Discovered in the 1940s, the Kallak magnetite iron ore deposit is located about 40km west of the Jokkmokk municipality centre in the County of Norrbotten in Northern Sweden. Kallak was designated, in February 2013, by the Swedish Geological Society as an Area of National Interest for minerals, affording it protection against competing land use and measures that may hinder future potential mineral extraction.

The latest resource statement published on the 28 November 2014 identified:

• A JORC indicated resource of 118.5Mt at 27.5% iron
• A JORC inferred resource of 33.8Mt at 26.2% iron
• An exploration target of 90-100Mt at 22-30% iron

A global resource of 250 million tonnes is achievable, if the current exploration target in the middle of Kallak South is drilled and converted. The exploration target represents potential ore, specifically in the gap between the northern and southern ends of Kallak South, and below the pit shells modelled for the resource statement. The Kallak North orebody remains open at depth and to the north.

Metallurgical test-work on Kallak North has produced a market leading ‘super’ high grade concentrate, containing over 71 % iron and a low percentage of deleterious elements. This higher grade and quality product lends itself to pelletisation, and consumption in Direct Reduction Iron facilities in Europe and the Middle East, at should attract a premium price.

The Kallak deposit has excellent local infrastructure with all-weather gravel roads passing through the project and forestry tracks allowing for easy access throughout the licence. A major hydroelectric power station, with associated electric power-lines, is located only a few kilometres to the south east. The nearest railway (the ‘Inland Railway Line’) passes approximately 40km to the east. The line is connected at Gällivare with the ‘Ore Railway Line’, which is used by Luossavaara-Kiirunavaara (“LKAB”) for delivery of its iron ore material to the Atlantic harbour at Narvik (Norway) or to the Botnian Sea harbour at Luleå (Sweden).

A September 2017 report by Copenhagen Economics titled ‘Kallak – A real asset, and a real opportunity to transform Jokkmokk’ highlighted the potential positive economic impact of the project on Jokkmokk, and Norrbotten County. Some key highlights:

• Kallak has the potential to create 250 direct jobs and over 300 indirect jobs in Jokkmokk, over the period that a mine is in operation.
• These jobs could be sustained over a period of 25 years or more.
• Kallak has the potential to generate SEK 1 billion in tax revenues, considering the case where 70 per cent of the mine’s workforce are based locally, with annual tax revenues of SEK 40 million over a 25 years mine life.
• These tax revenues would help to develop and sustain public services and infrastructure in Jokkmokk, which are at risk due to a lack of new investment and job creation in the community, a declining population, and an ageing population.

The study builds on the work carried out by the Company and others, including the 2015 independent socio-economic study initiated by Jokkmokks Kommun, completed by consultants Ramböll, and the 2010 study by the Economics Unit of Luleå University of Technology, ‘Mining Investment and Regional Development: A Scenario-based Assessment for Northern Sweden’.   The socio-economic study initiated by Jokkmokks Kommun concluded that a mining development at Kallak would create direct and indirect jobs, increase tax revenues and slow down population decline.  As well as revisiting the work done by Ramböll and LTU and reminding stakeholders of Kallak’s economic potential locally, regionally, and nationally, the study also details the Company’s philosophy on what needs to happen to ensure Kallak is a success, and Jokkmokk maximises the benefits it receives.