Sweden typically flies under the radar of most North American investors, despite impressive mining credentials that date back to the tenth century. The country is Europe’s leading mining nation, accounting for 91% of the continent’s iron ore, 9% of the copper, and 24-39% of its lead, zinc, silver, and gold.
Sweden’s Boliden, which owns Garpenberg, is its largest mining company, but the country is also home to projects being explored by Lundin Mining and Agnico Eagle Mines. That said, international investment in exploration is still extremely limited – deterred by the notion of high taxes, an active environmental movement, and elevated labour costs.
District Metals is one of a handful of international exploration companies that are actively advancing projects in the country. In an interview with Proactive, District CEO Garrett Ainsworth shares his experience working in the Nordic nation and why savvy investors should be looking closer at opportunities in the region.
Sweden is off the radar for a lot of resource companies – especially juniors. What attracted you to the country in the first place?
Garrett Ainsworth (GA): We searched for a year and half around the world looking for a promising mineral property, and we jumped on the Tomtebo Property in the Bergslagen Mining District of south-central Sweden because this is where exceptionally large and high grade polymetallic deposits lurk. The world class Falun and Garpenberg Mines are both stellar analogues of what we are looking for in Sweden, and Tomtebo is sandwiched in between both of these elephants. Before we acquired Tomtebo in June 2020 the last significant exploration work was conducted in the early-1970’s, which underpins the opportunity for District Metals to utilize modern systematic exploration to make the next big discovery in the Bergslagen.
Apart from the immense metal endowment of the Bergslagen, it didn’t take much research to reveal that Sweden is a top tier jurisdiction to conduct mineral exploration and mining. The mining history dates back to 400 B.C. where the culture consisted of mining in the winter and farming in the summer, and the iconic Swedish homes sourced their red and yellow pigments from the Falun Mine. Today the mining industry in Sweden has strong support from the geological surveys, the government, and the public. Sweden also provides a stable political environment, low corporate taxes, the ability to work year-round and a streamlined process for getting permits.
The well-developed infrastructure consists of an extensive road and rail network, deep seaports, several metal smelters in the Nordic region, and low cost power. The financial benefits of Sweden’s infrastructure are felt from exploration through to mining and make for a very competitive advantage.
Boliden and Lundin Mining both operate world class polymetallic mines and have a strong presence in Sweden. A significant polymetallic discovery in the Bergslagen would likely garner attention from these major mining companies, which are in a financial position to execute on acquisitions that suit their corporate objectives. The presence of potential strong suitors is an important consideration when entering any jurisdiction.
Despite flying under the radar, Sweden has been mining continuously for centuries. Are there going to be more company-making deposits to find?
GA: Without a doubt there will be additional significant polymetallic deposits discovered in Sweden, and increased exploration activity will speed up the timeline on these said discoveries. Experience at existing tier one polymetallic mines such as Garpenberg and Zinkgruvan tells us that the best place to discover a “company-making” deposit is where very old historical mines exist, which was part of the selection criteria that led us to acquiring our Tomtebo Property.
Historic mining was commonly small-scale, not just in terms of how the mines were operated, but also in terms of how geologists were exploring around the old mines. Different ore bodies were commonly viewed in isolation as separate mines. These days, we realize that we are dealing with very large polymetallic mineralizing systems, and that historic exploration was often only conducted within tiny parts of these systems, in particular at depth. Arguably, the exploration model has gone from a turtle perspective to an eagle perspective in the last few decades.
In the 1990’s the Garpenberg Mine was running out of ore and faced a shut down. Boliden tasked Rodney Allen and a team of geoscientists to discovery additional polymetallic mineralization to keep the mine going. Through perseverance, new interpretations on the geological and structural data, and down-hole electromagnetic surveys several significant blind deposits were discovered. Historical exploration had never been conducted on such a comprehensive front, and the result converted Garpenberg from near closure to a tier one asset for Boliden.
The takeaway here is that today’s better understood deposit model and the use of modern exploration methods has solid potential to discovery a world class polymetallic system.
Tell us more about the Bergslagen district where the Tomtebo project is located. From a geological standpoint, what makes the Bergslagen district so attractive?
GA: The Bergslagen District is composed largely of supracrustal rocks dominated by felsic metavolcanic successions with limestones and calcsilicates, along with pre- to post-tectonic intrusive rocks located in south central Sweden. The region was folded and metamorphosed to upper amphibolite facies during the Svecofennian orogeny (1.9 to 1.8 Ga).
