.2 below records all community concerns and complaints received by the Mine in

2012.

Table 20.2: External Complaints Received at Mine, 2012Date Concern Response Status

1) 27/07 Vibrations Vibration meterInstalled 27/07

No further complaintsreceived

2) 17/09 Dust from Copper andZinc Stockpiles

Better managementand re-organisation ofstock piles

Works completeNo recent complaints

3) 18/10 Dust from Copper andZinc stockpiles

See above Works completeNo recent complaints

WAI considers that the Company’s approach to consultation with the local community and

its grievance mechanism conforms to international best practice.

20.11.2 Social Initiatives and Community Development

The mine supports a number of events in the local community including sponsorship of the

local football team and the local cross-country skiing team. In addition the mine provides

financial support to the local mid-summer party. The 2012 budget for community



Final V3.0 Page 139

development has been set at US$130k. The mine is to provide specialist training equipment

for local schools, including provision of gymnastic facilities.

20.12 Health and Safety

Lundin Mining is committed to operating Zinkgruvan Mine to the best possible health and

safety standards, as demonstrated in its published Health, Safety, Environment and

Community Policy and believes in continuous improvement in their health and safety

performance.

20.12.1 Health and Safety Management

The mine has a dedicated Health and Safety Manager (HSE Manager) and the HSE

Department includes one fire safety specialist and one safety specialist. A medical station is

present at the Mine and from 2013 a nurse will be present on-site 2 days per week with a

Company Doctor hired in, providing 20hour per month consultation/advice. Regular blood

samples are taken of workers in contact with lead ores.

Lundin Mining actively encourages the reporting of near-misses and this possibly accounts

for the relatively high number of reported “incidents” compared with many other similar

installations. WAI understands that there have been no significantly elevated lead levels in

blood in recent times.

20.12.2 Performance and Accident Records

The number of lost time accidents showed a marked improvement between 1991 and 1996

(from a total of 48 in 1991 to 11 in 1996). However between 1996 and 2009 the statistics

remained relatively constant, although there has been sustained improvement since 2010.

The number of lost time accidents at the site including those to contractors is shown in

Figure 20.1.



Final V3.0 Page 140

Figure 20.1: Number of Lost Time Accidents (including contractors) 1991 – November 2012

LUNDIN MININGNI 43-101 Technical Report for for Zinkgruvan Mine,Central Sweden


Final V3.0 Page 141

The last fatality at the Mine was in 2002 resulting from an accident on a quad bike. This led

to a change in policy, banning the use of quad bikes around the site.

WAI considers that health and safety is well managed and conforms to best international

practice. Concern was expressed that a disproportionate number of the accidents at site

were to contractors and there is new effort to include external contractors in all future

training events. This approach is commended by WAI.

20.13 Mine Closure and Rehabilitation

The current Mine Closure and Rehabilitation Plan was produced by Nils Eriksson in 2009.

The plan was accepted by the Swedish Authorities. The 2009 plan was developed to

conform to the demands of the changes in closure regulation brought in by the Swedish

Authorities in 2008 (SFS 2008: 722). In essence the reclamation plan focuses on reclamation

of the Enemossen TMF. Reclamation of the TMF accounts for US$11.4M, i.e. the majority of

the total costs which had been estimated in 2009 at US$12.6M.

Closure Plans (and associated costs) are, by their nature, documents that need periodic (if

not continuous) updating, with detailed design only undertaken immediately prior to

closure. Lundin Mining recognised this and the 2009 should be regarded as an outline plan.

A detailed plan is only required by the authorities if the site has less than 5 years active life.

This is not the case at Zinkgruvan.

Lundin Mining recognises that it is time to review the current closure plan. The Enemossen

facility will be full by 2017 and on completion of this TMF progressive restoration and

rehabilitation of the Enemossen facility will be carried out. WAI considers that the current

plan remains valid but that it will need updating to reflect recent advances in restoration

techniques and costs will need updating. WAI notes that some long term testing of tailings is

underway at Enemossen. This work is being directed by the local university and will be used

to inform the next closure plan, especially with respect to cover requirements.

WAI is satisfied that the current closure plan adequately covers the main aspects that will be

required on closure and notes that the plan will be updated over the next few years. The

closure of the current TMF in 2017 allows potential for progressive restoration, the results



Final V3.0 Page 142

of which will be valuable to assist future closure plans for the new TMF as well as the rest of

the site.

