GOTHENBURG, Sweden, Oct. 11, 2002 (PRIMEZONE) -- Riddarhyttan (Stockholm:RHYT):
-- New, significant international institutional shareholder base
is a strong vote of confidence in Riddarhyttan
The Board of Directors is pleased to announce a program to accelerate assessment and financing alternatives for its 100% owned Suurikuusikko deposit in Finland. Three key developments have made this acceleration possible.
The first development has been the success of the company's exploration programs. Our exploration efforts to date have consistently expanded the resource base * and appear to have successfully outlined an economically viable mine composed of an open pit and a longlife underground operation. Shareholders might remember that earlier assessment had indicated an open pit mine, with a limited underground mine.
Secondly, there is growing confidence that the increase in gold price to the $320/oz range enjoyed to date in 2002 will be sustainable in the longterm. Strong investment demand, declining gold production and reduced producer hedging have helped create a positive gold price environment. In turn, the higher price has had a positive impact upon the value of the Suurikuusikko project.
Thirdly, the company and its prime asset have enjoyed the benefit of a much strengthened shareholder base thought the addition of institutional share holders in this past summer's successful private placement financing. Riddarhyttan's chairman, Mr. Jaan Kaber commented "We are delighted with the international investor interest shown in Riddarhyttan. Over the past few months North American and Asian institutions have accumulated more than a 15% ownership in the company."
Based upon these developments, three initiatives are underway. First is the exploration program. Management is confident that more resource ounces will be added with continued exploration programs. Managing Director, Mr. LarsGoran Ohlsson mentioned, "More than 98% of the more than 300 holes drilled to date along the Suurikuussikko Shear Zone have encountered gold and the mineralization remains open to depth with no signs of pinching out. "
At this stage, to maximize value for its shareholders, management believes that the exploration program should be reconfigured to search for ore zones that are closer to the surface. Such zones would serve to expand annual production, rather than simply extend the life of what already appears to be a longlife mine life.
The second initiative involves the further study of development options for Suurikuusikko. The third initiative includes the formal assessment of financing options for the accelerated production decision for the mine. Management believes that these will help maximize shareholder value at this stage of the project.
Adds Riddarhyttan's chairman, Mr. Jaan Kaber. "This is an important step for the company, one that should signal to our shareholders, to the Finnish government and to the international mining community the promising future for gold mining at Suurikuusikko".
Riddarhyttan Resources AB is an exploration company concentrating on deposits of base and precious metals in the Scandinavian countries. The company's primary business concept is to acquire, either by means of exploration or acquisition, new mineral deposits that, through detailed exploration, can be enhanced into minable ore. At the Suurikuusikko deposit (Finland), which is Riddarhyttan's most advanced project, the tonnage (59% "indicated" and 41% "inferred resources") amounts to 8,3 million tons, with 6,1 grams gold per ton (approx. 1,6 million ounces of gold).