Scandinavian Minerals Limited
TSX : SGL

Scandinavian Minerals Limited

October 19, 2005 13:35 ET

Scandinavian Gold Announces Private Placement of up to $2.85 Million

TORONTO, ONTARIO--(CCNMatthews - Oct. 19, 2005) - Scandinavian Gold Limited (TSX:SGL) today announced that it has entered into an agreement with Clubb Capital Ltd. in connection with which it has agreed to offer for sale by way of private placement of up to 1.5 million common shares at a price of $1.90 per share. Clubb Capital Ltd. will act as agent for up to 1.3 million of the shares in the private placement and, in connection therewith, will receive cash commissions equal to 7% of the gross proceeds of such portion of the offering which commissions may be payable on closing at Clubb's option in any combination of cash or common shares at a deemed price of $1.90 per share. Clubb Capital will also receive broker warrants entitling it to acquire such number of common shares equal to 7% of the shares sold in connection with the portion of the offering for which it acted as agent. The broker warrants will be exercisable at a price of $1.90 per share for a period of 18 months from closing. The transaction is subject to Toronto Stock Exchange approval.

The proceeds will be used to fund further development of the Company's 100%-owned Keivitsa, Finland, nickel-copper-PGE property and for general corporate purposes.

A pre-feasibility study for Keivitsa is currently being undertaken by St Barbara Consultancy Services of London, U.K., in conjunction with the Geological Survey of Finland (see press release dated October 3, 2005). The study will be based on open-pit mining of up to 4 million tons of ore per year, with production of separate nickel and copper concentrates for sale to smelters. The Study is scheduled for completion in February, 2006.

Keivitsa is situated in Finland, a country which offers long-established political and economic stability. The Keivitsa deposit is easily accessible by road. Water and hydroelectric power are available nearby.

Keivitsa is one of the world's major undeveloped sulphide nickel deposits and one of the largest mineral discoveries in Finland's history. It hosts a probable reserve of 120 million tonnes grading 0.21% nickel, 0.3% copper, 0.012% cobalt and 0.52 grams/tonne PGE + gold, amounting to 252,000 tonnes contained nickel and 360,000 tonnes contained copper. The probable reserve is contained within an indicated resource of 150 million tonnes 0.18% nickel, 0.27% copper, 0.011% cobalt and 0.47 grams/tonne PGE + gold and an inferred resource of 315 million tonnes 0.18% nickel, 0.29% copper, 0.012% cobalt and 0.4 grams/tonne PGE + gold. Further details of the Keivitsa property may be found in the Technical Report dated September 2003, as amended December 2003, which is available at www.sedar.com.

Mr. John Pedersen, M.Sc., P.Geo., acts as the Company's Qualified Person and has verified the data disclosed in this press release.

About Scandinavian Gold

Scandinavian Gold is a Canadian company exploring for precious and base metals in Scandinavia, with emphasis on Finland. The Company is currently developing one of Finland's largest mineral discoveries, the 100%-owned Keivitsa nickel-copper-PGE project. Scandinavian Gold believes that Finland offers excellent potential for large-scale discoveries in under-explored terrain, combined with a favourable, well-administered mining law, clear security of title and long-established political and economic stability. The Company's 11.3 million common shares trade on the Toronto Stock Exchange under the symbol SGL.

Contact Information

  • Scandinavian Gold Limited
    Peter Walker
    President & CEO
    011-44-7717-223909
    or
    Scandinavian Gold Limited
    Roderick Chisholm
    CFO
    (416) 203-6128
    or
    Scandinavian Gold Limited
    Brian Barbour
    (403) 813-5832
    or
    Scandinavian Gold Limited
    Tom Hart
    (403) 701-4278
    info@scangold.com
    www.scandinaviangold.com