The Zinkgruvan mine (“Zinkgruvan”) is an underground zinc-lead-silver mine, owned and operated by Lundin Mining Corporation (“Lundin Mining”), and located approximately 250 km southwest of Stockholm, Sweden. This low-cost mine has been producing on a continuous basis since 1857.
Current mineral reserves are sufficient for a mine life in excess of 10 years and excellent opportunities for ongoing reserve and resource expansion exist at Zinkgruvan. Historically, the mine has been very successful at converting inferred resources into measured and indicated resources and subsequently into mineral reserves.
Zinkgruvan employs a conventional underground crushing, grinding and flotation milling process producing zinc and lead concentrates which are transported via ship to smelters in Europe. Nominal production capacity of zinc-rich ores is currently 1.1 million tonnes of ore throughput per annum.
In 2008, Zinkgruvan reported its first copper reserve, containing silver byproduct credits. A new copper plant was commissioned in the second half of 2010 and the mill is currently ramping up copper-rich ore processing. Throughput is anticipated to reach 300,000 tonnes per annum in 2013, offering additional silver production upside.
Silver Purchase Agreements
In December 2004, Silver Wheaton entered into a silver purchase agreement with Lundin Mining to purchase 100% of the life of mine payable silver produced at the Zinkgruvan mine for an upfront cash payment of US$50 million in cash, 6 million Common Shares and 30 million Silver Wheaton Common Share Purchase Warrants, plus a payment equal to the lesser of US$3.90 per ounce of delivered silver (subject to an annual inflationary price adjustment) and the then prevailing market price per ounce of silver.
For more information about the Zinkgruvan mine, please visit Lundin Mining’s website at www.lundinmining.com.
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