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Arctic Minerals yesterday announced that it has made the first diamond drill holes at Peräpohja. Five holes were drilled for a total of 1 195 meters, which translates into an average depth of about 240m. The purpose of the drilling was to map the stratigraphy of the area. This new data can be combined with existing geological, geochemical and geophysical data to create a hypothetical geological model in three dimensions. The model together with the data can be used to find the locations of new promising drill targets. The purpose of the drilling was not to find an orebody. The project is still in an early stage and some more exploration work will need to be performed in order to localize potential orebody targets for target drilling.
We have looked at Arctic Minerals’ applications for exploration permits at Peräpohja at TUKES. There are some new applications for exploration permits from November 2020, but most new ones are from December 2020. The new areas total 487 km2. A company normally needs an approved exploration permit before drilling can commence, but it is possible to initiate drilling before approval with the permission of the landowner. We estimate that drilling must have commenced around the same time as the applications were registered with TUKES. Arctic Minerals is thus moving ahead with the exploration program at Peräpohja at a good speed. More exploration work will be performed at Peräpohja during this year, in the office as well as in the field, including further deep diamond drilling.
Diamond drilling is expensive. Thanks to the earn-in agreement with Rio Tinto in effect since January 2020, all costs will be born by the joint venture. The first USD 4m will be covered by Rio Tinto during up to three years in the first stage in order to earn a 51 percent share of the joint venture. The first stage should end by the latest in January 2023. We expect to see an acceleration in the exploration efforts during this year in order to meet the deadline.
In the second stage, a further USD 5m can be spent by Rio Tinto during at most two years to earn a 75 percent of the joint venture. Thus, up to a total of USD 9m can be invested in the Peräpohja project until January 2025 without any contribution from Arctic Minerals, though the company would end up owning 25 percent of the asset. So it is important that the money is spent wisely.
Perähpoja is a cluster of exploration permits around Tornio (Torneå) close to the Swedish border. It is Arctic Minerals’ most important exploration project. Arctic Minerals is searching for a copper deposit, which would likely also contain several secondary metals. It is located south-west of Nutukka, which we wrote about in our last Mrkt Buzz. Read more about Peräpohja, Nutukka and Arctic Mineral’s other exploration targets in our initial coverage of the company.
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