Mining and exploration company Dannemora Mineral AB released an update of the Dannemora Mineral Reserve yesterday. The new reserve estimate shows an increase of 6.9 million tonnes up to 35.1 million tonnes probable mineral reserves, while the iron content in the crude ore estimate was decreased by 0.94 percent to 35.26%.
The basis for the new estimate is an updated Mineral Resource from last August and includes core drilled mineralization Norrnäs 3 and a changed cut-off grade from 30% to 20% iron. The lower grade affects to amount of waste rock and thus iron content. These are functions of the chosen mining method, in this case sublevel caving.
The company’s current main goal is to make Dannemora iron ore mine operational again. The historic mine had been running for over 500 years when it was closed by SSAB Swedish Steel AB (OMX: SSAB A) in 1992 mainly due to poor demand for iron ore and low prices. Dannemora Mineral AB was founded in 2005 and it is has been constantly estimating that in Q2 2012 the mine would be back in operation.
The company is listed in the First North, Stockholm and Oslo Axess, both of which are intended mainly for small growth companies. The stock trades relatively actively in the First North and is up around 70% in the past month. Current valuation is certainly large enough to list in NASDAQ OMX main list, but the company decided to push that back last year due to negative stock market climate. The company has already signed long-term supply agreements with ThyssenKrupp Steel Europe AG, Salzgitter AG, and Stemcor UK Ltd.
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