Nordic Gold Corp. [NOR-TSXV] has kickstarted Europe’s newest gold mine. The company said Monday December 3 that it has completed the first gold pour at its 100%-owned Laiva Mine near Raahe, Finland. A total of 1,234 ounces was poured, the company said in a press release.
Nordic shares advanced on the news, rising 5% to 10.5 cents. The stock is trading in a 52-week range of 17 cents and $0.065.
Monday’s announcement comes just one year after Nordic acquired the Laiva Mine for approximately $25 million in cash. Since then, the company has completed an updated NI 43-101 resource calculation, completed a preliminary economic assessment, recruited an experienced management team to operate the mine, and secured all the necessary permitting approvals.
Laiva is a conventional open pit mine with two pits. According to a preliminary economic assessment announced in July 2018, Nordic is forecasting life of mine production of 456,600 ounces of gold over a six-year mine life.
The forecast is based on a measured and indicated resource of 335,000 tonnes at 1.132 g/t gold as well as an indicated resource of 3.4 million tonnes at 1.248 g/t gold. On top of that is an inferred resource of over 9 million tonnes, grading 1.531 g/t gold.
That material is expected to support average annual gold production of 75,981 ounces at an all-in-sustaining cost of US$974/oz. The PEA pegged the pre-production capital expenditure at $7.1 million.
When Nordic Gold (previously Firesteel Resources Inc.) bought the mine, it was granted 131 million Euros worth of tax loss provisions, which the company said may be used to offset future taxes should taxable income be earned in Finland prior to the expiration of the tax loss carry forwards. The tax loss provisions expire between 2020 and 2028.
Nordic said the recognition of the tax loss carry forwards have a material impact on the economic assessment of the Laiva Mine and are contingent upon the company achieving taxable net income under Finnish tax laws.
“The first gold pour is a critical, but vital step in returning Laiva to commercial production,” said Nordic President and CEO Michael Hepworth. “The last 18 months have been focused on using past production data and learning from this information,” he said. “Many fixes have been implemented and as we move towards commercial production, further improvements will be implemented to ensure appropriate economics and efficiencies.”
Hepworth went on to say in the press release that the team at the mine has done an outstanding job of getting back to production in an incredibly short time frame. “From a care and maintenance to production in around 11 months is something everyone can be very proud of,” he said.
Under an amended agreement announced on September 6, 2018, PFL Raahe Holdings LP, was granted a 2.5% net smelter return royalty on gold production from the Laiva Mine. PFL was also set to receive 36.5 million shares of Nordic, amounting to a 19.9% stake in the gold producer.
New York-based Pandion Mine Finance, LP is the general partner of PFL Raahe Holdings LP and is a mining-focused investment firm backed by MKS PAMP Group and Ospraie Management, LLC.
PFL recently agreed to provide Nordic with US$7 million to enable the company so put Laiva into production. That is in addition to US$20.6 million provided by PFL in December, 2017.