Pampalo

The Pampalo deposit is located in the central part of the Karelian Gold Line, 5 km north of the village Hattuvaara. Outokumpu Mining has earlier carried out some test mining in the deposit, first in 1996 as an open pit and later in 1998-1999 in limited extent down to a depth of approximately 100 metres. The mined ore was transported 400 km to both Vammala and Pyhäsalmi for beneficiation. The mining totaled 114 372 t with the average gold content of 15,3 g/t. The produced amount of gold was 1 755 kg.

The mineralisation in Pampalo consists of three parallel auriferous lodes. They have been explored detailed with core drilling down to approximately 450 metres depth. Deep drilling indicates that the mineralization has continuity at least to 700 metres depth.

Figure. The Pampalo deposit with existing decline and decline extension. Source: Dragon Mining.

Figure. Deep drill holes in Pampalo indicate that the mineralisation continues below the estimated depth of 450 metres and at least to 700 metres below the ground surface. The section viewed from SW.

Figure. 3D image of Pampalo. The section viewed from NW. The gold mineralisations showed in different colours. Colors light blue and red = existing declines. Brown = open pit.

In addition to explore the extensions of the mineralisations in strike and dip directions, Endomines has planned to explore new zones in the surroundings. There are very favourable conditions to find further mineralisations in the east and northwest of the identified zones both near the surface and deep down. A fully equipped decline down to 362 metres is ready for mining, and ventilation is working properly through the existing ventilation raise.

Gold in the Pampalo Deposit exists mainly fine-grained (~0,03 mm in diameter) and is mostly found in separate grains together with silicate minerals and pyrite. Pyrite is the most common sulphide mineral. However, the pyrite content is low, 1-2 per cent in the auriferous zones. Other minerals that appear together with gold are scheelite, arsenopyrite, bismuthinite, and different tellurides.

Permits for Mining Operations

The Environmental Permit Authority of Eastern Finland in Kuopio has granted an environmental permit on 2008-02-21 for Pampalo mine. Permit is valid until further notice. The application for review of the permit should be submitted no later than after the third full year of operation.

The municipality of Ilomantsi has granted to Endomines building permits for beneficiation plant, office and personnel buildings at Pampalo mine. With the granted building permit Endomines has right to start the construction work at the mine site.

Exploration

There are three identified mineralised zones in Pampalo at the moment: the southern, the central and the northern mineralisations. The deposit comprises three main parallel lodes (South, Central and North). These shoots are plunging at approximately 40o to the north. The lodes are typically 5-8m. The resource estimates are based largely on underground diamond drilling. A small number of surface holes are also included to define the deeper portions of the deposit below the extent of the underground drilling. The spacing between the drill holes in the upper part is five metres in all directions.

Classification of Mineral Resources

An estimate of mineral resources in Pampalo deposit, carried out by an independent consult company Runge LtD in 2009, resulted 368 000 t with 6,1 g gold/t (72 000 oz) classified as measured mineral resources, 673 000 t with 4,7 g gold/t (101 000 oz) classified as indicated mineral resources as well as 306 000 t with 4,1 g gold/t (41 000 oz) classified as inferred mineral resources. The estimate was made with a cut-off grade 1,0 g gold/t.

The resource and reserve estimates comply with recommendations in the Australasian Code for Reporting of Mineral Resources and Ore Reserves prepared in 2004 by the Joint Ore Reserves Committee (JORC).

Figure. Plan View Resource Classification (Yellow=Measured, Green=Indicated, Red=Inferred).

Figure. The holes already drilled in Pampalo. 754 drill holes totalling 55 946 m drilling.

Figure. 3D image of the planned Pampalo mine. The existing decline marked with dark grey.

Beneficiation Tests and Metallurgy

Numerous beneficiation tests have been made both in laboratory and pilot scale. The test samples come from cores and test mining from the open pit and underground mine. Three bulk test campaigns have been carried out in 1996 and 1999 at Pyhäsalmi plant and 1998 in Vammala. Totally 114 372 t were beneficiated.

Figure. Pampalo mine portal.

The beneficiation tests aimed to optimise the gold recovery through a combination of gravimetry and flotation. The results vary in different tests and large-scale pilot runs. The best results indicate a recovery of more than 90 per cent. Cyanide leaching test indicates much better recovery. A combination of gravimetry and cyanide leaching can give a total gold recovery of 96-97 per cent.

Stoping Plan

The mining plan of Pampalo has been designed for cut-and-fill stoping with 14 metres stope height in the upper levels and 17-20 metres stope height in the lower levels. The lower stope height includes higher stoping costs per tonne ore but has lower costs considering the rock reinforcement. The stoping is aimed to begin from the deepest level to minimise the losses of ore in horizontal pillars.

Figure. The planned cut-and-fill stoping in Pampalo.

Pampalo Ore Reserves

Planned Future Works

So far all of the mineralisations are open to depth and along the strike. To increase the measured and indicated mineral resources and ore reserves Endomines aims to focus on the exploration to Pampalo deposit as well as to a few other most interesting deposits along the Karelian Gold Line. These include the deposit Rämepuro where mining licence is granted, the Hosko, Muurinsuo and Pampalo East deposits.

The interpretations of the earlier exploration results has been given interesting results to the continuing studies and for the possibilities to localise new auriferous zones. There should also be opportunities to increase the mineral resources in these bodies and by finding new deposits in relation to the gold potential structure and to transfer them also to the ore reserves in the future.

Endomines aims to be able to decide of the eventual mining operation of the deposit Pampalo during 2009 including that the planned beneficiation plant should be ready in 2010.

Figure. The planned infrastructure for mining operation in the deposit Pampalo. The mining is estimated to be in full production in 2010.

Figure. The plan of the beneficiation plant in Pampalo.