WAI notes that there is little deposition of waste rock presently as virtually all is deposited in

secondary stopes underground or used in tailings dam construction. Previous waste rock

arisings have been used in road construction around the site and hence, there are no waste

rock dumps that will require restoration/rehabilitation.



Final V3.0 Page 143

21 CAPITAL AND OPERATING COSTS

21.1 Mining Costs

The current mine unit operating costs are presented in Table 21.1 below.

Table 21.1: Mining Operating CostsSEK/t Ore

Surface Operations

Mining Management 66.20

Mining Survey 1.94

Mining Geology 3.19

"Joint" Geology 1.47

Process management 6.18

Energy 25.04

Clearance 1.93

Ventilation 3.59

Other fixed installations 3.04

SubTotal 112.57

Underground Operations

Facilities leading / mountain stream 45.43

Backfill / mining building 4.26

Media 24.05

shipments 4.78

supplies 67.30

Joint staff / other 8.65

Joint costs u.j 5.02

Shaft / Clearance / Tips / Crushers / Skip 6.02

Pumps / fans 3.60SubTotal 169.12

Preparation

Total Surveys 10.29

Total Preparatory Work-Rock 55.06

Total Preparation/Production Ore 70.11Sub Total 135.46

Mining Costs

Drilling 13.80

Charging 1.85

Loading 7.84

Rock reinforcement 9.79

Bergtansport 1.13

Service Vehicles 2.61

Staff Transportation 2.34

Other Equipment 7.24

Sub Total 46.58

TOTAL OPERATING COST 463.73



Final V3.0 Page 144

21.2 Process Operating Costs

Zinkgruvan AB do not split the operating cost between the copper and lead-zinc circuit, but

instead report an overall operating cost for the entire processing plant. The operating cost

for the plant is summarised in Table 21.2.

Table 21.2: Operating Cost for Processing (2011)

Area SEK/t

Labour 28.42

Electricity 17.94

Consumables 34.77

Other Services 43.15

Maintenance 15.51

Total 138.79

Tonnage Treated, 000t 1,109

The operating cost for 2011 for the plant was 138.79SEK/t. The operating cost is therefore

US$20.8/t at an exchange rate of US$0.15 per 1SEK.

The process operating cost budget/forecast for 2012 to 2017 is presented in Table 21.3.

Table 21.3: Zinkgruvan Process Opex Plan/Forecast 2012 to 20172012

Actual2012

Budget2013

Forecast2014

Forecast2015

Forecast2016

Forecast2017

Forecast

Total Cost, MSEK 114.5 147.4 161.8 164.5 152.2 142.4 146.7

Unit Cost, SEK/t 133.1 123 131 131 105 96 98

Unit Cost*, US$/t 20.0 18.5 19.7 19.7 15.8 14.4 14.7

*based on an exchange rate of 0.15US$ per 1SEK.

This budget/forecast includes the zinc plant and copper plant. The operating cost up until

2014 is forecast to be US$19.7/t after which it reduces significantly, falling to US$14.7/t in

2017. The reduction in the plant’s operating cost is due to the commissioning of a new AG

mill in 2015 and increased throughputs.

21.3 Process Capital Costs

A summary of the process sustaining capital expenditures budgeted between 2013 and 2017

is summarised in Table 21.3 below.



Final V3.0 Page 145

Table 21.4: Summary of Plant Sustaining Capital Plan from 2013 to 2017

ItemCapital Cost, US$ ‘000

2013 2014 2015 2016 2017 Total

Tailings Facility and Pipeline 1781 1336 1336 3,562 0 8,015

Plant Upgrades 5450 1639 594 297 297 8,277

General/Infrastructure 1,527 2,829 2,403 2,141 3,273 12,173

Total 8,758 5,804 4,333 6,000 3,570 28,465

As part of maintaining an effective operating plant, Zinkgruvan have allocated a sustaining

capital budget of US$28.46M between 2013 and 2017. The budget estimate is to an

accuracy of +/- 25% and is based on Zinkgruvan’s in-house experience.

A summary of the new investment budgeted between 2013 and 2017 is summarised in

Table 21.4.

Table 21.4: Summary of Planned New Capital Investments

Capital Cost, US$ ‘000

Item 2013 2014 2015 2016 2017 Total

Mill 13,333 31,111 6,222 0 0 50,667New TMF 148 296 2,963 5,926 3,407 12,741Increase Filtration Capacity 2,370 0 0 0 0 2,370Total 15,852 31,407 9,185 5,926 3,407 65,778

Zinkgruvan have completed a Pre-Feasibility Study to remove the crushing circuit, opting for

Fully Autogeneous Grinding (FAG) for both copper and zinc circuits. Consequently, it is

planned that:

The existing zinc FAG mill will be converted to process copper ore at a rate of

300ktpa; and

A new FAG mill will be purchased for the treatment of the zinc ore at a rate of

1,200ktpa.

