Scandinavian Minerals Limited

Scandinavian Minerals Limited

June 14, 2005 09:50 ET

Scandinavian Gold Limited: Metallurgical Breakthrough at Keivitsa Nickel-Copper-PGE Property

TORONTO, ONTARIO--(CCNMatthews - June 14, 2005) -

- Bench tests indicate that smelter-grade concentrates can be produced

- Mini-pilot run commenced

Scandinavian Gold Limited (TSX:SGL) announced today positive results from the Phase 3 metallurgical study for its Keivitsa, Finland, nickel-copper-PGE property, which is 100%-owned by the Company. Bench-scale tests indicate that separate copper and nickel concentrates can be produced by flotation. Such concentrates would be suitable for sale to conventional smelters.

The tests were designed to produce a nickel concentrate with minimum 8% nickel at a recovery of 70%, together with a copper concentrate with less than 0.8% nickel. The results yielded nickel concentrates with 8 - 12% nickel at recoveries averaging 60%. However, grade/recovery curves for three of the tests showed that the desired combination of 8% nickel at 70% recovery could be achieved. The copper concentrates produced assayed 20 - 26% copper and 0.5 - 0.6% nickel.

"We believe that the latest results constitute a real breakthrough for the Keivitsa project," said Peter Walker, President and CEO. "The production of smelter-grade concentrates was not considered feasible for Keivitsa in the past. However, advances in flotation technology have enabled a new approach to be taken to the production of separate nickel and copper concentrates that would be suitable for sale to smelters."

Following the latest results, the Company has immediately commenced a mini-pilot program designed to fine-tune the flotation flow sheet and to test it on a larger scale. The program will also provide concentrate samples for evaluation by smelters who have expressed interest in treating the material. Test material for the program will be taken from cores from a recently-completed diamond drilling campaign, the results of which are pending. Results of the mini-pilot trials are expected to be available at the end of August.

The Phase 3 bench tests were undertaken at the Mineral Processing Laboratory of the Geological Survey of Finland. A total of 20 tests was run, using 150 kg of drill core. The drill core comprised the nickel-copper-PGE ore type that forms the main orebody at Keivitsa.

Management is pursuing 2 scenarios in parallel for the development of Keivitsa, in order to determine the best means of bringing the project into production. One is based on the production of separate nickel and copper concentrates suitable for sale to smelters, as outlined above. The other involves the treatment of a bulk concentrate by pressure acid leach.

In view of the latest results, the Company intends to embark on a new Pre-Feasibility Study based on open-pit mining of between 2 and 4 million tons of ore per year, with production of separate nickel and copper concentrates for sale to smelters. This Study is scheduled to begin in August and to be completed by early 2006.

Scandinavian Gold has also upgraded the permitting work to reflect the above scenario. It is now hoped to submit the environmental permit application by the end of the year.

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

Keivitsa is one of the largest mineral discoveries in Finland's history, hosting a probable reserve of 120 million tonnes within an indicated resource of 150 million tonnes and an inferred resource of 315 million tonnes. As such, it constitutes one of the world's major undeveloped sulphide nickel deposits.

All metallurgical test work was conducted in Finland by GTK Mineral Processing (the Geological Survey of Finland). Mr. John Pedersen, M.Sc., P.Geo., acts as the Company's Qualified Person.

About Scandinavian Gold

Scandinavian Gold is a Canadian company exploring for precious and base metals in Scandinavia, with emphasis on Finland. Scandinavian is currently developing one of Finland's largest mineral discoveries to date, the 100%-owned Keivitsa nickel-copper-PGE project. The Company 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. Scandinavian Gold's 11.3 million common shares trade on the Toronto Stock Exchange under the symbol SGL.

Contact Information