Exploration and Development of Ilmenite Deposits

17 000 tonnes ilmenite ore waiting for loading to test beneficiation.

Kalvinit runs the exploration work and evaluation of the ilmenite deposits in Kälviä area in Finland. Industrial mineral ilmenite is used in various branches, for example the ilmenite concentrate can be reworked to titanium oxide (TiO₂) which is used in many ways, e.g. as colour pigment in paint, toothpaste, and sun lotion.

Since 1997, Kalvinit Oy has engaged in exploration, development work and evaluation of ilmenite deposits in the Kälviä area East of Kokkola in central Österbotten. Since inception, the company performed two major test-mining trials at the Koivu and Kaire deposits, totalling 24,000 tons in co-operation with Sachtleben Pigments Oy. The mined material has been used for process tests and to ensure product quality. The parties have been engaged in extensive co-operation with respect to, aside from test deliveries, technical process development, market information and financial support.

Project History

A Finnish steel company Ruukki Oyj, previously Rautaruukki Oyj, found ilmenite mineralisations from the Kälviä area through magnetic airborne surveys in the beginning of 1970s. After a couple of years exploration work Ruukki, however, choose to close the project. In 1992 Geological Survey of Finland resumed the studies together with Kemira Pigments Oy, a subsidiary to the Finnish quoted industry group Kemira Oyj. The aim was to study the possibilities of replacing the imported ilmenite concentrate with domestic raw material.

In 1997 Ministry of Trade and Industry invited Kalvinit to study the conditions and develop the mineralisations, which Geological Survey of Finland had discovered, to a commercial project. After studying the conditions and taking the project further, Kalvinit acquired the claims protecting the deposits. Kalvinit has carried out a vast study programme in Kälviä area after that. The major part of these studies has been made in cooperation with Kemira Pigments and Outokumpu as well as with the consults like Micon International and Gridpoint Finland. In addition, Kvaerner International made the process design for the pre-feasibility study compiled in 2001.

Since 2002 Kalvinit has had Outotec Oyj as technical cooperative partner. Outotec has e.g. provided project competence in advanced process technology and mining, carried out studies and research around beneficiation tests as well as evaluated product prices and mineral resources. Outotec Oyj has examined the costs of processing of ilmenit to titanium slag and pig iron as a possible next step in the development of the project. The raw material for the smelter is pellets made of ilmenit concentrate. Outotec’s calculations shows that it could be possible to make slag with about 80% of TiO2 content. Also it seems that high quality chloride grade slag can be made. The results of this Informative Study are interesting but preliminary and uncertain. Therefore this will not lead to immediate action.

Kalvinit’s Deposits

Kalvinit’s ilmenite deposits are situated in Kälviä in Finnish Ostrobothnia. The Company has five deposits: Koivu, Kaire, Perä, Riutta, and Lyly.

Kalvinit’s ilmenite deposits are situated in western Finland, in Kälviä.

Deposit Koivu

Koivu is Kalvinit’s largest deposit. The infrastructure in the area is very functional, and the mineralisation is easily accessed. The nearest settlement is located around five km away from the deposit. The climate is relatively mild with the average temperature of 14-20°C in the summer and from -2°C to -11°C in the winter.

Exploration

Ruukki led the exploration of the deposit Koivu in 1971-1972, carried out geophysical surveys and drilled ten holes totalling 1 796 metres. Beneficiation tests were performed in Ruukki’s research unit as well as in Oulu University. All the tests showed positive results, but because of other priorities, the project was closed.

Geological Survey of Finland continued the exploration drilling 64 holes and 7 304 metres in 1992-1995. At that time also extensive geophysical surveys were made. The beneficiation tests in the laboratory scale showed that it is possible to produce commercial products with conventional beneficiation methods. In this study indicated mineral resources down to 150 metres totalled 44 million tonnes grading 7,5 % TiO₂.