The district hosts thousands of mineral occurrences and historic mines including polymetallic silver-zinc-lead-gold-copper sulphide and iron oxide deposits, iron oxide skarn and apatite, banded iron formation, manganese oxide, and subordinate granite-pegmatite–hosted molybdenite and tungsten skarn deposits.
The Bergslagen contains world class polymetallic deposits such as Garpenberg and Zinkgruvan that are often only given brief mentions in reviews due to their atypical nature. These polymetallic deposits are difficult to pigeon-hole into text book classification schemes that geologists like to apply. While there are similarities to a range of deposit types such as skarn, VMS and SedEx, the Bergslagen polymetallic deposits have a combination of characteristics that do not make them fit in very well. The same can be said for the gigantic polymetallic Broken Hill and Olympic Dam deposits that have been defined into a class of their own.
From a high level when you look at the massive metal endowment of the Bergslagen District in combination with numerous mineral occurrences and historical mines that haven’t seen modern exploration, it becomes a clear target for exploration and discovery for District Metals.
What’s your experience been like from an operational standpoint, being able to source labour and securing the necessary permits?
GA: Part of the due diligence on moving into Sweden delved into operational and permitting risk where no red flags were identified. Given the long history of mining in Sweden a strong network of skilled labour and technical professionals has been established from which District Metals has already benefited. Road and trail networks across the Bergslagen have avoided the use of helicopters, which are good at burning through exploration dollars that are best applied on the ground.
Occasionally I’ve been asked if Sweden is an expensive country to operate in. My answer remains “not at all.” Labour costs are higher, taxes are reimbursed, but the infrastructure levels the playing field. All in drilling costs from our recent program at Tomtebo were approximately C$300/meter, which compares to C$400-$600/meter for northern parts of Canada and C$100-$200/meter for more southern parts of Canada.
Thus far we have permitted airborne and ground geophysical surveys and a 5,000m drill program at Tomtebo, which only took six weeks or less for each permit. In Sweden there is a form for everything, and that makes the process very straightforward. District Metals’ country manager, Hein Raat, and GeoVista Consulting have decades of permitting experience, which they executed on as part of an efficient and well communicated process that yielded all of our necessary permits in a timely fashion.
In your experience, how supportive is Sweden’s government of mining activities? Are there rules and regulations in place to help protect multimillion-dollar exploration investments?
GA: In February 2020 I conducted my due diligence visit in Sweden, and I met with the Geological Survey of Sweden (SGU) in Malå, the Mining Inspectorate and GeoVista in Luleå, and other related consultants in Stockholm. My takeaway was that Sweden is an even better jurisdiction than I had previously thought.
The SGU is a governmental agency that is tasked with the assignment to support and provide services to private exploration companies whether they be domestic or foreign. The SGU stores enormous amounts of historical exploration data that we have used to review other numerous projects, and to plan on our own exploration programs at Tomtebo. There is a requirement to submit exploration data, so copious amounts of information are available from previous exploration work. The SGU’s drill core archive in Malå is also an important source of information because new discoveries often occur in previously explored areas or around historical mines.
The government updated their Swedish Mineral Strategy in 2014 with the aim to maintain and strengthen Sweden’s leading position as the European Union’s leading mining and mineral nation, which encompassed a commitment from politicians and decision makers to ensure a positive framework for the industry. Sweden’s mineral legislation is clear and transparent and protects the rights of the mineral license holder while allowing for an efficient permitting process.
Lastly, Business Sweden is jointly owned by the Swedish state and the Swedish business sector with a mandate and a mission to help international companies gain access to the Swedish market, which is an initiative that has been of great assistance to District Metals.
Sweden has come a long way since the 1990’s when foreign companies were not allowed to hold mineral licenses, which has resulted in vast tracks of ground that remain underexplored.
Are there any final thoughts that you’d like investors to take away from your experience working in Sweden?
GA: My experience operating in Sweden with District Metals has clearly exceeded my expectations on numerous fronts. I believe that the Bergslagen will eventually become a crowded district given all of its discovery potential, and that is why we continue to acquire mineral properties within this district. In July 2021, we acquired the Gruvberget and Svärdsjö Properties that are excellent additions to our flagship Tomtebo Property where we will follow a similar path of exploration in hopes to discovery the next Garpenberg.
