Lainejaur Project, Sweden

  • Inferred Mineral Resource of 460,000t @ 2.2% Ni, 0.15% Co and 0.7% Cu (above 0.5% Ni lower cut-off) at the 100% owned Lainejaur Project in Sweden
    • 68% increase in Ni grade and 63% increase in Co grade
    • 20% increase in contained Ni and 16% increase in contained Co
  • Mineralisation open to the north
  • Resource estimate grades indicate potential tenor of regional targets
  • Regional surface and downhole electromagnetic (‘EM’) surveys completed
    • Untested anomaly to south-east identified and interpreted as having a similar strength conductor to the Lainejaur massive sulphides

The Lainejaur Project is located at the north-west end of the renowned Skellefteå mineral belt and only 15km from the regional centre of Malå.  The deposit was discovered in 1941 and was bought into production to supply nickel for Sweden during the Second World War.  When it closed, the mine had produced some 101,000t of ore @ 2.21% Ni, 0.1% Co and 0.93% Cu to approximately 100m below surface.

Lainejaur Project Location

The Lainejaur mineralisation is hosted at the base of the lopolithic gabbro-diorite intrusion overlain by mafic intrusive with minor intercalated metasedimentary units and underlain by meta-basalts.   The host unit is interpreted to continue for approximately 1.5km down dip.  The mineralised horizon forms a distinct tabular shoot plunging at 38° to the north with a defined extent of 800m.  Sulphide mineralisation is defined by a basal layer of massive pyrrhotite, pentlandite and chalcopyrite, typically 1 – 3m thick, which are overlain by a variably mineralised zone of disseminated sulphides up to 11m thick.  Sulphides consist of pyrrhotite, pentlandite, gersdorffite and chalcopyrite.  Minor arsenical sulphides were also observed.  A third, less common, style of mineralisation is represented by nickel-copper-arsenic veins.

Updated Lainejaur 2018 Resource

The 2018 Mineral Resource is reported under JORC (2012) and is based upon a technical review undertaken by Berkut of the historical core, assays and logging.  The reported Inferred resource of 460Kt @ 2.2% Ni, 0.7% Cu and 0.15% Co (above a 0.5% Ni lower cut off) is shown in Table 1.  The previous historical estimate is shown in Table 2 for comparison.

Table 1 | Lainejaur Deposit January 2018 Inferred Mineral Resource Estimate (0.5% Ni cut off)

ZoneTonnes
Kt
Ni
%
Cu
%
Co
%
Au
ppm
Pt
ppm
Pd
ppm
S
%
Ni
t
Cu
T
Co
t
Massive Sulphide4602.20.70.150.650.200.6820.210,1003,000680
ID2 estimate using 0.5m composites and an insitu dry bulk density of 4.1t/m3for massive sulphide mineralisation

Table 2 | Superseded Historical 43-101 Inferred Mineral Resources Estimate 1

RegionTonnes
Kt
Ni
%
Cu
%
Co
%
All Material6451.330.660.09
1 previously reported 26 July 2017. Reported using a US$100 cut-off GMV per Tonne (= Ni% x US$176.37) + (Cu% x US$44.09) + (Co% x US$176.37). Density of 3.55t/m3 used.

The 2018 Mineral Resource estimation was undertaken by Payne Geological Services Pty Ltd (“PayneGeo”) of Perth in consultation with Berkut.  Included in the study was a site visit in November 2017, inspection of historic core samples and remodelling of the mineralised zones.

The 2018 Mineral Resource effectively separated the massive-sulphide (‘MS’) and disseminated/stringer (‘DS’) mineralisation at Lainejaur into separate discrete three-dimensional (3D) wireframes.  Additionally, an updated insitu dry bulk density was used for the MS based upon density test work undertaken by Berkut in 2017.  The tighter modelling has led to a 68% increase in Ni grade and 63% increase in the Co grade; for an overall 20% increase in contained Ni metal and a 16% increase in contained Co.  Berkut believes that the new model better reflects the massive sulphide nature of the mineralisation at Lainejaur.

Lainejaur Project Region showing resource region

Long section through Lainejaur

Mineralised Wireframe, LHS – massive sulphide; RHS – disseminated sulphide

Lainejaur Geophysical Surveys

In January 2018 Berkut finalised several ground electromagnetic (‘EM’) surveys at Lainejaur to both test the down-dip resource potential and to explore for conductive bodies in the region.  The work focussed on fixed loop EM and down-hole EM surveys around the Lainejaur deposit and further reconnaissance moving loop EM surveys over magnetic anomalies to the south and east of the deposit.

