Name and Location
Kaunisvaara iron-ore project, Sweden.

Client
Northland Resources.

Project Description
The Kaunisvaara project comprises two iron-ore deposits – Tapuli and Sahavaara – located about 100 km north of the Arctic Circle, in the municipality of Pajala, near the village of Kaunisvaara, in northern Sweden.

The Kaunisvaara project is a late-stage exploration project, which, when built, will comprise two conventional openpit mines and a magnetite processing operation, producing a concentrate product.

Northland plans to produce 1.4-million dry tonnes of high-grade (69%) iron-ore concentrate with low impurities, such as alumina and silica, in 2013 and three-million dry tonnes in 2014. The company expects to reach the production capacity of four-million dry tonnes a year in the beginning of the third quarter of 2014.

The logistics of the project include trucking the ore from Kaunisvaara to Sahavaara (150 km), with the expected truck size being 105 t; transloading the ore from truck to rail in Sahavaara; railing the ore using 100 t rail cars on the existing rail line between Sahavaara and Narvik (226 km); and a new terminal and berth in Narvik port, with the capacity to load Capesize vessels.

Associated project infrastructure further includes access, service and dumper roads, a wastewater treatment plant, two process plant buildings, two stockpile buildings, an administration building, workshops and truck bays, a stores building, a metallurgical laboratory, a plant services building, two pumpstation buildings and an assay laboratory.

Value
$765-million.

Duration
The construction of the project is well under way. The process plant produced its first concentrate in December 2012.

Latest Developments
The first Kaunisvaara process line is in hot commissioning/production.

Full design capacity from the first processing line is expected to be reached during the fourth quarter of 2013. The second process line is expected to be completed and operational at the end of the third quarter of 2014.

Civil works at the Sahavaara stockpile, the water purification building and the Sahavaara conveyor foundations have restarted.

The third vertical grind mill has been installed and is operational.

Northland is currently producing between 4 000 t/d and 6 000 t/d of iron-ore concentrate.

During the ongoing commissioning, the quality of the iron-ore concentrate produced meets the specification achieved during the test works and the project study, with the exception of moisture level, which has been higher than the targeted 6%.

Northland has indicated that limited access to the thickener in the process plant could lead to a production shortfall of between 15 000 t/m and 20 000 t/m during November and December this year. However, actions have been taken to solve this.
Five CAT 793 haul trucks, two CAT 994 wheel loaders, one CAT 6060 hydraulic shovel, seven drill rigs – two CAT 980, two CAT D10, two Atlas Copco D65, and one Atlas Copco PV-271 – are currently in production at the mine.

Atlas Copco has delivered the second of the three PV-271 drill rigs, and Pon Cat has delivered the second CAT 6060 hydraulic shovel, which will be operational during the fourth quarter of 2013. During the fourth quarter of 2013, two additional haul trucks will be delivered, securing the required capacity for the planned production output.

Northland also expects to complete the installment of the shiploader and the unloading facilities at the Port of Narvik during the fourth quarter of 2013.

Key Contracts and Suppliers
SRK Consulting (feasibility study); Peab (civil works for industrial area); Vattenfall (main power supply); Atlas Copco (five drill rigs); Kiruna Wagon (rail car); FineWeld Group (supply of water systems); Grieg Logistics and Savage Services Corporation (manage and develop the logistics solution); Pöyry Sweden (management support to lead the engineering and construction phase); Metso (mineral processing equipment); PON Equipment (Caterpillar mobile mining equipment and maintenance and repair of equipment); Vattenfall Eldistribution (overhead powerlines); Forcit Sweden (explosives, accessories and services); Fineweld Sverige (engineering and design of all pumpstations and related civil works); Peab Sverige (civil works, removal of overburden and construction of port facilities terminal); Sandvik Mining and Construction Norge (shiploaders); Kiruna Wagon (wagon manufacturing contract); Green Cargo (operation and management of rail operations); Grieg Logistics (operation and management of port operations); Northland Logistics (operating and management agreement for Kaunisvaara logistics); and Swerock (materials handling and transportation services).

On Budget and on Time?
The project is on track for production in 2012 and within budget.

Contact Details for Project Information
Northland Resources VP investor relations Anderson Antonnesson, tel +46 709 994 970 or email aantonnesson@northland.eu.
Peab, tel+46 431 890 00 or fax +46 431 45 17 00.
Vattenfall, tel +46 8 739 50 00 or fax +46 8 17 85 06.
Atlas Copco (Sweden), tel +46 8 743 92 30, fax +46 8 743 92 46 or
email mcsinfo@atlascopco.com.
FineWeld Group, tel +358 6 8234800 or fax +358 6 8234820.
Grieg Logistics, tel +47 55 57 66 00 or fax +47 85 02 84 67.
Savage Services Corporation, tel +1 801 944-6600 or email info@savageservices.com.
Pöyry Sweden, tel +358 10 3311 or fax +358 10 33 21818.
SRK Consulting, tel +1 604 681 4196,
fax +1 604 687 5532 or email info@srk.com.
Metso, tel +358 20 484 100 or fax +358 20 484 101.
PON Equipment, tel +46 31 69 65 00.
Vattenfall Eldistribution, tel +46 771 82 00 00.
Forcit Sweden, tel +46 587 10999.
Fineweld Sverige, tel +358 44 259 23 44 or email ville.klaavu@fineweld.fi.
Peab Sverige, tel +46 431 890 00 or fax +46 431 45 15 08.
Sandvik Mining, tel +46 260000 or email info.mining@sandvik.com.
Construction Norge, tel +358 20 59 11 or fax +358 20 59 29088.
Kiruna Wagon, tel +46 72 206 49 15.
Green Cargo, tel +46 10 455 71 11, fax +46 10 455 71 13 or email info@greencargo.com.
Northland Logistics, tel +1 416 423 3191 or fax +1 416 423 2350.
Swerock, tel +46 431 280 70.