The existing configuration of the copper and zinc flotation circuits will remain unaltered. It is

estimated in the pre-feasibility that a capital investment of some US$50.7M is required to

upgrade the mill circuits, remove the crusher circuit and install new ROM handling

equipment. Both the capital cost and payback period will be confirmed by the detailed

Feasibility Study that is currently underway.



Final V3.0 Page 146

A further US$2.37M has been estimated for the addition of a further filtration unit.

Zinkgruvan have estimated a capital expenditure of US$12.76M for the construction of a

new tailings facility. However it should be noted that no clear decision has been made with

regards to the location of the new tailings facility. The capital estimates are to an accuracy

of +/- 25% and are based on Zinkgruvan’s in-house experience.

21.4 Mining Capital Costs

The mining sustaining capital expenditures budgeted between 2013 and 2017 are

summarised in Table 21.6 below.

Table 21.6: Summary of Mine Sustaining Capital Plan from 2013 to 2017

ItemCapital Cost, US$ ‘000

2013 2014 2015 2016 2017 Total

Horizontal Development 16,418 16,369 16,298 15,676 12,723 77,484

Vertical Development 1,978 1,718 1,734 407 694 6,531

Mine Other 6,957 6,656 4,553 3,665 2,021 23,854

Infill Core Drilling 2,077 963 753 753 628 5,174

Total 27,430 25,706 23,339 20,502 16,066 113,043

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 US$113.04M is forecast to be spent

over the next 5 years.



Final V3.0 Page 147

22 ECONOMIC ANALYSIS

Producing issuers may exclude the information required under Item 22 for technical reportson properties currently in production unless the technical report includes a materialexpansion of current production.



Final V3.0 Page 148

23 ADJACENT PROPERTIES

The Zinkgruvan property is situated at the southernmost end of the Bergslagen mineralised

belt, which to the north hosts numerous iron ore and base metal deposits many of which

have seen production. At the present time, the only significant other production from the

belt is from the Garpenberg zinc-silver mine, operated by Boliden, which is located 175km

to the north (see Figure 23.1).



Final V3.0 Page 149

Figure 23.1: Location of Zinkgruvan within the Swedish Mining Districts



Final V3.0 Page 150

24 OTHER RELEVANT DATA AND INFORMATION

There is no other relevant data or information to report.



Final V3.0 Page 151

25 INTERPRETATION AND CONCLUSIONS

Zinkgruvan is a mature mining operation with well-established technical parameters in both

the mine and processing plant. The orebody geology and geometry are well understood, and

the mine has a longstanding, successful record of upgrading Mineral Resources and

converting Mineral Resources to Mineral Reserves through systematic underground

development, diamond drilling and mine planning.

The mine operates in a well-established fiscal and legal setting. Environmental issues are

clearly understood and have been managed in a professional manner. The local

infrastructure and workforce are both stable and predictable.

The Mineral Resource and Mineral Reserve estimation methodology is in accordance with

industry standards, and has been proven over time through the exploration and mining

cycle. Technical parameters used to convert Mineral Resources to Mineral Reserves are

based on years of experience and have proven to be appropriate. Mineral Resources and

Mineral Reserves are estimated in accordance with NI 43-101 requirements.

The metallurgical performance of the zinc-lead mineralisation is also well established and

consistent. There is little variation in run-of-mine ore over time and recoveries and

concentrate grades are stable and predictable.

Deep intersections of ore grade material at the same stratigraphic position as the main

Zinkgruvan ore horizon strongly suggest continuation to depth of the main ore zones in

three areas. The areas are Burkland below 1,500m, the western part of Nygruvan at depth

and the extension of the Mellanby/Cecilia zones. Based on past experience it is considered

likely that the Mineral Resources will continue to expand with additional exploration work.

Given the depth of likely new discoveries and extensions and that of the current

underground working, further exploration work will involve more underground

development and diamond drilling.

The initiation of copper production in 2010 at Zinkgruvan now offers the potential to

increase the overall production rate and provide diversification of metal production,

reducing the economic sensitivity of the mine to lead and zinc prices.



