Lappland Goldminers AB (publ): Interim report January - December 2009

Updated feasibility study for Fäboliden initiated and highest quarterly gold
production achieved at Pahtavaara since start-up by Lappland Goldminers.




Fourth quarter 2009

  * Sales were 47,8 MSEK (3,4 MSEK)
  * Result before depreciation was -10,7 MSEK (-10,9 MSEK)
  * Net loss was -21,5 MSEK (-16,4 MSEK)
  * Basic result per share was -0,26 (-0,26)
  * Goldproduction was 203 kg (27 kg)


January - December 2009

  * Sales were 121,4 MSEK (6,5 MSEK)
  * Result before depreciation was -61,9 MSEK (-29,8 MSEK)
  * Net loss was -87,9 MSEK (-35,6 MSEK)
  * Basic result per share was -1,05 (-0,57)
  * Goldproduction was 680 kg (65 kg)


Comments by CEO, Kjell Larsson


A major step on our growth strategy has been taken during the fourth quarter
with the start of a comprehensive update of the feasibility study for the
Fäboliden project, done by the international engineering company, Golder
Associates. With the highest quarterly production from Pahtavaara during the
fourth quarter of 203 kgs and the full year production of 680 kgs of gold by the
group we have reached a tremendous important milestone for the company. The next
milestone was when we made the first assessment of the gold mineral resources in
Ersmarksberget. We are now continuing the surface drilling within our mining
concessions in both Pahtavaara and Ersmarksberget and we are optimistic that we
will extend the resources at both sites.


Highlights during the fourth quarter


  * Lappland Goldminers achieved its highest quarterly gold production from
    Pahtavaara and 203 kgs were produced.



  * The updated feasibility study at Fäboliden was initiated and Golder
    Associates was contracted to complete and sign the study. The study is
    expected to be finalized during the third quarter 2010.



  * The company's first mineral resource estimation within the Ersmarksberget
    mining permit was completed. Measured and indicated mineral resources to
    date are 448,000 tonnes containing 2.85 grams of gold per tonne. The
    drilling program, aimed at increasing the resources, continues and is
    expected to be finalized during the second quarter 2010.



  * On December 10, 2009, the company announced that a process for listing the
    company's shares on NASDAQ OMX Nordiska Börs will be initiated. A listing on
    the NASDAQ OMX Nordiska Börs is expected to increase the liquidity of the
    share, attract ownership by institutional investors and give better access
    to the capital markets.



  * On December 10, 2009, the company also announced the appointment of Anders
    Haker as Chief Financial Officer.


Subsequent events


  * On January 19, 2010, the company announced the appointments of the members
    of the Nomination Committee for the Annual General Meeting 2010. The members
    are Ulf Ericsson, appointed by the AGM 2009, Peter Edwall, representing the
    shareholder Ponderus Invest AB, Tomas Björklund, representing himself as a
    shareholder and Sven Rasmusson, representing the shareholder Ing-Marie Fraim
    Sefastsson. Sven Rasmusson was appointed Chairman of the Nomination
    Committee by the Nomination Committee.



Pahtavaara
Mining operations performed well during the fourth quarter 2009 and Pahtavaara
achived its highest quarterly production since the start-up of operations in the
fourth quarter 2008. The ore grades during the quarter were initially lower than
2 grams per tonnes but increased during November and December as higher grade
areas were mined. The average grade for the quarter exceeded 2 grams per tonnes
of ore.


The annual production was marginally below the plan for the year, however, the
recoveries increased to 87 percent from a planned 85 percent. Mining production
started at a low level at the beginning of the year. When the mine opened, mill
feed was mixed with lower grade waste material. However, with continuous
underground mining production, from April 2009 to the end of the year, tonnages
and grades have steadily improved.


Underground core drilling has been carried out since April 2008 in order to
increase the ore reserves and the mineral resources. The surroundings of the
present mine are considered unexplored by the company and for that reason
systematic exploration around the open pits was initiated in June 2009. Four
partly earlier explored targets adjacent to the open pits were drilled during
the second half of 2009. Totally 5 700 meters of surface drilling was done. The
majority of the drilling, 3 900 meters, was concentrated on a mineralization
called Länsi  (West) located north-west of the old open pits.


