Kallak - Iron Ore
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.
Kallak is located within the Svecofennian shield, consisting of metamorphic, sedimentary and volcanic rocks that are commonly between 1900 and 1870 million years old. The area around Kallak is dominated by mafic to intermediate metavolcanics rocks, as well as gabbro, diorite, ultramafic rocks and their metamorphic equivalents. The iron deposits are outcropping and consist of quartz, banded magnetite haematite iron ore, comprised of fine grained magnetite and minor haematite, interlayered with quartz, feldspar and some hornblende. The dominant host rock is a grey altered volcanic unit.
The Kallak North and Kallak South orebodies are centrally located and cover an area approximately 3,700m in length and 350m in width, as defined by drilling. The mineralised structures at both Kallak North and Kallak South are almost vertically dipping, generally covered by shallow glacial overburden and, as such, are highly amenable to open pit mining. The mineral resource estimate for Kallak North and South is based on drilling conducted between 2010-2014, a total 27,895m was drilled, including 131 drill holes. The latest resource statement for the Kallak project was finalised on the 28 November 2014, following the guidelines of the JORC Code 2012 edition, summary as follows:
|Category||Tonnage Mt||Fe %||P %||S %|
While external observers were expecting higher maiden resource tonnages for Kallak South, it is worth pointing out that the 2014 drilling programme for Kallak South focused on defining the potential extent of the orebody. The geophysical magnetic signature of mineralisation, evidence of the presence of magnetite, extends through the gap giving confidence for an exploration target, but insufficient drilling precludes any additional resource classification.
In October 2017, Beowulf commissioned SRK Consulting (UK) Limited to undertake a Scoping Study to assess the potential scope and scale of a commercial mining operation at Kallak, which will be completed in February 2018.
Beowulf continues to engage with The Government of Sweden, the Mining Inspectorate of Sweden, the County Administrative Board for the County of Norrbotten, local stakeholders and the Sami reindeer herding communities regarding the award of an Exploitation Concession for Kallak North.
The Company will update the market regarding the Exploitation Concession when appropriate. Updates can be found in the ‘News’ section of this website.