Northland Resources Inc. - QwikReport

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Sahavaara

Location: Norrbotten Province, Northern Sweden
Minerals: Iron
Ownership: 100% ownership of an exploration permit
Status: Advanced Exploration -- part of Kaunisvaara PEA

Sahavaara Pit Model

Overview
The known magnetite body at Sahavaara measures approximately 1.3 km in length, at least 700 metres in depth and 50 metres in average width. Following drilling and compilation of past exploration data, we announced a NI 43-101 compliant resource estimate for Sahavaara (refer to press release dated April 16, 2010). The resource, modeled using a cut off of 10% iron (Fe) is:

Total Measured resources are 30.2 million tonnes, with an average grade of 42.9% Fe.
Total Indicated resources are 56.6 million tonnes, with an average grade of 38.14% Fe.
Total Inferred resources are 34.7 million tonnes, with an average grade of 37.28% Fe.

The results placed more than 50% of the resource in the "Measured" category.

Supplying the Kaunisvaara Mill Complex
Northland's vision is to develop the Kaunisvaara Mill Complex, a centralized processing facility that would take feed from several iron ore projects, including Sahavaara, Tapuli and Pellivuoma, thereby extending the life of the facility and distributing capital costs over greater accumulated production. The combined Measured and Indicated iron resources at Tapuli, Sahavaara and Pellivuoma total 249.68 Mt, and the Inferred iron resources are 89.74 Mt. Metallurgical test results show that a high-grade, high-quality iron concentrate can be produced from the iron mineralisation at Sahavaara that is compatible with the iron products that can be produced from Tapuli and Pellivuoma.

Property History
Sahavaara was drilled by the Swedish Geological Survey (SGU) in 1967. The SGU completed a rough resource estimate (non NI 43-101 compliant) on the basis of their drilling which tested down to 750 meters. The SGU established that a significant magnetite body was present containing additional by-product copper credits. Little further work was done, however, until Northland acquired the project in 2004.

Northland has systematically drill-tested the magnetite body using large diameter core where possible. Our geologists have also re-logged and re-sampled the historic core stored in the SGU core archive. The large diameter core also provided sufficient material for initial metallurgical test work and completion of a NI 43-101 compliant resource calculation in May, 2006.
During the spring of 2007, Northland hired a local excavation contractor to clear the overlying glacial till and prepare the access ramp for the start of the underground phase of a bulk sample.

After completion of an access ramp to the magnetite, the contractor blasted a 50 meter long horizontal tunnel within the magnetite from which a 2,000 tonne bulk sample of material was collected. A representative sample of this material was then sent to the metallurgical testing laboratory (SGS Group) in Ontario, Canada.

During the 3rd quarter 2008, the Company completed bulk sampling at Sahavaara, by drilling 30 holes, totaling 3,726 metres.

Additional metallurgical drill core was taken during 2008 to provide a representation of all the ore types in the resource and more definitive metallurgical testing took place at GTK in Finland during 2009.

Portal From Above Click to Enlarge	Bulk Sample Drift Click to Enlarge
Cone and Quartering Click to Enlarge	Loading Containers Click to Enlarge

Geology and Mineralization
Sahavaara occupies the same NE-SW trending shear which hosts the Tapuli deposit only 4 km to the south. The magnetite deposit occurs as a continuous "seam" located between a hanging-wall quartzite and footwall graphitic schist. The ore body is enveloped by three types of skarns. Minor remnants of skarn-altered dolomite occur within the deposit and likely reflect the original protolith. Contacts between the host rocks, skarn and mineralization are predominantly tectonic. There are two preferred fault orientations, the first parallel to the NNE-SSW striking metamorphic foliation and a second which strikes NW-SE with steep to moderate dips.

The bulk of the magnetite mineralization consists of one main lens and a smaller adjacent mineralized lens. The main lens has a NNE-SSW strike, dips 50°-70° west, plunges to the north and is concordant with the host sedimentary rocks. The lens has been delineated at surface over a strike of 1,300 meters with an average true width of 52 meters. At a down-dip distance of 550 meters, the deposit has been traced for 600 meters along strike with an average width of 43 meters. The footwall rock, immediately below the skarn unit, is a graphitic schist, rich in pyrrhotite and lesser amounts of pyrite with some local chalcopyrite mineralization with elevated concentrations of copper. The mineralization is generally open down-dip below the limits of the known resource; however, the vertical extent of the deposit is constrained to the south due to the northerly plunge of the ore body.

The adjacent lens, Södra (South) Sahavaara, is located to the south and en echelon to the main zone of mineralization. Södra Sahavaara averages about 20 meters in thickness and is discontinuous along strike for 1,000 meters. Lithology, mineralization and attitude of the mineralized horizon are similar to the main Sahavaara zone.

The main minerals in the ore zone are magnetite, serpentine, pyrrhotite, pyrite, and tremolite. Magnetite is currently the main mineral of economic interest in the Sahavaara deposit occurring as massive to semi massive mineralization gradational to banded mineralization near the footwall. Chalcopyrite occurs throughout the mineralized body as sporadic disseminations and as narrow veins. The amount of chalcopyrite is generally low yielding an average of 0.08% Cu within the mineralised ore body.

Figure 1
Click to Enlarge

Figure 2
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Metallurgical Testwork
In early 2007, Northland collected a 2,000 tonne underground bulk sample, a portion of which was analyzed by SGS metallurgical laboratory in Canada. Late in 2007, Corus Group R&D (Netherlands) completed a successful pelletizing test on 2.5 tonnes of iron ore concentrate generated by the bulk sample program. The results demonstrate that the pellets made from the Sahavaara concentrate can fulfill or exceed all of the necessary chemical and physical characteristics of commercial-grade iron ore pellets.

The pellets returned the following chemical analysis:

Element	Fe	Al₂O₃	SiO₂	MgO	TiO₂	CaO	MnO
Sample 1	65.6%	0.38%	1.19%	4.23%	0.09%	0.07%	0.17%
Sample 2	65.6%	0.39%	1.19%	4.27%	0.09%	0.07%	0.18%

The pellets were found to be of excellent quality, with high Fe, low SiO2 and Al2O3. In addition, the sulphur analysis was found to be low at 0.008%.

During the 1st quarter 2009 additional metallurgical testing and process development was undertaken at GTK in Finland on drill core samples combined to represent the ore types to be expected across Sahavaara. The testing aimed to see if the levels of Fe could be elevated and the levels of MgO could be reduced, and to provide as improvements to the process conditions by reducing reagent consumption and the time for flotation.

The successful testing produced concentrates with typical assays shown below:-

Element	Iron Fe	Alumina Al₂O₃	Silica SiO₂	Magnesia MgO	Titanium TiO₂	Lime CaO	Manganese MnO
Concentrate	69.1%	0.28%	0.95%	2.6%	0.09%	0.04%	0.13%

Additional testwork is contemplated using the improved concentrate quality with higher iron content and lower MgO content, probably blended with similar concentrates from the other NRI projects.

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This page was created on Wed Sep 8, 2010 at 4:50:51 PM Pacific Time.