GOTHENBURG, Sweden, Aug. 19, 2005 (PRIMEZONE) --Riddarhyttan Resources:
- Agnico-Eagle announced in May that it is making a recommended exchange offer to the shareholders of Riddarhyttan Resources which implies that for each Riddarhyttan share 0.1137 Agnico-Eagle share is offered.
- An estimate using 2.0 g/t as cut off and parameters from a variography study shows that the mineral resources in Central Suurikuusikko (Finland) are: - 2.5 Mt (measured category) grading 6.2 grams of gold per tonne (0.50 million ounces).
- 9.3 Mt (indicated category) grading 5.1 grams of gold per tonne (1.53 million ounces).
- 12.5 Mt (inferred category) grading 4.2 grams of gold per tonne (1.70 million ounces).
-- Drill holes confirm that the recently discovered Central Rouravaara Zone is of a significant size.
- 15.2 m core section (true width approx 9.5 m) grading 6.4 grams of gold per tonne at a depth of 200 m (drill hole SUBH 05023).
- 24.4 m core section (true width approx. 16.0 m) grading 9.6 grams of gold per tonne at a depth of 410 m (drill hole SUBH 05024).
- 20.9 m core section (true width approx. 12.5 m) grading 5.0 grams of gold per tonne at a depth of 350 m (drill hole SUBH 05034).
-- Drill holes increase and upgrade the resources in the Main Deposit.
- 8.8 m core section (true width approx. 6.0 m) grading 7.9 grams of gold per tonne at a depth of 430 m (drill hole SUBH 05010).
- 9.2 m core section (true width approx. 5.7 m) grading 8.1 grams of gold per tonne at a depth of 380 m (drill hole SUBH 05017).
- 9.4 m core section (true width approx. 6.5 m) grading 7.2 grams of gold per tonne at a depth of 280 m (drill hole SUBH 05022).
- 12.9 m core section (true width approx. 6.7 m) grading 10.1 grams of gold per tonne at a depth of 530 m (drill hole SUBH 05025).
- 28.9 m core section (true width approx. 24.0 m) grading 6.3 grams of gold per tonne at a depth of 725 m (drill hole SUBH 05025).
- 11.1 m core section (true width approx. 7.5 m) grading 7.5 grams of gold per tonne at a depth of 600 m (drill hole 05030).
- 32.6 m core section (true width approx. 18.5 m) grading 6.9 grams of gold per tonne at a depth of 320 m (drill hole SUBH 05045).
-- Liquidity and short-term investments on June 30 amounted to KSEK 25,274 (58,071).
-- Turnover for the quarter amounted to KSEK 0 (0).
-- Result after tax for the quarter was KSEK -10,972 (-2,336).
-- Result after tax per share for the quarter was SEK -0.10 (0.02).This document is a translation of the original Press release in Swedish. In case of divergence, the Swedish version shall have precedence.
For figures and tables, please refer to attached complete press release.
AGNICO-EAGLE MINES LIMITED ANNOUNCED IN MAY A RECOMMENDED EXCHANGE OFFER TO THE SHAREHOLDERS OF RIDDARHYTTAN
Agnico-Eagle Mines Limited ("Agnico-Eagle") announced 12 May 2005 a recommended exchange offer to the shareholders of Riddarhyttan Resources for all of the outstanding shares of Riddarhyttan not already owned by Agnico-Eagle.
For each Riddarhyttan share, 0.1137 shares in Agnico-Eagle will be received. The offer valued each Riddarhyttan share at SEK 10.25 and represented a premium of 27.3 %, based on the closing price of the Agnico-Eagle share on the New York Stock Exchange and of the Riddarhyttan shares on the Stockholm Stock Exchange on 11 May 2005, the last trading day before the announcement of the offer. The board of directors of Riddarhyttan has unanimously recommended that Riddarhyttan shareholders accept the offer. The recommendation is supported by a fairness opinion provided by Standard Bank Plc. acting as financial advisor to the board of directors. For more information about Agnico-Eagle and the offer, please refer to the announcement from 12 May 2005. After the end of the quarter, the Swedish Financial Supervisory Authority has approved of and registered the offer document and Securities and Exchange Commission in the US has declared the registration statement filed by Agnico-Eagle effective. The offer document has been mailed to all directly registered Riddarhyttan shareholders and the acceptance period will be open until September 9, 2005. The Offer document is available on the web-page of Enskilda Securities, www.enskilda.se, and will be available on the web-page of Riddarhyttan, www.riddarhyttan.se, from Monday 22 August 2005 at the latest.
