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and flotation gold concentrates which are sold to smelters. As a result of the acquisition of Björkdal, Mandalay expects that it will derive the bulk of its revenues from gold (together with co-product gold production from Costerfield and by-product gold production from Cerro Bayo). Björkdal offers abundant opportunities for optimising both open pit and underground mining, improving processing recoveries, and increasing Mineral Resources, Mineral Reserves, and mine life.
Location and Permitting:
The Björkdal Mine is located in northern Sweden, 28 km northwest of the town of Skelleftea, near the Boliden mining district which has been mined for a century. There is excellent infrastructure in place, including low-cost hydropower via the grid, paved roads, an experienced labour force and readily accessible technical support. Mining is accepted as a socially responsible and necessary contributor to the local economy. There are no governmental or private royalties on the property.
The Björkdal Mine consists of six mining concessions and 15 exploration permits, totalling 12,950 hectares. The Björkdal Mine is fully permitted for current operations and in the ordinary course of business it operates seven days a week all year round.
The Björkdal deposit was originally discovered through examination of anomalous gold values in till samples in 1983 by Terra Mining AB. Terra commenced open pit mining operations in July, 1988. Open pit mining continued through 1999 under Terra and its successor William Resources, until closure due to low gold price. The open pit mine was reopened in 2001 under new ownership (International Gold Exploration), and continued operation under a succession of owners, Minmet, Gold-Ore, and Elgin. Gold-Ore added the underground mine to the operation, and Elgin continued both the open pit and underground mining.
Over 1.0 million ounces of gold have been produced from Björkdal since 1988.
The Björkdal deposit is located in the prolific Skelleftea mining district, a Paleoproterozoic greenstone belt primarily known for volcanogenic massive sulphide deposits containing high gold values.
Mineralization at Björkdal is typified by Au-quartz hosted veins located within the metamorphic package. These veins are vertical to sub-vertical and strike between 040° and 055°. The quartz veins vary between a few centimetres to over two metres in width. The veining is locally complex, with many cross-cutting thin veinlets.
Au-rich quartz veins are nearly everywhere associated with minor quantities of sulphide minerals such as pyrite, pyrrhotite, marcasite, and chalcopyrite more common non-sulphide minerals such as tourmaline and biotite. Scheelite and bismuth-telluride alloys (i.e., tsumoite) are also commonly found within the Au-rich quartz veins and are both excellent indicators of Au mineralization.
Au morphology is dominantly free or native. Au is also associated with bismuth-telluride, electrum, and pyroxenes. Ag is a minor by-product. Very little is known about its deportment within the deposit, although it is assumed to be associated with the Au in electrum.
In 2014 Mandalay retained a major third party consulting group to estimate the first independent resources and reserves in many years. Please click here to see the independent technical report, filed January 27, 2017 on www.sedar.com.
Mining & Production:
The Björkdal Mine currently produces mill feed from the open pit and from the underground mine, as well as from a stockpile of low grade material accumulated over the past quarter century. About 60% of the mill feed is generated by the underground operation and 40% from the open pit. Underground mining is accomplished by long hole stoping using an owner-operated mobile fleet. Access is by dual ramps from the open pit. Open pit mining is accomplished by a contractor. The plant includes multiple crushers, a ball mill and rod mill, a gravity circuit, and a flotation circuit. Four separate gravity and flotation gold concentrates are produced and sold to smelters in Sweden and Germany. Please click here for production and sales statistics.
Björkdal Optimisation and Growth Projects:
Mandalay acquired Björkdal due to the abundant improvement projects evident at the operation, for which capital and expertise was limited under the ownership of Elgin. These include:
- The mine is one of the classic type-locations of high nugget-effect gold deposits studied by geostatisticians in the 1980’s and 1990’s. Over the generations of different junior company ownership, the difficulties of dealing properly with the nugget effect obscured the benefits of best practice orebody mapping, drilling, sampling and modelling. Mandalay will reassert best practice, which is expected to reduce total exploration cost by accelerating wide-spaced and infill drilling while reducing the previous practice of expensive exploration by large-scale drifting across and on veins.
- The more refined resource model Mandalay intends on producing will support more selective underground (and perhaps open pit) mining techniques. The goal is to increase the delivered grades from the mine to the mill so that more gold will be produced from the current capacities. Thus, even if the cost per tonne mined and processed increases slightly in the face of greater selectivity, the cost per ounce is expected to decrease.
- Historical experience and preliminary testing suggests that a variety of “sorting” technologies will work to increase the grade of mined material to the plant. At the time of acquisition, Elgin was testing the practice of rejecting resistant coarse fragments from the ball mill discharge to make more room for increased feed of high grade primary mineralized material. The gold is largely in white quartz veins, which should be able to be optically sorted from the black host rock. As well, initial Mandalay testing has shown that X-ray sorting has the potential of preferentially rejecting crushed material fragments that contain no radio-opaque minerals.
- Mandalay’s strategy is to increase the grade of mill feed through a combination of more selective mining and sorting technologies. This will allow the production of more gold at reduced cost per ounce from the same, largely fixed-cost operation, without the need for a plant expansion.
- Optimisation of the grade of mill feed is expected to allow recovery improvements due to the finer grinding and greater retention time that become possible with reduced tonnage throughput.
- Exploration has been underfunded at Björkdal for many years. As soon as the geologic mapping, logging, sampling, and analytic practices have been upgraded to support a high-quality gold exploration model, Mandalay intends to increase the rate of drilling to infill currently defined Inferred Resources and extend mineralization along strike and down dip.
Chris Gregory, General Manager of Australasian Business Development for Mandalay Resources, is a Member of the Australian Institute of Geoscientists accredited Chartered Professional (Mining) and a Qualified Person as defined by NI 43-101. He has reviewed and approved the technical and scientific information on Björkdal contained on this website. Neither Mr. Gregory nor any other qualified person has done sufficient work to classify the historical estimate as a current mineral estimate. Mandalay is not treating the historical estimate as a current mineral estimate and the historical estimate should not be relied upon.