VULCAN RESOURCES LIMITED - ASX: VCN

The data on Australian Shares.com is intended as a guide only and is compiled from information in the public domain. Data on this website should not be used to make an investment or trading decision.

Description

Vulcan Resources Limited holds base metals development and exploration projects in Finland and has significant cash resources. It is actively seeking opportunities to complement its Finnish projects.

The Company’s principal asset is the 100% owned Kylylahti copper-cobalt project located in eastern Finland which has a Resource of 8.1 million tonnes grading 1.18% copper, 0.24% cobalt, 0.22% nickel, 0.47% zinc and 0.66 g/t gold.

A definitive feasibility study for Kylylahti was completed in 2008 envisaging a mine producing 800,000 tonnes per annum to produce an average 9,000 tonnes per annum (18 million pounds) of copper, 12,000 ounces of gold in copper concentrates, 1,900 tonnes per annum (4.2 million pounds) of cobalt, 1,400 tonnes per annum (3.1 million pounds) of nickel and 3,800 tonnes of zinc (8.4 million pounds) in bulk concentrates.The project is fully permitted but was placed in care and maintenance in October 2008 due to poor metal prices and financial markets.

Vulcan is also a successful nickel explorer at its 95% owned Kuhmo Nickel Project where there is a Resource containing 30,000 tonnes of nickel metal.

Kylylahti

The mine, concentrator and associated facilities will be located near the town of Polvijärvi in Eastern Finland, some 20 kilometres from the town of Outokumpu. Polvijärvi is some 400 kilometres north-east of the capital Helsinki and is accessible via a 40 minute flight to nearby Joensuu. Infrastructure and labour supply in the area are excellent.

A definitive feasibility study on the 100% owned Kylylahti Copper Project was completed in April 2008. The Definitive Feasibility Study was managed by SNC-Lavalin Australia Pty Ltd and was subject to review and optimisation prior to release.

The proposed surface infrastructure and orebody lie within a granted mining lease. A number of claims are also held for exploration potential. The mining lease to the north of Kylylahti which holds the shallow extension is held by Mondo Minerals and Vulcan has acquired the base metal rights within this lease.

Kuhmo

The Kuhmo Nickel Joint Venture (“Kuhmo Project”) contains a number of Archean komatiite-hosted nickel sulphide deposits and a large number of highly prospective exploration targets within the Karelian Craton of eastern Finland. The Kuhmo Project is 95% owned by Vulcan Resources Limited (“Vulcan”) and is a joint venture with Polar Mining Oy (“Polar”). The project has approximately 50 square kilometres of strategic landholding that extends between the regional centres of Kuusamo in the north and Kuhmo in the south.

The Karelian Craton is a typical Archean granite-greenstone terrain with greenstone belts comprised of ultramafic, mafic and felsic volcanic rocks and minor sedimentary rocks. The ultramafic rocks host massive and disseminated nickel sulphide mineralisation similar to well endowed Archean greenstones in Australian and Canada.

The area has undergone sporadic exploration by Outokumpu and by The Geological Survey of Finland (“GTK”) since initial discoveries of outcropping massive sulphide mineralisation were made in the 1960’s, with no mining to date. Vulcan is the first company to bring together a large ground holding, a single corporate focus and modern nickel exploration and development expertise.

Comparison of the Kuhmo Project with other known komatiite terrains that are highly endowed in nickel mineralisation highlights that these better explored terrains typically host clusters of deposits that are the basis for mining, and within which new deposits have been discovered over time. This clustered nature is characteristic of komatiite hosted nickel sulphide deposits, suggesting that the deposits discovered to date in Finland are a compelling indicator of the high potential for discovery of further mineralisation.

