Scandinavian Minerals Limited

Scandinavian Minerals Limited

November 29, 2006 19:00 ET

Scandinavian Minerals Reports Year End Results

TORONTO, ONTARIO--(CCNMatthews - Nov. 29, 2006) - Scandinavian Minerals Limited (TSX:SGL) is pleased to announce that it has filed its audited consolidated financial statements and MD&A for year ended August 31, 2006. For the year, the Company reported a loss of $888,032 ($0.06 per share) compared to a loss of $1,394,019 ($0.12 per share) for the year ended August 31, 2005.

During the year, the Kevitsa nickel-copper-PGE (platinum group elements) project in northern Finland was further advanced through the completion of a positive pre-feasibility study. In addition, the Company commenced an infill drilling program and pilot metallurgical campaign. Both these programs were completed after the year-end. The Company also filed its Environmental Impact Assessment for the project.

During the past year, the Company completed three private placement financing for gross proceeds of $18.2 million. These financings will enable the Company to significantly advance the Kevitsa project through the bankable feasibility stage, as well as providing funds for identification and pursuit of additional opportunities in the Nordic region.


Kevitsa is a large nickel-copper-PGE deposit situated in northern Finland and is the Company's flagship project. In July 2006, the Company announced a positive pre-feasibility study for Kevitsa. This study showed robust economics at conservative long-term metal prices.

The Kevitsa property hosts a proven and probable mineral reserve of 67 million tonnes of nickel-copper-cobalt-PGE ore. St. Barbara has prepared a pre-feasibility study (dated July, 2006) in which it estimated the following open pit reserve:

Pre-Feasibility Study: Mineral Reserve (to 400 metres)
% grams/tonne
Ni Cut- ---------------------------------------------
off (%) tonnes Ni Cu Co Au Pd Pt
Proven 0.18% 56.2 Mt 0.295 0.415 0.014 0.141 0.201 0.310
Probable 0.18% 10.6 Mt 0.295 0.492 0.015 0.142 0.171 0.267
Total 0.18% 66.8 Mt 0.295 0.427 0.014 0.141 0.196 0.303

This mineral reserve was calculated to a projected pit depth of 400 metres, not 330 metres as previously reported. The pre-feasibility study was based on an open pit mining operation producing 4.5 million tons ore per year, with production of separate nickel and copper concentrates for sale to smelters in Finland or abroad. The study assumed a conservative base case using prices of $4.68/lb ($10,319/ton) nickel and $1.21/lb ($2,668/ton) copper and estimated the net present value ("NPV") and internal rate of return ("IRR") as follows:

NPV 7% NPV 7% US$
nickel price copper price EUR million million(ii) IRR %
$10,319/ton ($4.68/lb)(i) ($1.21/lb) 91.3 111 17.5
$12,500/ton ($5.67/lb) ($1.50/lb) 219.5 266 30.4
$14,000/ton ($6.35/lb) ($1.81/lb) 328.2 398 40.5
(i) study base case
(ii) at base case exchange rate of EUR 1.00 equals US$1.212

The financial model for the study assumed 100% equity finance. Other prices used in the study were $15/lb cobalt, $750/oz platinum, $200/oz palladium and $450/oz gold.

Following the study, a pilot plant program was commenced on a 400-ton bulk sample taken from a trial pit at Kevitsa. This program is designed to follow up the previous year's metallurgical breakthrough, which showed that smelter-grade concentrates could be produced from the Kevitsa ore.

In addition, an 11,450-metre infill drilling program was completed. It comprised 33 holes, consisting of 26 new holes and 7 extensions of previous holes. Results of the program closely match results from previous drilling. This confirms and further increases the level of confidence in the known ore reserve and resource figures. In addition, a number of holes show noticeably higher grades over extended intervals.

Results from the pilot plant and infill drilling are anticipated to be incorporated into a full bankable feasibility study, planned to start early in 2007. The Company also filed an Environmental Impact Assessment for the project with the Finnish authorities.

The main focus of the Company's work at Kevitsa is to develop an open pit mine producing separate nickel and copper concentrates for sale to local or overseas smelters. At the same time, the Company recognizes the potential of pressure acid leach technology to add value to the project in the future and will continue to monitor possibilities in this regard.

Further information concerning the Kevitsa property is available in the independent technical report "Kevitsa Pre-Feasibility Study" prepared by St. Barbara Consultancy Services ("St. Barbara"), dated July 2006, which is available at

Mr. John Pedersen, M.Sc, P.Geo, the Company's consulting geologist and a director, is responsible for the exploration and development programs and is the Company's internal Qualified Person as defined by National Instrument 43-101 of the Canadian Securities Administrators ("NI 43-101"). Mr. Pedersen has supervised the preparation of, and has verified, the scientific and technical data set forth in this release.

About Scandinavian Minerals

Scandinavian Minerals Limited is a Canadian company exploring for precious and base metals in Scandinavia and Finland. The Company is currently developing one of Finland's largest mineral discoveries, the 100%-owned Kevitsa nickel-copper-PGE project. Scandinavian Minerals believes that the Nordic region offers excellent potential for large-scale discoveries in under-explored terrain, combined with a favourable mining law, clear security of title and long-established political and economic stability. The Company's 17.7 million outstanding common shares trade on the Toronto Stock Exchange under the symbol SGL.

Contact Information

  • Scandinavian Minerals Limited
    Peter Walker
    President & CEO
    Scandinavian Minerals Limited
    Roderick Chisholm
    (416) 203-6128
    Harbour Financial Inc.
    Brian Barbour
    (403) 813-5832
    Harbour Financial Inc.
    Tom Hart
    (403) 701-4278
    Studer Consulting AG
    Marlies Studer
    (+41) 44 215 2803