The reconnaissance program of five surface moving loop EM profiles was undertaken to target magnetic anomalies 1 to 2km to the south and east of Lainejaur.  The magnetic anomalies are interpreted to represent fold structures to the north and east of the known mineralisation and were targeted as a potential continuation of the host to mineralisation.   Profile E produced a positive EM anomaly with modelling suggesting a significant conductor at a depth of approximately 250m with similar conductance to the main Lainejaur massive sulphides.  Results from Profile D suggest a weakly conductive anomaly 550m north of the anomaly on Profile E.

The fixed loop EM and downhole EM surveys at the Lainejaur resource region were successfully completed utilising three open historical drill holes.  The fixed loop EM survey gave a weak indication of potential mineralisation continuing to the north of the deposit; however, both surveys were considered not effective and it is interpreted that the depth (>500m) to any down-dip conductor north of 7241550N is such that it will effectively be masked by the shallower up-dip response. The company will continue to investigate alternative geophysical methods to circumvent this issue.

Resource Outline and Survey Regions – over regional magnetics. Showing Resource drill collars (black dots) and resource outline (red dots)
Drilling

The resource drill holes at the Lainejaur project were all diamond holes completed by the previous operator Blackstone Minerals Inc in 2007 and 2008.  Within the Mineral Resource area, a total of 28 holes define the deposit, with most of the deposit drilled at hole spacings of 25m to 50m on 100m spaced cross sections.

Collar surveys from the Blackstone drilling programs were completed by contract or company surveyors using a Differential GPS system. Berkut has confirmed collar locations of 10 key holes either with hand held GPS or with differential GPS.

Down hole surveys were carried out on the majority of holes and were taken typically at 50m intervals. Either a Reflex tool or a Maxibor tool was utilised.

Sampling and Sub-Sampling Techniques

Samples in mineralised zones were always sampled to reflect geological contacts or sulphide zonation, so intervals are highly variable. In the massive sulphide zones, sample intervals are typically 0.4-0.6m in length. In the disseminated sulphides, intervals were typically 0.5m-1.0m in length.  Half core samples were taken using a diamond saw.

Sample Analysis Method

Samples were prepared and assayed at contract laboratories using peroxide fusion and ICP-AES (Ni, Co, Cu, S) and fire assay with ICP (Au, Pt, Pd) techniques. The Blackstone drilling included a QAQC protocol involving the use of certified standards and blanks for which the results are reported to be satisfactory. Berkut has completed qualitative checks of a number of intervals using a portable XRF instrument which were also satisfactory.

Estimation Methodology

The deposit was estimated using inverse distance squared (“ID2”) grade interpolation of 0.5m (MS) and 1.0m (DS) composited data within wireframes prepared using logged geology (MS) or 0.2% Ni (DS) envelopes. Interpolation parameters were based on the geometry of each zone. No high-grade cuts were applied.

The block dimensions used in the model were 25m EW by 25m NS by 10m vertical with sub-cells of 6.25m by 6.25m by 0.3125m.

Bulk density determinations from drill core were used to assign density to the model. Values used in the resource estimate were 4.1t/m3 for MS, 3.3t/m3 for DS and 3.0t/m3 for unmineralised gabbro host rocks.

Mineral Resource Classification

The entire deposit has been classified as Inferred Mineral Resource. Although continuity of geology and mineralisation appears to be excellent, the nominal 100m cross section spacing is not sufficient to confidently define grade trends within the deposit. At a 0.5% Ni cut-off, the entire massive sulphide domain is included in the reported Mineral Resource. No blocks in the disseminated domain are above 0.5% Ni.

The deposit appears to have potential for underground mining if sufficient tonnage can be confirmed to develop the project.

Cut-off Grades

The Mineral Resource has been reported at a 0.5% Ni cut-off based on assumptions about economic cut-off grades for underground mining.

At a 0.5% Ni cut-off, the entire massive sulphide domain is included in the reported Mineral Resource. No blocks in the disseminated domain are above 0.5% Ni.

Metallurgy

Metallurgical test-work was not undertaken by Berkut or previous operators at the project. Historic production has demonstrated that nickel recovery can be expected from conventional processing methods.

Modifying Factors

No modifying factors were applied to the reported Mineral Resource estimate.  Parameters reflecting mining dilution, ore loss and metallurgical recoveries will be considered at a more detailed stage of project evaluation.