TONNAGE AND GRADE CALCULATION
To elucidate the criteria for classifying tonnage in Central Suurikuusikko in different categories (measured, indicated and inferred respectively) a variography study has been carried out by the external consulting firm Reserva International LLC, USA. The parameters* suggested by the variography study were used for classifying the resources in a calculation of tonnage and grades carried out by two external consultants**. The results of all drill holes in Central Suurikuusikko up to the beginning of July 2005 were included in the calculation (press release 2005-07-19).
Using a cut-off of two grams of gold per tonne, the measured mineral resources are estimated to 2.5 Mt grading 6.2 grams of gold per tonne (0.50 million ounces). Indicated mineral resources amount to 9.3 Mt grading 5.1 grams of gold per tonne (1.53 million ounces) and inferred mineral resources amounts to 12.5 Mt grading 4.2 grams of gold per tonne (1.70 million ounces).
If a one gram per tonne cut-off was used in the calculation the measured mineral resources are 2.8 Mt grading 5.7 grams of gold per tonne (0.52 million ounces). Indicated mineral resources amount to 11.4 Mt grading 4.4 grams of gold per tonne (1.63 million ounces) and the inferred mineral resources amount to 14.1 Mt grading 3.9 grams gold per tonne (1.78 million ounces).
A calculation using four grams of gold per tonne as cut off was also carried out. It resulted in 1.6 Mt measured mineral resources grading 8.0 grams of gold per tonne (0.42 million ounces), 4.8 Mt indicated mineral resources grading 7.1 grams of gold per tonne (1.11 million ounces) and 4.8 Mt inferred mineral resources grading 6.3 grams of gold per tonne (0.97 million ounces).
EXPLORATION RESULTS
For more detailed information about all holes drilled since the release of the first quarterly report of 2005 see text, tables and longitudinal sections in press releases 2005-06-01, 2005-07-19 and 2005-08-15.
The Ketola Zone is situated in the southernmost part of Central Suurikuuskko. It consists of two parallel sub-zones (A and B), where only the northern part of the B sub-zone has higher grades over viable widths. Since the publication of the first quarterly report 2005 two holes have been drilled to test the Ketola Zone (press release 2005-06-01).
The Etela Zonen has been defined as the gold-bearing zone between the Ketola Zone and the Central Zone in the Main Deposit (a distance of 350 metres). One hole has been drilled to test the zone since the first quarterly report was published (press release 2005-06-01).
The Main Deposit has been defined as the gold-bearing zones between section 7535800 and section 7537300. Approximately 80 percent of the estimated gold-bearing resources are located in these zones which -with minor interruptions- can be followed approximately 1,500 metres in the strike direction. The Main Deposit is characterized by several gold-bearing zones, the following being the most important: the Western Zone, the Central Zone, the Kuukkeli Zone, the Eastern Zone and the Southern Rouravaara Zone.
Since the first quarterly report of 2005 the results of fifteen holes, drilled to test the zones in the Main Deposit, have been published (press releases 2005-06-01, 2005-07-19 and 2005-08-15). All holes intersected mineralized zones. The most important results were obtained from following drill holes:
Drill hole SUBH 05007 (section 7536585) intersected, at a depth of 600 metres, the Western Zone which is represented by a 10.3-metre core section (corresponds to a true width of approx. 5.0 metres) grading 10.7 grams of gold per tonne. The mineralized core section (including adjacent low-grade sections) is 21.1 metres (true width approx.10.0 metres) grading 5.6 grams of gold per tonne.
Drill hole SUBH 05010 (section 7536545) intersected the Western Zone 2 at a depth of 430 metres where it is represented by an 8.8-metre core section (true width approx. 6.0 metres) grading 7.9 grams of gold per tonne. Also the Western Zone 1 was intersected by the drill hole. At a depth of 450 metres it has a width of approx. 10.4 metres. The drill core representing the mineralized zone is 14.9 metres grading 4.5 grams of gold per tonne. It includes two sub-intervals with higher grades: 5.0 metres grading 7.3 grams of gold and 3.7 metres grading 5.9 grams of gold per tonne respectively.
Drill hole SUBH 05016 was drilled in section 7536665. It intersected the Western Zone at a depth of 475 metres at which it is represented by a 9.2-metre core section (true width approx. 6.7 metres) grading 5.3 grams of gold per tonne.
Drill hole SUBH 05017 was drilled in section 7536865. At a depth of 380 metres it intersected the Eastern Zone which has a width of approx. 5.7 metres (9.2 metres core length) and a gold grade of 8.1 grams per tonne. The Central Zone, intersected at a depth of 410 metres, has a width of approx. 7.5 metres (11.8 metres core section) and a gold grade of 4.2 grams per tonne.
