Equinox Resources Ltd may have the opportunity of involvement in a major iron ore project in northern Sweden. The Swedish iron ore mining company, LKAB, has advised Equinox that the Kiruna orebody extends downdip onto Equinoxs Luossajoki exploration permit, which immediately adjoins the LKAB Kiruna exploitation concession.
LKAB has advised Equinox that the Kiruna orebody extends onto the Luossajoki EP at about 1,000m depth, and have requested that Equinox move the Luossajoki EP boundary 1,000m to the east to allow LKAB to continue to develop the Kiruna orebody at depth.
The Kiruna Mine has been operating since 1898 and is reputed to be the worlds second largest underground mining operation, currently producing at the rate of about 21mtpa. LKAB are currently operating the main haulage level at 1,045m depth and are mining between 775m and 1,045m. Mining to the 1,045m level should be completed around 2013, but development activities for the next level below 1045m will probably need to commence within the next five years. Consequently, while LKAB do not intend to be mining on Equinox ground for some time, they will likely require title to the Equinox ground for reserve definition and development within the next few years.
Equinox is currently considering the options available to the company, which may include an equitable resolution with LKAB; continuing exploration of the Luossajoki EP; or the involvement of other parties with appropriate iron ore development experience.