Despite being north of the Arctic Circle, the site is connected to the national electricity supply, has readily available water supplies, and is well served by a highway to Rovaniemi, the main city in Lapland. Located close to the village of Kiistalä, the mine is adjacent to the paved highway linking Kittilä—some 50 km to the south with the town of Inari to the north east. As reported last year, construction started in second quarter 2006. During the past 12 months progress has been somewhat delayed by late equipment deliveries but AEM expects to start gold bullion production in fourth quarter 2008.

Increasing Resource
When Agnico-Eagle took over the Kittilä project from Riddarhyttan Resources in 2005 the Swedish company had already done considerable drilling, indicating a 2-million-oz gold resource. But AEM has done much more since then, establishing a substantial deposit with good further potential: deep drilling has confirmed the depth extension of the main Suuri deposit to approximately 1,100 m (approximately 350 m below the current reserves and resources) but these results have not been incorporated into the current resource estimates.

The Suuri zone is considered to be divided into three distinct lenses, East, Central and West. These three lenses currently host the majority of the reserves of the Kittilä mine. The Central and West lenses make up a significant portion of reserves in the upper portions of the main deposit but are largely untested below depths of 500 m. All three lenses will be tested at depth by further surface drilling in 2008 and by underground drilling in 2009 when the decline reaches its planned depth. AEM has also had the Geological Survey of Finland (GTK) doing deep seismic exploration using Russian technology and is looking forward to receiving the results.

In September 2008, AEM announced that the Kittilä deposit contained 2.996 million oz of probable gold reserves (18.2 million mt grading 5.12 g/mt). In the indicated mineral resource category there is a further 5.4 million mt grading 3.03 g/mt, or 0.53 million oz. In the inferred mineral resource category there is 15.7 million mt grading 4.34 g/mt, or 2.2 million oz. The gold grade cut-off used to determine the mineral resources varied between 1.5 and 2.4 g/mt for open-pit and underground, respectively. A mineral reserve cut-off based on gold grade that varied between 2 and 3.2 g/mt was used for open-pit and underground, respectively. AEM says there are no known environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues that materially affect the Kittilä mineral resources or mineral reserves.

Conventional Mining
As mentioned in the 2007 Scandinavian Report, Kittilä is being developed as both an open pit and an underground mine. Juha Riikonen, the mine superintendent, explained that pre-stripping waste rock had enabled ore mining to start in June 2008. About 150,000 mt had been stored by mid-August ahead of the plant start-up and approximately 500,000 mt should be mined by the end of the year. The ore is variable as to grade and graphite content so a number of qualities have been stocked separately for blending to the crusher.

Equipment from Finnish manufacturer Normet will be used for applying shotcrete at Kittilä.

In the pit the ore zone and 10 m of waste on either side are buffer blasted as the different zones stay intact. The contact and ore grade variations are marked out for selective loading; the Cat machines usually taking the waste and the smaller hydraulic excavators with narrow buckets loading the ore. The pit mine geologists monitor the loading process. As well as using the available diamond drill and sample drilling data, high ore grades can be identified with a handheld XRF analyzer, explained mine geologist Leena Rajavuori who, together with some of the mine’s other workers, joined Kittilä from the Pahtavaara gold mine near Sodankylä, where Lapland Goldminers recently restarted the processing plant to treat waste material.

The main 5- x 5-m cross section, 1:7 gradient decline for the underground mine had reached the 3-km mark in mid-August, and will be driven to 500 m over the next two years. YIT started the ramp but AEM took over in June 2008, using a newly acquired Atlas Copco Boomer E2 C rig with a high frequency 22-kW drill. A second E2 C is scheduled for delivery in the second week of September. For roof support work the mine has a new Atlas Copco Boltec LC fitted with a screen handling arm. The machine places bolts that are secured with resin and a Normet Spraymec 1050 WPC is teamed with a Utimec 1500 concrete transporter to apply a shotcrete lining.

Daily blasting in both the open-pit and the underground development uses water gel explosive supplied and charged by Maxam, one of the largest explosives suppliers in Europe and active worldwide as well. However, this is the Spanish company’s first contract in Finland and the firm is constructing a gel matrix manufacturing plant on the Kittilä site which should be supplying the mine—and possibly others— by year-end. The Finnish contractor Tapojarvi responsible for loading and haulage of the rock blasted underground has a fleet of two Cat 980 wheel loaders and four Mercedes trucks. The firm has a large maintenance shop on surface.

From the main decline Kittilä has started two other ramps and has driven several accesses to the ore boundaries for diamond core drilling. Because the ore lies in a shear zone, whenever the headings intersect the orebody, there is a substantial water in-flow. At the time of E&MJ’s visit only a limited number of pumps was available so work was being planned to avoid contact with the ore as much as possible. Metso Minerals is supplying pumps with a capacity of 400 m3/h in September, with another 400 m3/h to be delivered in 2009.

Arctic Drilling is using an Atlas Copco Diamec U6 APC diamond core drill, which the company has mounted on a wheeled carrier, for exploration drilling with NQ and BQ rods. Next year there will be two diamond drills doing definition drilling underground, Riikonen said, and AEM will excavate the 350-m-deep main level so all the main underground infrastructures can be constructed. Meanwhile, Bergteamet, the Swedish contractor based in Boliden, has been contracted to raise bore a fresh air raise. The mine telecommunications system will be based on W-LAN technology with VOIP and tagging. AEM was close to signing a supply contract in August and hopes to start installation before the end of 2008.

