Kaukua

The Kaukua project is located ~160 kilometers northeast of Oulu in central Finland and is a PGE-nickel-copper-gold project.  The Kaukua project is Palladium One Mining Inc.’s (“Palladium One”) flagship Läntinen Koillismaa (“LK”) project in Finland. In 2020 EMX purchased a 2% NSR royalty over the Kaukua project (see Company news release dated February 28, 2020).

Mineralization at the Kaukua deposit is hosted by the Koillismaa Layered Igneous Complex (“KLIC”), a 2.4-2.5 billion year old layered mafic intrusive complex located in north-central Finland. The KLIC forms part of an east-west trending belt of similar intrusions and nickel, copper and PGE deposits that cross through Finland and into Russia. PGE-rich styles of mineralization were first recognized at Kaukua by Outokumpu Oy in the late 1980’s. The Geological Survey of Finland (“GTK”) commenced a focused research and exploration program in the area in 1996, drilling the Kaukua project for the first time in 2004, resulting in drill defined zones of PGE-rich mineralization.

Palladium One’s 2019 Technical Report1,3 outlined a pit-constrained mineral resource for the Kaukua deposit at a cut-off of 0.3 g/t palladium (Pd) summarized as (note “Pd Eq” is palladium equivalent)4:
 

Mineral Resource Estimate for the Kaukua Deposit - September 2019
ClassKtonnesPd g/tPt g/tAu g/tNi %Cu %Pd Eq g/tPd Eq oz
Indicated10,9850.810.270.090.090.151.8635,600
Inferred10,8750.640.200.080.080.13105525,800


The entirety of the Kaukua deposit’s pit-constrained resources are covered by EMX’s NSR royalty ground. EMX notes the Technical Report’s metal prices of US$1,100/oz palladium and US$1,300/oz gold are well below current spot prices. This embeds considerable upside exposure to increased metal prices in future years. The Kaukua Technical Report can be found at www.Sedar.com. The Kaukua deposit lies within the Kaukua Royalty property.

The Company’s Kaukua Royalty also covers multiple additional exploration targets including the majority of the “South Zone”, a drill defined zone of mineralization which occurs 500 meters south of the main Kaukua deposit. The Technical Report also highlights exploration potential to the east and west of the Kaukua deposit, concealed beneath shallow overburden.

Palladium One has made the Kaukua project an emphasis of their exploration efforts in Finland, and features the project on their website and in corporate presentations. Palladium One also announced plans for a 5,000 meter drill program that will further test the Kaukua project and other targets on the LK property2.

EMX, one of the leading holders of mineral rights and royalty properties in Fennoscandia, recognized the Kaukua opportunity during assessment of nickel-copper-PGE deposits throughout the region. The acquisition of the Kaukua Royalty is another example of the Company’s successful execution of its royalty generation business strategy, whereby EMX’s in-region expertise is leveraged to identify royalty acquisition and strategic investment opportunities. 

Note: It is the opinion of EMX that the acquisition of the Kaukua Royalty is not a material development for EMX, and therefore the requirement to file an independent technical report under National Instrument 43-101 does not apply in this case.

1See Palladium One news release dated September 9, 2019.

2See Palladium One news release dated February 18, 2019.

3“Technical Report for the Kaukua Deposit, Läntinen Koillismaa Project, Finland”, dated September 9, 2019.

From Table 1-1 of the Kaukua Technical Report, with explanatory notes that include: “CIM definitions have been followed for the Mineral Resources;  Bulk densities of 2.9 t/m3 have been assigned for all lithologies within the block model except the overburden which has a bulk density of 2.1 t/m3 assigned; The optimization used metal prices (in USD) of $1,100/oz for Pd, $950/oz for Pt, $1,300/oz for Au, $6,614/t for Cu and $15,432/t for Ni; Mining dilution and recovery factors have been assumed at 5% and 95% respectively; Pd Eq is the weighted sum of the Pd, Pt, Au, Ni and Cu grades based on the commodity prices as outlined; and  Errors may occur due to rounding to appropriate significant figures.”  EMX notes that recoveries and net smelter returns are assumed to be 100% for the Pd Eq calculation.