Haukiaho

The Haukiaho property is located near Posio in northern Finland and is related to the Koillismaa Layered Igneous Complex (KLIC), which is one of the numerous mafic layered intrusions emplaced in the Fennoscandian Shield some 2.4-2.5 Ga ago. The igneous stratigraphy of the KLIC is generally divided into some 50–250 metre thick marginal series hosting very extensive but generally low-grade nickel-copper-platinum group elements-gold mineralisation and up to 3,000 metre thick layered series. The lower and middle portions of the layered series are composed mainly of norites and gabbronorites and the upper portion comprises leucogabbros, anorthosites and vanadium-enriched magnetite gabbros, which can reach up to 200 metres in thickness (Figure 1). The Syöte and Porttivaara vanadium projects of Vulcan as well as the past Mustavaara vanadium mine, which is located only some 5 kilometres south-east of the Haukiaho mineralisation, are related to the magnetite gabbro horizons.

The marginal series related nickel-copper-platinum group elements mineralisation in the Haukiaho area was initially mapped and drilled (16 holes) by Outokumpu in 1960’s. From early 1980’s till early 1990’s Outokumpu explored the marginal series for platinum group elements by completing detailed geological mapping, sampling and ground geophysical surveys. The GTK carried out an extensive exploration programme including also diamond drilling during 1998-1999. North Atlantic Natural Resources (NAN) acquired GTK’s properties in 2000 and continued exploration activities till 2002. The work comprised ground geophysics, low-altitude airborne geophysical survey contracted by Fugro Ltd and diamond drilling. Also a metallurgical flotation test by Lakefield Research Ltd of Canada was completed for NAN. The work by the GTK and NAN resulted in the delineation of the Haukiaho nickel-copper-platinum group elements-gold mineralisation related to the marginal series of the Kuusijärvi block. Follow-up resource drilling on the property was conducted by the GTK still in 2004 (Figure 2).

The Haukiaho mineralisation is hosted mainly by pyroxenitic and gabbroic cumulates of the marginal series. Mineralisation is steeply dipping to north-north-east and is generally 15-40 metres thick. Continuations along strike and dip are very extensive and consistent. The mineralisation occurs as disseminated sulphides and only very few narrow massive sulphide veins have been encountered. Pyrrhotite, pentlandite, chalcopyrite, and also pyrite in lesser amount, are the main sulphide minerals.

Best drill results are:

* R404 16.0 m interval from 58.40 m @ 0.20% Cu, 0.15% Ni, 0.34 g/t Pt, 0.95 g/t Pd
* R404 12.0 m interval from 129.00 m at 0.25% Cu, 0.18% Ni, 0.28 g/t Pt, 0.93 g/t Pd

The average metals concentrations and ratios for the Haukiaho mineralisation are 0.24% nickel, 0.36% copper, 0.97g/t 2PGE+Au, Pd:Pt = 2.64 and Pt:Au = 1.38. The figures are based on 116 drill core samples, which returned more than 0.7 g/t Pt+Pd+Au.

A scoping flotation test by Lakefield was done from a 50 kilogram sample collected from large mineralised boulders on the Haukiaho property. The feed grade was 0.25% nickel, 0.37% copper, 0.57 g/t palladium, 0.23 g/t platinum and 0.31 g/t gold. The best result of the test series returned 64% nickel and 89% copper recoveries into a concentrate grading 5.0% nickel and 9.7% copper. The lower total nickel recovery was a result of the presence of non-sulphide nickel, which will not be recovered by flotation. Precious metals recoveries were 80.1% for platinum, 79.8% for palladium and 65% for gold.

No JORC compliant resource estimate is available on the Haukiaho property. The GTK assessed the potential for an open pittable resource by modelling the Haukiaho mineralisation as a tabular sheet with a 20 metre average thickness, 3,000 metre strike length and 150 metre vertical depth along the dip. Total tonnage of this model was 27 Mt when specific gravity of 3.00 was applied. Grade estimate of 0.24% nickel, 0.36% copper, 0.21 g/t platinum, 0.55 g/t palladium and 0.22 g/t gold was made using a 0.7 g/t Pt+Pd+Au cut-off value.

Mine For

nickel, copper, cobalt, gold, zinc

Location of operation(s)

Finland

Address

Ground Floor , 1 Altona Street
WEST PERTH, WA, AUSTRALIA

Phone

(08) 9485 2929

Email

Website

http://www.vulcanresources.com.au/

Last Updated

17/02/2010