The results from the exploration campaign are under compilation and planned to
be presented during the second quarter of 2010. Focus on exploration 2010 is to
continue the drilling to delineate the Länsi mineralization which still is open
both to the depth and to the north-west. Further exploration is planned within
the exploration licenses that the company has around the mining concession in
order to increase the existing mineral reserves and mineral resources, which are
expected to be depleted during the second quarter of 2011 if not increased. As
of December 31, 2009 the ore reserves at Pahtavaara are 678,000 tonnes
containing 2,79 grams per ton.


Ersmarksberget

During the quarter the company resumed the core drilling program towards depth
and strike of the indicated gold lenses on the Ersmarksberget mining lease. A
total of eight deep drill holes, totaling 3,500 meters, are planned before the
end of the second quarter 2010. The present verified measured and indicated
resources are 448,000 tonnes with 2.85 grams of gold per ton. The objective is
to significantly increase the mineral resources before opening of the mine. The
plan is to evaluate a possible start-up of mining operations as soon as the
drill results, pilot mining and metallurgical tests, have been analyzed and
completed. The information necessary for a decision is expected to be available
during the third quarter 2010. The mill, at the mine site, is well equipped for
future production and is running on standby mode to prevent it from
dilapidation. At the same time any excess water on site is treated in the plant.


During 2009 gold was extracted from a stock pile of previously mined material.
The quality of the material was uneven, with high contents of zinc, lead and
graphite which caused problems in the milling process. A total of 92,000 ton was
milled, with an average gold content of 1.5 gram per ton. A total of 94 kg of
gold was extracted, of which 45 kg was sold during 2009.


Fäboliden

A review of the April 2008 Feasibility Study for Fäboliden Gold Project was
undertaken during the fourth quarter 2009 by two internationally recognized
engineering companies. The two companies made a final presentation of their
findings in the middle of December 2009. One of the companies, Golder
Associates, was contracted in the middle of January 2010 to complete and sign an
updated Definitive Feasibility Study (DFS). The work is scheduled to be
finalized during the third quarter 2010. The DFS will include a mining plan and
evaluations of all financial parameters for the project. In parallel, Lappland
Goldminers will evaluate different financing options with the objective to
initiate construction works as soon as the DFS is available and financing has
been arranged.


The proven and probable reserves at Fäboliden are approximately 53,4 million
tonnes containing 1,12 grams of gold per tonne. The reserves and mineral
resources will be updated during 2010 in connection with the ongoing feasibility
study.


Outlook

The company expects to produce more than 800 kg of gold from the Pahtavaara
operations during 2010.


Financials


Income Statement

Sales increased significantly during the fourth quarter 2009 and reached SEK
47,8 million. This is a significant increase compared to the fourth quarter
2008 and previous quarters 2009. This is due higher gold production at
Pahtavaara and corresponding increasing sales. A total of 210 kgs were sold at
Pahtavaara during the quarter at an average price of USD 1 012 per ounce. For
the full year a total of 512 kgs were sold at Pahtavaara and 45 kgs at
Ersmarksberget.


The Pahtavaara operations contributed with a profit before depreciation of SEK
5,1 million during the quarter. However, the profit was offset in the group by
environmental charges at Ersmarksberget of SEK 4,9 million and corporate
overhead charges of SEK 5,5 million. A revaluation of the forestry assets owned
by the company negatively affected the earnings by SEK 3,8 million.


The environmental charges at Ersmarksberget are due to the mill running on
standby mode to prevent it from dilapidation and treatment of excess water from
the old mining site.


Depreciation charges during the quarter of SEK 10,3 million and SEK 22,0 million
for the full year are primarily due to depreciation of capitalized ore
development at Pahtavaara. Depreciation charges are calculated using of a unit
of production method in relation to the existing ore reserves.