Kalvinit continued the work after taking over the mineral rights in 1997 and carried out some further beneficiation experiments and metallurgical tests. A vast test mining work has been carried out in the deposit Koivu in two stages with 6 600 tons and 17 700 tons, respectively. In the year 2000 approx. 17 000 t were test beneficiated in VTT's (Technical Research Centre of Finland) pilot plant in Outokumpu. From this on an amount of approximately 2 500 t ilmenite concentrate, which was transported to the Company’s proposed main customers Kemira Pigments Oy (Finland) and Tinfos AS (Norway), was produced. Through these extensive test deliveries Kemira Pigments Oy could establish that the product was good and suitable for their production.

At the same time a pre-feasibility study was prepared for the mining project by Kvaerner International. The results of the study presented technical process description and cost estimation, both the process costs and investment costs with the accuracy of +/- 25%.

After that Kalvinit has carried out drilling in 2003 and 2005. In the deposit Koivu a total of 13 962 m have been drilled. The recognised deposits have been studied further and even new ones have been discovered. A pre-feasibility study conducted indicates that Kalvinit has sufficient tonnage for 15 years production.

Micon’s latest reserve estimate has been used as the basis to estimate the Net Present Value (NPV). The costs that Micon uses in the open pit optimisation, including mining, delivery, process costs, recovery, market value, general and administrational costs etc. have been used in the estimate. Geological Survey of Finland and Outokumpu Oy have verified the technical parametres and process recovery. The estimation of the capital costs in the pre-feasibility study went up to approx. 40 million EUR and gave a result with the Internal Rate of Return (IRR) of approx. 20 % and NPV of 26 million EUR. Kalvinit made the NPV estimate in 2005, and it showed that the ilmenite project with the given conditions is profitable. For further information see Micon International’s report: "KALVINIT ILMENITE PROJECT, FINLAND".

Mineral Resources and Ore Reserves

As an assignment for Kalvinit, the consulting company Micon International has carried out a reserve estimate according to the JORC code. This shows that the total mineral resources in the deposit Koivu go up to 62,2 million tonnes with 7,8 % TiO₂ and 4,8 % Fe₃O₄. 32,2 million tonnes of these with 7,8 % TiO₂ are classified as indicated mineral resources and 30,0 million tonnes with 6,7 % TiO₂ and 4,5 % Fe₃O₄ classified as inferred mineral resources. The estimations have been made with a 4,0 % TiO₂ cut-off. Micon has also made a preliminary ore estimation and mine optimisation based on limited information. The ore estimation which does not follow the JORC code resulted a ”probable ore reserve” of 14,6 million tonnes with approx. 8 % TiO₂.

Figure. View over the planned open pit in Koivu from above. The brown parts indicate the planned stripping of rock etc. around different ore lodes marked with blue, red, and yellow. Source: Micon International Limited.

Planned Future Works

Kalvinit plans carrying out certain drilling efforts as well as further metallurgical tests, focusing especially on recovering the side product magnetite. The next step is a detailed planning of the open pit and beneficiation plant in the limits of the final feasibility study. The mining licence for Koivu was applied in 2006. The work among the feasibility study is planned to begin in 2009.

Deposit Kaire

The ilmenite deposit Kaire lies five km southwest of the deposit Koivu. The deposit is approx. 400 m long and 50 m wide, and it belongs together with the other ilmenite-rich gabbros to the area shown in the magnetic and gravimetric maps. The deposit Kaire, hosted by till, consists of almost vertical, folded or faulted layer of heavily disseminated or massive ilmenite realisation.

Exploration

In 1999 Geological Survey of Finland carried out extensive magnetic, gravimetric, and electric surveys over the deposit. The noticed anomaly was studied in 2000-2001 with nine drill holes totalling 980 m. Already the first drill hole intersected 34 m of compact ilmenite-magnetite ore. Further drilling, totalling 3 424 m in 26 drill holes, and laboratory tests showed that the deposit Kaire was of the same quality as the deposit Koivu.

Mineral Resources and Ore Reserves

As an assignment for Kalvinit, Micon International has carried out an estimate of tonnage and grades according to the Australian JORC code. It shows that the deposit Kaire has mineral resources of total 6,5 million tonnes divided into 6,4 million tonnes indicated mineral resources with 10,0 % TiO₂ and 9,8 % magnetite as well as approx. 0,1 million tonnes inferred mineral resources with 7,3 % TiO₂ and 7,3 % magnetite with a 4 % cut-off. Micon International has also performed preliminary ore estimation and mine optimisation based on limited data. The ore estimation which does not follow the JORC code resulted ”probable ore reserves” of 5,8 million tonnes with approx. 9 % TiO₂./p>

View over the planned open pit in Kaire from above. The brown parts indicate the planned stripping of the rock etc. around different ore lodes marked with blue, red and yellow. Source: Micon International Limited.