Mine production will be conventional, said Riikonen. The stopes will yield 10,000- to 12,000-mt ore each and stope development and trial mining are scheduled to start in 2009. Kittilä will next year purchase longhole drilling rigs, cable bolting equipment, LHDs and at least three 50– to 60-mt-capacity trucks plus a spare. The LHD operation will be remote controlled but not automated.

Innovative Processing
The starting point for designing Kittilä’s process flowsheet was the refractory nature of the gold ore. None of the gold is visible and most of it must be liberated from arsenopyrite and pyrite. Pressure leaching was chosen as the key processing step. Although OMG uses autoclave technology for metals extraction at its Kokkola works, and one has been installed at Harjavalta for R&D use, this will be the first in Finland for processing ore. The flowsheet was developed by Agnico-Eagle, together with Canadian consultants, including SNCLavalin and Dynatec.

The Air Liquide plant shown here will supply oxygen for autoclave leaching at Kittilä.

The SAG mill, supplied by Outotec, is 5.49 m (18 ft) in diameter with an effective grinding length of 9.14 m (30 ft). It has a power draw of 4,400 kW and is equipped with a variable speed single pinion WRIM slip ring motor and SER (slip energy recovery system) drive from International Electrics SA. The mill is generally similar in design to those used in South African gold operations, Outotec says, and will run with up to a 25% ball charge although the designed charge is 8%-9%. The 3,000-mt/d mill grinds to a P80 of 74 micron: test work on finer grinds did not indicate any significant benefit. The ore to be mine underground is harder than the open-pit material and a pebble mill can be added if required.

The milled product will go to a flotation circuit equipped with nine Outotec OK40 TankCells. Here carbon will be removed prior to sulphide flotation and a sulphide concentrate with 50–100-g/mt gold will be recovered. The sulphide concentrate will be thickened ready for acidulation with sulphuric acid, which breaks down limestone and dolomite in order to minimize carbon dioxide generation during pressure leaching.

Some 20 mt/h will proceed to pressure oxidation for one hour at 19 bar and 198°C in an autoclave supplied with oxygen from the landmark on-site plant supplied by Air Liquide. The autoclave, designed by DSB Saurebau in Germany and fabricated in Finland, is 24 m long by 3.5 m in diameter and is the first of its kind in Finland. The reaction product from the autoclave will be directed to the hot curing stage, which stabilizes the reactions carried over from the autoclave. The hot cure is followed by a three-stage CCD circuit. The CCD thickeners as well as the concentrate and tailings thickeners have been supplied by Delkor.

The liberated gold can then be dissolved in CIL cyanidation tanks fabricated locally and the carbon regenerated using technology from Summit Valley Equipment & Engineering of West Bountiful in Utah, USA. The Inco Process, as designed by SNC-Lavalin, is provided for cyanide destruction. Gold metal will be recovered by electrowinning and then smelted to 96- 97% gold bullion with minor amounts of silver. The whole system is designed to ensure that no arsenic or cyanide escapes to the natural environment. The bullion will be refined in Switzerland.

Optimistic Outlook
Based at the office in Espoo together with Financial Director Jarmo Frii and Technical Manager Sami Hindström, Ingmar Haga is Agnico-Eagle’s vice president Europe. Having worked for many years in Toronto with Outokumpu, he is very familiar with Canadian mining practices.

Haga pointed out that, having developed a very profitable operation at LaRonde in Quebec, the company is pursuing a growth strategy focused on systematic exploration of 100%-owned, secure title properties in low- to no-risk countries. In Canada, Goldex poured its first gold in May this year and Lapa should start production in 2009. Meanwhile AEM is undertaking a huge amount of exploration at several other projects in the Americas as well as in Finland, expecting to drill about 275 km in 2008, utilizing 25 drill rigs. The total expenditure is at the highest level in the company’s history.

In Europe, Haga’s mandate is to grow the company’s business using Kittilä as a base for investment. AEM’s exploration team of 10-11 people—half geologists, half technical support—is based at Kittilä. Some €5 million has been allocated for exploration outside the Kittilä property and, although some of this is being spent on the continuation of the Suurikuusikko Trend, work has started on an additional gold exploration program in Finland, at Oijärvi 400 km south of Kittilä, and contractor drilling is under way.

At Kittilä itself, six diamond drills continue to operate. Four drill rigs are located on the property covered by the Kittilä mining lease, including an underground drill. These machines are dedicated to further definition of the current reserves and resources and are attempting to extend the resources at depth and along strike. The remaining two drills continue to be focused on exploration outside of the Kittilä mining lease along the Suurikuusikko Trend. AEM has claims covering the whole 25-km-long structure, Haga remarked.

According to Sean Boyd, vice chairman and CEO of AEM, the recent exploration success at Kittilä provides optimism that this property is just one of several in the company’s portfolio that could ultimately grow to contain more than 5 million oz of gold reserves. At December 31, 2007, proven and probable gold reserves hit a record of 16.7 million oz and the company is well positioned to achieve its gold reserve target of 18 million to 20 million oz. Gold resources also continued to grow to record levels. AEM’s indicated mineral resource now stands at 2.8 million oz while the inferred mineral resource stands at 4.7 million oz. Historically, says Agnico-Eagle, the company has had great success in converting its gold resources to reserves. AEM anticipates total gold production between 300,000 and 320,000 oz in 2008, compared with 230,000 oz in 2007, and all the present main projects should be producing within three years, further increasing the company’s output.