Vulcan fires up in Finland

WHEN miner Outokumpu pulled out of operations in its Finnish homeland, two Western Australian companies saw an opportunity to go against what had become almost one-way traffic of European involvement in WA’s mining industry. Vulcan Resources is now on the verge of announcing results from a pre-feasibility study into its Kylylahti copper, gold and base metal deposit in south-eastern Finland. In October last year Vulcan purchased Kylylahti from another West-Perth based company, Dragon Mining, which became Vulcan’s largest shareholder as part of the deal. Dragon had earlier bought the deposit from Outokumpu, which discovered the deposit in 1984 and has since divested itself of mining assets, in order to focus on its stainless steel business. According to Vulcan chairman Alistair Cowden, about $8 million has been spent on exploration at Kylylahti, about 400 kilometres from Helsinki, since its discovery. Dr Cowden said the company expected to make results of its pre-feasibility study for the project known to the market in August. If all goes well at the project, underground mining on a 500,000 tonne per annum mine should commence at Kylylahti in 2007, with first production expected by 2008. Finland has had a rich history of mining in WA, with Outokumpu, one of the nation’s best-known miners, having a large involvement with the Silver Swan nickel operation near Kalgoorlie until 2000. Dragon also has its own interests in Finland, recognised by the World Economic Forum as the most competitive economy in the world for 2004-05. The company is seeking to commence production from its Vammala gold plant, located in western Finland for the fourth quarter of 2005 with ore to be supplied initially from the nearby Orivesi mine. A decision on the start of production from Vammala will be made during the third quarter, according to Dragon. But while Dr Cowden is pleased for a WA miner to be mining Finnish land for a change, Vulcan has recruited the services of former Outokumpu staff, who have had a great deal of experience in the area. In addition, Vulcan has had access to Outokumpu’s vast exploration database for the project, which was almost developed once in the 1980s and then in the mid 1990s, but was abandoned due to low commodity prices. Another advantage the local company has encountered in Finland has been its proximity to substantial infrastructure, according to Dr Cowden. “Costs in Finland are substantially lower than in WA,” he said. There is also a very tight-knit mining community in the country keen to rekindle the industry, Dr Cowden said. “It’s very much the ex-Outo club,” he said.

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