Planned Future Works

Further beneficiation tests are being planned. These will be focused on the possibilities of recovering magnetite as side product. When the results from these tests are available, all the information will be compiled and a completed feasibility study (including both Koivu and Kaire deposits) will be done. This is planned to happen in the latter part of 2010.

Deposit Perä

The ilmenite deposit Perä is situated approx. 2 km southwest of the deposit Koivu and belongs to the same intrusion. The deposit is mainly vertical and consists of three different mineralised units of the Perä gabbro. The lengths vary from 200 to 400 m with both massive and disseminated layers.

Geological Survey of Finland operated in the area 1997-2000 and has, together with Kalvinit, drilled 4 043 m divided into 43 drill holes. The purpose of the gravimetric and magnetic surveys is to create a basis for placing the drill holes. The laboratory tests indicate that the ilmenite mineralisation in Perä can be beneficiated just like the other deposits in the area Kälviä.

Mineral Resources

As an assignment for Kalvinit, Outokumpu has carried out an ore estimate of the deposit Perä. The mineral resources are in the category inferred according to the JORC code.

3D image of the Perä mineralisation.

Planned Future Works

Extensive core drilling programme and geological interpretation work remain to be done before the deposit Perä can be considered completely studied. Because of practical reasons concerning the eventual future mining, the deposit has been included in the application of the mining license.

Deposit Riutta

The mineralisation Riutta is part of the Koivu intrusion and the least-known ilmenite deposit in Kälviä area. So far the formation Riutta’s stratigraphical position has stayed unclear as there are two separate zones of mineralised ilmenite in the area. In comparison to most of the other ilmenite deposits in the area Kälviä, the deposit Riutta has differing mineralogy as the eastern mineralisation is rich of industrial mineral apatite found in separate, approx. 0,1 mm size, oval grains.

Apatite is, based on microscope studies and beneficiation tests, estimated to be relatively uncomplicated to beneficiate. Apatite’s quality is very good, it does not contain any cadmium, and because of that it is estimated to be able to give a significant economic addition to the eventual future mining. Kalvinit discovered the deposit in 2003 as a result of detailed land geophysical survey and followed drilling. So far only six holes, 952 m, have been drilled in the area.

Mineral Resources

As an assignment for Kalvinit, Outokumpu has carried out a tonnage estimate based on geological studies and drilling results. This estimate, following the JORC code, indicates that the deposit Riutta has inferred ilmenite resources totalling 805 000 t with an 8,8 % TiO₂ and a 6,0 % TiO₂ cut-off.

3D image of the mineralisation Riutta.

Planned Future Works

Extensive drilling and geological interpretation work are being planned for the Riutta area. The deposit was discovered recently, and there no systematic core drilling has been carried out yet. Besides the deposits Koivu and Kaire, Riutta is highly prioritised because of it possibilities of being a significant resource for apatite.

Deposit Lyly

The ilmenite deposit Lyly is situated in the ilmenite gabbro northeast of the deposit Koivu and belongs to the same intrusion as the aforementioned. The deposit has a form of vertical layer consisting of disseminated and massive magnetite-ilmenite bodies. The formation is approx. 3 km long and 2-20 m wide. The deposit resembles Riutta and has a significant apatite content, too. Magnetite and ilmenite appear in separate mineral grains, and beneficiation with reliable methods should not be complicated. The deposit Lyly was identified during the studies in the deposit Koivu. Geological Survey of Finland started the work in the area in 1994. Until 1997, when Geological Survey left the area, 17 holes had been drilled totalling 1 771 m.

Mineral Resources

Geological Survey of Finland has carried out a traditional tonnage estimate based on cross profiles. The estimated tonnage, which went up to 1 752 000 t with 15,5 % TiO₂ and 12,4 % magnetite, is classified as historical mineral resource.