Drill hole SUBH 05022 was drilled in the same section (7536865). It intersected the Eastern Zone at a depth of 280 metres at which it is approx. 6.5 metres wide (9.4 metres core section) with a gold grade of 7.2 grams per tonne.
Drill hole 05025 (section 7536665) intersected, at a depth of 530 metres, the Western Zone which at this position is high grade (10.1 grams of gold per tonne). The true width has been estimated to approx. 6.7 metres (12.9 metres core length). The Eastern Zone was intersected at a depth of 725 metres. At this position the zone has a gold grade of 6.3 grams of per tonne and considerable true width (approx. 24.0 metres). The core section (28.9 metres) representing the zone includes two sub-intervals with higher grades: 16.1 gram of gold per tonne (6.8 metres core length) and 8.1 grams of gold per tonne (8.3 meters core length) respectively.
Drill hole SUBH 05030 was drilled in section 7536985. At a depth of 560 metres it intersected the Eastern Zone which at this position is approx. 8.7 metres wide (13.5 metres core section) and has a gold grade of 4.1 grams per tonne. The Western Zone was intersected at a depth of 600 metres. At this position it has a width of approx. 7.5 meters (11.1 metres core section) and a gold grade of 7.5 grams per tonne.
Drill hole SUBH 05045 (section 7536745) intersected at a depth of 320 metres the Eastern Zone and the Kuukkeli Zone which at this position touch each other. Together they have a true width of 18.5 metres (32.6 metres core length) with an average gold grade of 6.9 grams per tonne.
Drill hole SUBH 05053 was drilled in section 7536985. At a depth of 305 metres the Kuukkeli zone was intersected. It is represented by a 6.3-metre core section (corresponding to a true width of 3.4 metres) grading 7.9 grams of gold per tonne.
The Central Rouravaara Zone constitutes the direct continuation of the Kuukkeli Zone wherefrom it can be followed approximately 550 metres northwards to the Northern Rouravaara Zone. The results of fourteen holes, drilled to test the Central Rouravaara Zone, have been released since the publication of the first quarterly report 2005 (press releases 2005-06-01, 2005-07-19 and 2005-08-15). Some of the most important results are:
Drill hole SUBH 05023 (section 7537605) intersected at a depth of 200 metres the mineralized zone which at this position is represented by a 15.2-metre core section (true width approx. 9.5 metres) grading 6.4 grams of gold per tonne.
Drill hole SUBH 05024 was drilled in section 7537605. At a depth of approximately 410 metres it intersected the gold-bearing zone which is represented by a 24.4-metre core section (corresponding to a true width of approx. 16.0 metres) grading 9.6 grams of gold per tonne. If adjacent low-grade sections are included the mineralized core section is 29.5 metres grading 8.2 grams of gold per tonne.
Drill hole SUBH 05034, which was drilled in section 7537605, intersected at a depth of 350 metres the mineralized zone which at this position is approx. 12.5 metres wide (20.9 metres core section) and grades 5.0 grams of gold per tonne.
Drill hole SUBH 05035 (section 7537700) intersected at a depth of 180 metres the mineralized zone which, at this position, has a width of approx. 8.6 metres (13.0 metres core section) and a gold grade of 5.0 grams per tonne. The mineralized core section includes a 7.6-metre sub-interval (corresponds to a true width of 5.0 metres) grading 6.0 grams of gold per tonne.
The Northern Rouravaara zone, which can be followed from section 7537800 to section 7538500 (700 metres), constitutes a direct continuation of the Central Rouravaara Zone. It consists of three sub-zones (A, B, and C). The most significant one is the B sub-zone. Since the release of the first quarterly report of 2005 the zone has been tested by three drill holes all of which intersected the mineralized zone (press releases 2005-06-01, 2005-07-19 and 2005-08-15).
The Rimminvuoma Zone is the northernmost zone in Central Suurikuusikko. It can be followed approx. 1,000 metres towards the north from the Northern Rouravaara Zone. After the publication of the first quarterly report the zone has been tested by six drill holes (press releases 2005-06-01 and 2005-08-15). All holes intersected mineralised zones which however are narrow and low-grade.
PRELIMINARY FEASIBILITY STUDY
The Board of Riddarhyttan decided in December 2004 to begin the work with a feasibility study (press release 2005-04-18). Heino Alaniska is responsible for the mining part (open pit and underground) of the study while Thomas Lindholm is responsible for the process and water treatment parts. As Riddarhyttan and Agnico-Eagle have signed a technical service agreement, resources from Agnico-Eagle, as well as from several external consulting firms are involved in the study.
