Scandinavian Minerals Limited
TSX : SGL

Scandinavian Minerals Limited

January 25, 2006 10:39 ET

Scandinavian Gold Limited: New Resource Estimate For Keivitsa Nickel-Copper-PGE Property

TORONTO, ONTARIO--(CCNMatthews - Jan. 25, 2006) - Scandinavian Gold Limited (TSX:SGL) -

- Higher-grade resource to measured and indicated category

- Pre-feasibility study nearing completion

Scandinavian Gold Limited (to be renamed Scandinavian Minerals Limited) (TSX:SGL) today announced that it has completed a new resource estimate for its 100%-owned Keivitsa, Finland, nickel-copper-PGE property. The new estimate has focused on the open-pit portion of Keivitsa to a depth of 300 metres, where a resource of 70 million tonnes with a higher grade of 0.31% nickel and 0.43% copper in the measured and indicated categories has been calculated.

The estimate has been prepared by Lower Quartile Solutions of South Africa, part of the CSA Group, in association with St Barbara Consultancy Services ("St Barbara") of London, U.K.



Resources to 300 metres depth, 0.2% nickel cutoff:

--------------------------------------------------------------------
contained metal
million % grams/tonne (tonnes)
tonnes ----------------------------------------------------
Ni Cu Co Au Pd Pt nickel copper
--------------------------------------------------------------------

--------------------------------------------------------------------
Measured 56 0.31 0.42 0.01 0.15 0.22 0.34 174,000 235,000
--------------------------------------------------------------------
Indicated 14 0.30 0.47 0.01 0.15 0.19 0.30 42,000 65,000
--------------------------------------------------------------------
Measured
+
Indicated 70 0.31 0.43 0.01 0.15 0.22 0.34 216,000 300,000
--------------------------------------------------------------------

--------------------------------------------------------------------
Inferred 16 0.29 0.49 0.01 0.15 0.18 0.24 46,000 78,000
--------------------------------------------------------------------


The new resource estimate was undertaken to determine grade and tonnage for the higher-grade open-pit portion of the Keivitsa orebody, as well as the total resource to a depth of 1,000 metres. The estimate was made using the block kriging method.

Peter Walker, President and CEO of Scandinavian Gold, commented "We are delighted with this new resource estimate, which places a substantial higher grade resource into the measured and indicated categories. In addition, the extension of the total resource to 1,000 metres demonstrates that the Keivitsa deposit represents a major mineralised system."

The higher-grade zone is the subject of a pre-feasibility study currently being undertaken by St. Barbara and expected to be complete in March 2006. This study is based on an open pit mining operation producing approximately 3.5 million tonnes of ore per year, with production of smelter-grade nickel and copper concentrates. The eventual pit depth is currently planned to 300 metres.

The previous resource estimate, by SRK Consulting in 2001, used a cutoff grade of 0.1% nickel to a depth of 500 metres. Since that time, Scandinavian Gold has drilled 26 additional holes totalling 4,185 metres. This drilling has enabled higher-grade material to be placed in the measured and indicated categories. In addition, the inclusion of deeper, previously-drilled holes in the resource model has enabled the total resource estimate to be extended to a depth of 1,000 metres.



Resources to 1,000 metres depth:

---------------------------------------------------------------------
contained metal
million % grams/tonne (tonnes)
tonnes -----------------------------------------------------
Ni cutoff
% Ni Cu Co Au Pd Pt nickel copper
---------------------------------------------------------------------

---------------------------------------------------------------------
Measured
---------------------------------------------------------------------
0.1 185 0.22 0.29 0.01 0.09 0.13 0.21 408,000 537,000
---------------------------------------------------------------------
0.2 90 0.31 0.42 0.01 0.13 0.19 0.30 279,000 378,000
---------------------------------------------------------------------

---------------------------------------------------------------------
Indicated
---------------------------------------------------------------------
0.1 102 0.22 0.30 0.01 0.08 0.11 0.18 225,000 307,000
---------------------------------------------------------------------
0.2 51 0.30 0.44 0.01 0.11 0.16 0.25 152,000 224,000
---------------------------------------------------------------------

---------------------------------------------------------------------
Measured and Indicated
---------------------------------------------------------------------
0.1 287 0.22 0.29 0.01 0.09 0.13 0.20 632,000 834,000
---------------------------------------------------------------------
0.2 141 0.30 0.42 0.01 0.12 0.18 0.28 422,000 591,000
---------------------------------------------------------------------

---------------------------------------------------------------------
Inferred
---------------------------------------------------------------------
1,197,000
0.1 544 0.22 0.32 0.01 0.07 0.08 0.09 1,741,000
---------------------------------------------------------------------
0.2 291 0.29 0.46 0.01 0.09 0.09 0.1 843,000 1,337,000
---------------------------------------------------------------------


The above resource estimates are effective 25th January, 2006 and have been prepared by Mr. Dexter Ferreira, BSc (Geology), BEng (Mining), MBA, Pri.Sci.Nat., of Lower Quarter Solutions, South Africa. Mr. Ferreira is an independent Qualified Person under National Instrument 43-101 of the Canadian Securities Regulators. Mr. John Pedersen, M.Sc., P.Geo., is a director of Scandinavian Gold Limited, and also a Qualified Person, and has approved this press release. Note that contained metal calculations may not reconcile due to rounding calculations.

The Keivitsa project - an overview

Keivitsa, situated in northern Finland, is one of the world's major undeveloped sulphide nickel deposits and one of the largest mineral discoveries in Finland's history. The Keivitsa deposit is easily accessible by road. Water and hydroelectric power are available nearby.

In September 2005, the Company announced a major break-through in metallurgy: mini-pilot tests had confirmed the results of earlier bench testing to demonstrate that, with the application of new flotation reagents, smelter-grade concentrates can be successfully produced by conventional flotation methods. The current pre-feasibility study therefore envisages the production and sale of separate nickel and copper concentrates to smelters in Finland or abroad.

Further details regarding the Keivitsa project can be found in the report entitled "Independent Technical Report on the Keivitsa Ni-Cu-Co-PGE Deposit, Finland" prepared by SRK Consulting, as well as in previous press releases of the Company, all available at www.sedar.com.

Scandinavian Gold expects to complete a pre-feasibility study in March 2006 based on open pit mining of 3.5 million tonnes of ore per annum. Separate, smelter-grade nickel and copper concentrates would be produced for sale to smelters.

Environmental studies for the Keivitsa project are largely complete and it is expected that the applications for the environmental and mining permits will be submitted in March 2006.

About Scandinavian Gold Limited

Scandinavian Gold (to be renamed Scandinavian Minerals) 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 12.9 million common shares trade on the Toronto Stock Exchange under the symbol SGL.

Contact Information

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