Final V3.0 Page 152

From an EHS perspective the mine is well organised and in general complies with best

practice. The site is compliant generally with its IPPC Licence conditions with the exception

of zinc in solution at the TMF and local night time noise levels. A new closure plan will be

produced shortly with revised costing. WAI considers that it is inevitable that these will be

higher than those of the current plan. The noise bund under construction should facilitate

compliance with night time noise limits.



Final V3.0 Page 153

26 RECOMMENDATIONS

WAI has the following recommendations:

Evaluate whether additional water treatment is required so that zinc

concentration in TMF return water can ever the mine’s IPPC Licence

standards; and

Include contractors in any forthcoming H&S training.



Final V3.0 Page 154

27 REFERENCES

Hedström, P., Simeonov, A., Malmström, L., 1989; The Zinkgruvan Deposit, South-Central

Sweden: A Proterozoic, Proximal Zn-Pb-Ag Deposit in Distal Volcanic Facies: Economic

Geology, v 84, pp 1235-1261.

Sädbom, S., 2002; Extern och intern analysering av geologiska prover samt kvalitetskontroll

vid analysering (External and internal assaying of geological samples and quality control at

assaying), Internal Report, ZMAB.

Sullivan, J., MacFarlane, R., Cheeseman, S., 2004; A Technical Review of The Zinkgruvan

Mine in South-Central Sweden, a report from Watts, Griffis and McQuart Limited to South

Atlantic Ventures Ltd.



Final V3.0 Page 155

DATE AND SIGNATURE

The effective date of this Technical Report, entitled “NI 43 101 Technical Report for

Zinkgruvan Mine, Central Sweden” is 18 January 2013.

Mark Owen

Date: 18 January 2013

Lewis Meyer




Final V3.0 Page 156

CERTIFICATE OF AUTHOR

I, Mark Lyndhurst Owen, BSc, MSc, MCSM, CGeol, EurGeol, FGS 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 Degree in Geology from Exeter University, Exeter,Devon, UK in 1980 and thereafter graduated with a Masters Degree in MiningGeology from Camborne School of Mines, Camborne, Cornwall UK in 1981;

I am a Fellow and Chartered Geologist of the Geological Society of London andEuropean Geologist;

I have practised my profession as a Mining Geologist for the past 31 years in areas ofgold and base metals evaluation in a number of countries around the world;

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 all of the items, “NI 43 101 Technical Report for ZinkgruvanMine, Central Sweden” dated 18 January 2013;

I visited the property discussed in the 2013 Report during November 2012 for aperiod of 3 days;

As of the date of this certificate and to the best of my knowledge, information andbelief, the 2013 Report contains all scientific and technical information that isrequired to be disclosed to make the 2013 Report not misleading;

I am independent of the Lundin Mining Corporation as described in section 2.1 of NI43-101; and

I have read the instrument NI-43-101 and the 2013 Report has been prepared incompliance with NI 43-101.


Name M L Owen BSc, MSc, MCSM, CGeol, FGS, EurGeol



Final V3.0 Page 157

CERTIFICATE OF AUTHOR

I, Lewis Meyer, ACSM, MCSM, BEng, MSc, PhD, CEng, FIMMM do hereby certify that:

I am an Associate Director of: Wardell Armstrong International Ltd Wheal Jane,Baldhu, Truro, TR3 6EH, United Kingdom;

I graduated with a Bachelor Degree in Mining Engineering from Camborne School ofMines, Camborne UK in 1991, Masters Degree in Rock Mechanics & FoundationEngineering form University of Newcastle Upon Tyne in 1995, and PhD inGeomechanics from the University of Exeter, UK in 2001;

I am a Fellow and Chartered Engineer of the Institute of Materials, Minerals andMining;

I have practised my profession as a Mining Engineering for the past 21 years in areasof gold and base metals evaluation in a number of countries around the world;

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 all of the items, “NI 43 101 Technical Report for ZinkgruvanMine, Central Sweden” dated 18 January 2013;

I visited the property discussed in the 2013 Report during November 2012 for aperiod of 3 days;

As of the date of this certificate and to the best of my knowledge, information andbelief, the 2013 Report contains all scientific and technical information that isrequired to be disclosed to make the 2013 Report not misleading;

I am independent of Lundin Mining Corporation as described in section 2.1 of NI 43-101; and

I have read the instrument NI-43-101 and the 2013 Report has been prepared incompliance with NI 43-101.


Name Lewis Meyer, ACSM, MCSM, BEng, MSc, PhD, CEng, FIMMM

ni 43-101 zinkgruvan final v3.0 - lundin mining · lundin mining ni 43-101 technical report for...

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