Net loss for the fourth quarter 2009 was SEK 21,5 million compared with a net
loss of 16,4 million for the same quarter 2008. The increased loss is mainly due
to increased depreciation charges at Pahtavaara and the revaluation of the
forestry assets. The increased net loss for 2009 of SEK 87,9 million compared to
a net loss of SEK 35,6 million, for 2008, is mainly due to the start up costs of
production at Pahtavaara during the first half of 2009, the related depreciation
charges following the start up and higher environmental costs at Ersmarksberget
of SEK 22,4, million,.


Cashflow

The net change in the cash position during the quarter was negative SEK 36,0
million. The Pahtavaara operations generated a positive cashflow from operations
of SEK 5,1 million during the quarter but this was offset by environmental
charges at Ersmarksberget of SEK 4,9 million combined with corporate charges of
SEK 5,5 million resulting in a negative cashflow from operations of SEK 7,8
million.


Total capital expenditures during the quarter were SEK 10,2 million of which
Pahtavaara invested SEK 9,2 million. This consists primarily of ore development
when the operations are moving into new areas within the existing mine.


The cashflow for the quarter was also negatively affected by working capital
changes of SEK 21,9 million. The changes are primarily due to increased accounts
receivables of SEK 15,0 million.


For the full year 2009 the change in cash position was an increase of SEK 12,0
million. The company financed the ramp-up of production at Pahtavaara,
environmental charges at Ersmarksberget and corporate charges by issuing equity
of SEK 167,9 million. The ramp-up of operations also required increased working
capital of SEK 35,9 million. Capital expenditures were SEK 39,3 million for the
year.


Other


Employees

The company and subsidiaries have 62 employees (2008 - 41). In addition to this,
the Company engages consultants and contractors for various projects on a
continuing basis. Altogether the company and subsidiaries engage the equivalent
of 109 (2008 - 100) full time employees.





Reporting dates


 Interim report January-March 2010          May 19, 2010

 Interim report January-June 2010           August 12, 2010

 Interim report January-September 2010      November 11, 2010





Annual General Meeting

Lappland Goldminers' annual general meeting is planned for May 19, 2010 in
Stockholm. An information meeting, following the AGM, is planned for May
20, 2010 in Lycksele.





Dividends

The Board of Lappland Goldminers intends to propose to the annual general
meeting that no dividends will be paid for 2009.





Annual Report

Lappland Goldminers' annual report will upon request be sent by mail to the
shareholders in May 2010. The annual report will also be found on the Company's
web site with possibility for downloading and printing.





Accounting principles

The accountings has been prepared according to (ÅRL- Annual Accounts Act), RFR
2.1 "Reporting for legal entities", International Financial Reporting Standards
(IFRS) and interpretations by International Financial Reporting Interpretations
Committee (IFRIC), as adopted by EU, and according to RFR 1.1 "Complementary
reporting principles for groups". The parent company also applies to RFR 2.1
"Reporting for legal entities" and Årsredovisningslagen (ÅRL - Annual Accounts
Act).


This report has been prepared in compliance with IAS 34 - Interim Financial
Reporting.
Same accounting principles have been applied as in the last issued Annual
Report.
For detailed information regarding accounting principles, refer to Annual Report
2008.


The annual report and the group report have been approved for issue by the Board
on April 8, 2009. The group income statement and balance sheet and the parent
company income statement and balance sheet were adopted at the Annual General
Meeting on May 28, 2009.





                          Lycksele, February 19, 2010

                                 Kjell Larsson

                            Chief Executive Officer





The interim report for the period January - December 2009 has not been reviewed
by the company's auditors.


For further information please contact:

Kjell Larsson, CEO Tel: 0950-275 06, 070-385 03  57 E-mail:
kjell.larsson@lgold.se <mailto:kjell.larsson@lgold.se>
Anders Haker, CFO, Tel: 0708-108559, E-mail:anders.haker@lgold.se
<mailto:anders.haker@lgold.se>
Ulf Ericsson, Chairman of the Board Tel: 070-529 09 59,
E-mail:ulf.ericsson@lgold.se <mailto:ulf.ericsson@lgold.se>



The full press release including tables and chart can be downloaded from the
following link.





[HUG#1386320]