Sweden isn’t exactly in the major leagues with other gold mining countries, but the relatively unexplored country does have gold in it and its geopolitical environment couldn’t get much better for miners. While the country is outside the top 25 in gold producing countries, the 2013 Fraser Institute Survey ranks it first for most attractive jurisdictions for mineral exploration and development. About seven years ago, Sweden’s gold prospects made a splash in the business when two grandmothers, who are also amateur geologists, were finding nothing when hunting for wild berries, but a few bangs with their geologist hammers, and they discovered gold.
In fact, the rock the ladies cracked open contained 23 grams of gold per ton, nearly five times what the most active mines in the country were yielding. Some experts think the land in the northern part of Sweden could be the largest gold deposit in Europe. The property, which was first optioned by Hansa Resources (TSX-Venture:HRL) and then sold to Sweden’s Botnia Exploration AB, remains relatively undeveloped from what we can tell at AllPennyStocks.com.
For the most part, explorers, including Botnia Exploration and Gungnir Resources Inc. (TSX-Venture:GUG), are focused about 300 miles or so north of the ladies’ find in Overturingen. At the start of 2014, Vancouver-based Gungnir was a privately held company. In February, a deal was reached with Anglo Swiss Resources to which Anglo acquired Gungnir and then changed its name to the later and did a one-for-five reverse split. Anglo Swiss paid $300,000 in cash and issued 32.6 million shares and let three shareholders of Gungnir retain a 2.4% net smelter royalty (which included Anglo Swiss CEO Jari Paakki, a minority investor in Gingnir) for the properties acquired in the deal. The properties, Knaften and Nordanas, span about 22,500 hectares (225 sq. miles) in northern Sweden within the area dubbed the "Gold Line" in the mineral rich Vasterbotten District.
The region hosts 12 million ounces of gold in existing and mined resources. Other miners in the area include:
• Mandalay Resources (TSX:MND)(Bjorkdal, one million ounces produced, 975,000 ounces @1.73 g/t gold measured and indicated, 900,000 ounces @ 1.78 g/t gold inferred, 320,000 ounces proven and probable).
• Orex Minerals (TSX-Venture:REX)(Barsele, 550,000 ounces @ 1.2 g/t gold indicated, 600,000 ounces @ 1.0 g/t gold inferred).
• Boliden Mining (Boliden, 4 million ounce @ 16 g/t gold, past producer).
• Lappland Goldminers (Faboliden, 2.2 million ounces @ 1.06 g/t gold measured and indicated, 900,000 ounces @ 1.03 g/t gold inferred).
• Dragon Mining (Svartliden, 320,000 ounces produced at 4.32 g/t gold).
The acquisition left the new company with a portfolio that contained the Sweden properties, the Lansdowne House Rind of Fire (nickel/copper) property in Ontario and Kenville Gold and Blu Starr Flake Graphite properties in southeastern British Columbia. Before the merger was finalized, the Kenville Gold property was sold to 0995237 B.C. Ltd for $5.9 million. The sale provided Gungnir with some cash and a revenue stream going forward via payments from 0995237 of $900,000 upfront and $1 million per year for the next five years.
Exploration on Knaften is underway with Gungnir on Wednesday releasing an update from the first-phase exploration program. Through prospecting and geochemical rock sampling, Gungnir is aiming to identify target areas for geophysics and drilling. The results were highlighted by a 8.52 g/t gold boulder discovery within a developing eight-kilometre-long gold-arsenic-(molybdenum) geochemical-magnetics trend that covers the western contact of a granitic intrusion. The high-grade boulder is believed to be locally-derived based on its size and angularity.
Gungnir’s main target is an intrusion-related gold deposit, which tend to be large with open pit to high-grade gold. Examples of this type of gold deposit are the aforementioned Bjorkdal mine of Mandalay in Sweden and Pogo, Fort Knox and Donlin mines in the Yukon.
On the public front, Orex Minerals and Mandalay both have had strong 2014’s so far, helped in part by the Swedish assets. Gungnir trails its peers in development (and value with a market cap of only $1.35 million), but it will be interesting to see if it can enjoy a similar success going forward. Proper due diligence is, as always, encouraged.
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