Kristie Batten: Nordic ramps up work on Finnish gold ground

Nordic Resources could be in for a re-rate as the market starts to realise the potential of its recently acquired gold projects in Finland.

It’s been a busy few months for the company, which was previously focused on the large Pulju nickel project in Finland.

In April, Nordic Resources (ASX:NNL) acquired three gold projects in Finland, collectively known as the Middle Ostrobothnia Gold Belt or MOGB project.

Since then, the company has raised more than $5 million, including a cornerstone investment by high-conviction specialist Powerhouse Ventures, upgraded the resource or MOGB twice to 34.3 million tonnes at 1.11 grams per tonne gold equivalent for 1.23 million ounces of AuEq, and appointed well-respected geologist Malcolm Norris as chairman.

The company is in the middle of its first drilling program at the flagship Kopsa project, which has a resource of 630,000oz of gold and 38,000t of copper, over 90% of which sits within 150m of surface.

Nordic reported on Friday that it had completed eight holes for more than 1700m of diamond drilling, with the first results due around mid-October.

The company will be hoping to replicate previous results including 98.7m at 3.90g/t gold and 0.19% copper from 6m and 54.5m at 2.49g/t gold and 0.18% copper from 19m.

Despite results still being a while off, Nordic has made a strong start to September with the stock up more than 40% last week.

Still, Nordic executive director Robert Wrixon told Stockhead the company was still undervalued compared to peers with similar-sized resources, though acknowledged it was still a new story to most.

“There’s a lot of upside here, and I think we will get there eventually, because the last raise that we did, where Powerhouse came in as a key cornerstone investor, a number of other funds and wealth managers did as well,” he said.

“There’s quite a few high conviction investors there who believe in this and are perfectly happy to continue to buy our shares, and I think you see that since the announcement of this gold deal and that last raise, our liquidity has been in an order of magnitude higher than we’ve ever been, so I think that’s great news for investors.”

Finland a tier one jurisdiction

There aren’t many Aussie companies working in Finland and Wrixon suggested if the project was in Western Australia, it would attract a higher valuation due to the market’s understanding of it as a jurisdiction.

However, Finland recently topped the annual Fraser Institute survey of mining jurisdictions, while WA slumped to 17^th.

Wrixon said Finland was a tier one jurisdiction.

“You’ve got security of tenure, a clear mining code, the permitting process is very well laid out and well defined,” he said.

“It’s got a strong mining history, especially in gold, a proactive, very helpful mining department, and a predominantly English-speaking and well-educated workforce.”

Finland is home to Europe’s biggest gold mine, Agnico Eagle Mines’ Kittila.

Wrixon said operating costs in Finland were cheaper than Australia.

“They have first world infrastructure, including a fantastic rail network that’s connected to almost every town, roads going everywhere, and an incredibly good power network,” he said.

“They’ve got hydro, they’ve got nuclear, they’ve got coal, they’ve got gas and they’ve actually installed a huge amount of wind capacity recently, so for the entirety of last summer, I was told just recently, retail electricity prices averaged less than one euro cent per kilowatt hour,  because it was windy and the wind turbines were producing a lot.

“Cheap power is just a wonderful thing to have if you’re in the mining industry trying to build a mine.”

Moving MOGB forward

While Nordic already has a sizeable resource, one of the company’s aims is to continue to grow it.

“We, as a company, have never drilled these projects before, so we do need to understand a little bit more,” Wrixon said.

“There seems to be some very low hanging fruit in terms of resource upside, so why not grab it?

“Let’s try and see how big we can grow this resource base, because there hasn’t been much exploration done on these three projects for quite a long time.”

Nordic will also investigate production options, whether it be via toll treatment or a standalone plant.

There are two plants in the region: Pyhasalmi, 45km to the east of Kopsa, and Laiva, 120km to the northwest.

“One of the great things about Kopsa and the reason why we really wanted it is because it does have a previously granted mining concession, which is not yet fully valid, because we need to have get this road access permit, which is in process,” Wrixon said.

“Once that concession is fully valid, that opens up all sorts of near-term opportunities for us, so in parallel, we’re working on an options analysis study.”

In the meantime, Nordic is awaiting results for a recently completed ground magnetic survey over the expanded Kopsa exploration area, while a fixed-loop electromagnetic survey over the northeastern zone at Kopsa will kick off this week.

“There will be plenty of news coming through,” Wrixon said.

“And we still have Pulju, of course, and I’m hoping to have announced some sort of farm-in or joint venture with a partner for this nickel-copper project before the end of the year as well.”

Pulju’s Hotinvaara deposit has a resource of 418Mt grading 0.21% nickel, 0.01% cobalt and 53 parts per million copper for 862,800t of nickel, 40,000t of cobalt and 22,100t of copper.

“It’s a really fantastic project, but it’s seen as primarily a nickel project, which, at the moment, based on current drilling, it is,” Wrixon said.

“There’s actually a lot of copper prospectivity, which is what a lot of people are also interested in, but it’s a big area, and we are going to need to partner with somebody with deeper pockets to really progress it.”

At Stockhead we tell it like it is. While Nordic Resources is a Stockhead advertiser at the time of writing, it did not sponsor this article.