Lappland Goldminers presents a feasibility study for the Fäboliden gold project



Lappland Goldminers AB (publ), listed on First North and the
Norwegian OTC list, has carried out a feasibility study for the
Fäboliden gold project. The feasibility study, addressing the
establishment and operation of a mine with a processing plant at
Fäboliden, is carefully based on a conservative evaluation of the
gold grades and tonnage based on an extensive core drilling program.
Company Management concludes, based on test mining including major
testing and concentrating trials, that the gold grades of the deposit
could be considerably higher. The feasibility study shows that the
Company's project can produce gold in the Fäboliden project at a cost
equivalent to around 43-60% of the current gold price.
 
Conclusions:
Summary for alternatives at current prices of February 1, 2008, and
conservatively estimated grades:

  * Measured and indicated mineral resources are estimated to approx.
    60 Mt and contained Au at 2.4 M.tr.oz, corresponding to proven
    and probable reserves of 1.94 M.tr.oz. In addition there are
    inferred resources amounting to approx. 10 Mt (not included in
    this evaluation).
  * Average Au grade after dilution in the open pit: 1.2 g/t.
  * Average Au grade after dilution for the underground production:
    1.07 g/t.
  * Cash cost open pit, USD/oz: 385 / (428)
  * Cash cost underground, USD/oz: 485 / (539)
  * Planned start of operation 2011
  * Production 4.6 million tons of ore per year
  * Pay-back time 4 years. The value of accumulated cash flow, after
    whole investment repaid, is estimated to approx. SEK 3,500
    (2,500) million (excluding interest costs and taxes)
  * Capital Expenditure (Capex) is estimated to SEK 1.770 million for
    the open pit and SEK 280 million for the underground mine.

Calculations are based on daily prices from February 1, 2008, when
the gold price was at 933 USD/oz, silver 17 USD/oz and the exchange
rate SEK 6.44 per USD. One oz is equal to 31.1035 g. Since then the
dollar exchange rate has fallen heavily against the Swedish Krona.
This influences the investment cost positively, while the operating
costs and cash flow from the project is influenced negatively. The
numbers in parenthesis above are corrected downward using a token
adjustment of the dollar exchange rate of 10%. Also see the
sensitivity study on page 8 of the feasibility study.
 
The feasibility study has been compiled by Outotec Sweden AB,
previously Outokumpu Technology, with extensive experience from
mining projects both in Sweden and internationally. A number of other
consultants have also been active in the study, such as SWECO,
GeoVista , Minpro and others. A total of 70 experts have been engaged
in the project, which includes both open pit and underground mine, in
addition to processing plant, dams, infrastructure and environmental
issues. The Company's own personnel has been active in all parts of
the project, and some of the important aspects such as methods and
routines for exploration, geological interpretation and resource
estimates have been reviewed by internationally recognized
consultants such as SRK in Cardiff, England.
 
The Company has decided to size the facilities for a flow of 4.6
million tons ore per year, in order to keep within the environmental
permit's limit of 5 million tons per year and to thereby make
possible, through normal efficiency improvements, to reach 5 million
tons within a few years, without additional investments. The design
and depth of open pit is optimized based on a gold price of 650
USD/oz. All feasibility studies are based on current metal prices and
exchange rates as of February 1, 2008. The project includes all
operations from mining to finished gold bars, so-called dore bars.
The gold bars are then sold for final purification to external
refineries. The cost of sale and refining is typically under 1% of
the metal value, and thus 99% of the value is handled within the
project.
 
- Feasibility studies, including mining in both open pit and
underground mine, show that we have a project with a long life span,
and in relation to the size of the investment, a quick recovery of
investment. With our own processing plant in place we also improve
our opportunities to develop other profitable projects along the gold
line. Only grades confirmed by analysed drill core have been used in
the study, which means that the higher grades found at the test
mining and other large-scale tests which have shown 30-82% higher
grades than the corresponding drill core analyses, have not been
included in the calculations. We have, however, included calculations
in the sensitivity analysis how the higher grades affect the project.
Our conclusion, based on results from the test mining etc. is that it
will be possible to achieve higher grades in future production, and
thereby larger quantities of produced gold. The waste rock that needs
to be removed in the open pit in order to reach the ore in large
parts carries gold, although the grades are distributed too unevenly
for a complete calculation of the resource, but this signifies a
potential for a longer life span and a lower waste rock/ore ratio,
says Karl-Åke Johansson, MD."Link to feasibility study, main report"
 
 
Further geological work in Fäboliden will now be concentrated to
increasing the known and indicated mineral resource through some
complementary drilling, especially within the delineated volume. The
Company's estimate is that at least 10 million tons can be upgraded
to the indicated category, and thereby be included in an updated
feasibility study later this year. Other initiatives are also planned
to investigate the grades of the deposit through large-scale testing.
The Company has been granted permission, in accordance with the
environmental law, from the Environmental Court of Umeå, for an
activity which includes establishment and operation of a mine and
processing plant in Fäboliden, which is included in the feasibility
study. The permit opens the possibility to process gold ore from a
larger mining area without investing in new processing facilities. An
important part of the permit is for a sand depot, which will minor
additions can be used for long-term production. The permitting
process for a tailings dam is very time consuming and costly, and the
Company feels that a permitted tailings dam is a major asset for a
long term player in the area. The permit has been appealed to the
Supreme Environmental Court by three people living there during
vacations and by Naturvårdsverket (the Environmental Protection
Agency). Naturvårdsverket has only appealed certain technical
solutions and the safety of the after-process, but not the projects
permission per se. Negotiations in the Supreme Environmental Court is
scheduled for the end of May.
The deposit in Fäboliden is located along the Gold Line in
Västerbotten. Lappland Goldminers has many interesting projects on
the Gold Line, with great potential to be developed into profitable
mines.
About Fäboliden
Fäboliden, the Company's "flagship" and largest deposit, is located
on the Gold Line in the municipality of Lycksele. The Company will
establish a central processing plant to extract gold and silver. The
facility is built to concentrate ores from the Gold Line, and the end
product is doré bars to be sold.
For additional information:

Karl-Åke Johansson, CEO                                 Tomas
Björklund, Board Member
Ph. +46 950 275 01, +46 70 625 22 57                Ph. +46 70 662 35
35
karl-ake.johansson@lgold.se                                 
tomas.bjorklund@lgold.se
 
Also see: www.lapplandgoldminers.com 
 
About Mangold Fondkommission: www.mangold.se
 
 
 
 
 
Lappland Goldminers AB  is an exploration  company, and, through  the
acquisition of  the  gold mine  and  processing plant  Pahtavaara  in
Finland, also a producing  mining company. The  company is listed  on
the market  place "First  North" under  the name  GOLD, with  Mangold
Fondkommision AB as the Certified Adviser, as well as the OTC list of
the Oslo exchange. Lappland Goldminers  has secured a number of  gold
deposits  along  the  so-called  Guldlinjen  ("The  Gold  Line")   in
Västerbotten. The  Company's strategy  is  to develop  a  profitable,
producing gold company with a  centrally located processing plant  in
Fäboliden, Sweden, in the Haveri  area in Finland, and Pahtavaara  in
northern Finland, which is supported by ore from one or several mines
either through the Company's own exploration or alternatively through
acquisitions.
The company is a member of SveMin, the trade association for mines,
minerals and metal producers in Sweden (formerly called the Swedish
Mining Association) and follows SveMin's reporting rules for public
mining and exploration companies.

Attachments

FS April 2008 Press release PDF