The first, preliminary phase of the feasibility study was planned to be ready during the summer. It has, however, been delayed partly because some of the sub-projects (press release 2005-04-18) have taken longer time than expected and partly due to the positive outcome of the exploration which will result in more drilling to upgrade the resources and require revision of the study. The goal is to have the preliminary feasibility study completed during the 3rd quarter of the year.
The preliminary feasibility study will be based on the resource calculation presented in this report and in press release 2005-07-19. As inferred resources not are allowed to be included in a feasibility study it should be underlined that only the parts of the measured and indicated resources which are considered to be mineable will be included in the ongoing study.
CONTINUED DRILLING AND WORKING CAPITAL
Riddarhyttan will continue to carry out exploration activities in the Suurikuusikko Area with unchanged intensity. After the end of the quarter, Riddarhyttan's subsidiary, Riddarhyttan Resources Oy, entered into an unsecured, guaranteed bank overdraft facility of EUR 1.6 million with Nordea Bank Finland Plc to satisfy its cash requirements in the near-term future. The bank overdraft facility matures on January 31, 2006 and may be terminated by Riddarhyttan at any time without penalty or notice. Interest at an annual rate of 0.60% on the facility amount is due and payable quarterly in advance. In addition, interest at an annual rate of 1.5% above one month euribor is due and payable montly in arrears on amounts outstanding.
RESULT AND FINANCIAL POSITION
The operating result for the group of companies was KSEK -11,492 (-2,379). The high other external costs are mainly due to advisory fees paid for financial and legal services and auditing in connection with the public offer made by Agnico-Eagle Mines Limited. The profit from financial items was KSEK 520 (44). Due to an increased exchange ratio SEK/EUR, the profit includes an exchange rate difference of KSEK 504 on other current assets denominated in EUR.
Cash and cash equivalents as at June 30 2005 amounted to KSEK 25,274 (58,071) and the cash flow for the six-months period ended June 30 2005 amounted to KSEK -32,798 (-1,749). A continued high exploration activity on the Suurikuusikko Trend has affected the cash flow negatively. Capitalized exploration expenditures for the investigations on the Suurikuusikko Trend amounted to KSEK 30,717 (6,377). The notes to the financial statements include details on other external costs incurred in the three-month period ended June 30, 2005.
THE RIDDARHYTTAN SHARE
No change in the number of outstanding shares has occurred during the three-month period ended June 30, 2005. Changes in the number of shares during the six-month period ended June 30, 2005 and the fiscal year ended December 31, 2004 are shown in a table below. The development of the price, and the turn-over, for the Riddarhyttan share in the three-month period ended June 30 2005 is shown in the diagram below. During this period, the share price increase by 31.1 % from SEK 8.20 to 10.75.
OTHER INFORMATION
The technical basic data in this press release has been compiled by Lars-Goran Ohlsson and Thomas Lindholm (Riddarhyttan Resources AB) who by SveMin, Foreningen for gruvor, mineral och metallproducenter, are registered as "Qualified Persons".
All analyses have been carried out by GTK's laboratory (accreditation code T025).
This document is a translation of the original Press release in Swedish. In case of divergence, the Swedish version shall have precedence.
SIGNING
Gothenburg August 19 2005 RIDDARHYTTAN RESOURCES AB The Board
AUDIT REVIEW
This interim report has not been subject to review by the auditors of the company.
FURTHER REPORTING DATED
Interim report, for the three-month period ended September 31 2005: November 16, 2005
Financial statement for the year ended December 31 2005: February 16, 2006
COMPANY INFORMATION
Riddarhyttan Resources AB (publ), Aurorum 30, 977 75 Lulea, Sweden CIN: 556534-7639 Phone: +46 (920) 758 97 Fax: +46 (920) 758 92 e-mail: info@riddarhyttan.se www.riddarhyttan.se
Riddarhyttan Resources AB is an exploration company with occurrences of precious metals in the Nordic Region of Europe. The primary business idea is, by means of exploration and acquisition acquire new occurrences, which through detailed exploration can be advanced to economic resources. At the Suurikuusikko deposit (Finland), which is Riddarhyttan's most advanced project measured mineral resources are estimated to 2.5 Mt grading 6.2 grams of gold per tonne (0.50 million ounces, indicated mineral resources amount to 9.3 Mt grading 5.1 grams of gold per tonne (1.53 million ounces) and inferred resources are estimated to 12.5 Mt grading 4.2 grams of gold per tonne (1.70 million ounces) (cut-off 2.0 g/t).
The full release: http://hugin.info/86971/R/1007305/155545.pdf