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. Last Updated: 07/27/2016

Greenland Nickel May Rival Norilsk

NUUK, Greenland -- A promising nickel find in minerals-rich Greenland may contain deposits rivaling those of Russia's giant Norilsk Nickel mine, exploration company Platinova Resources said.

Zinc, lead, silver, palladium and gold as well as diamonds have also been found on the arctic island, but no new discovery of a size justifying a resumption of mining had yet been made, managing director Erik Andersen said in a recent interview.

The Black Angel lead, zinc and silver mine at Maarmorilik on Greenland's west coast was closed in 1990 after 17 years of production. This summer, Canada's Falconbridge Ltd. is due to continue exploring for nickel in the Disko Bay area some 500 kilometers north of Greenland's capital, Nuuk, Andersen said. "That property's geological similarity is with the Norilsk Nickel copper-nickel-platinum deposit," he said. "The model is very attractive. The indicators are there for a very major deposit.

"It is a huge target. ? The potential gain is so enormous. There is a potential big prize at the end ? a discovery something like Norilsk," he said.

"That is what attracts continued investment ? but it is a very high-risk situation," Andersen said, noting that only small amounts of nickel had been found in the area so far.

The Platinova A/S unit, active in Greenland since 1986, was focusing mainly on zinc and diamonds, he said, adding that the prospects of finding big deposits of both minerals in Greenland were good.

"We have two very attractive zinc projects," Andersen said, referring to ore deposits in the north and northwest.

Platinova was also looking into the viability of reopening the Black Angel mine. "But the price of zinc right now is so desperately low that this is not economic at the present time," he said.

A price around $1,250 per ton would be needed to break even, he said. Zinc is currently trading around $1,045 a ton, after hitting a 5 1/4-year low of $918 at the start of 1999.

Regarding diamonds, Andersen said, "The indirect geochemical measurements in Greenland are extremely positive. There is extremely good potential for a significant diamond deposit."

Diamond companies active in Greenland, including De Beers Consolidated Mines Ltd. of South Africa, had all discovered microdiamonds, Andersen said. Since exploration gathered pace in 1996, the big companies had invested around $10 million to $15 million in their arctic gem hunt. "We and others would not be here if we did not think that the potential existed to find a really worthwhile deposit," he said.

Greenland's Nuna Minerals, fully owned by the home-rule government, and Norwegian Mindex are 50-50 partners in a gold find at Kirkespirdalen in southern Greenland. A feasibility study for underground mining was under way.

Andersen, who is also managing director of Nuna Minerals, said more gold might be found in Greenland, but hardly major amounts. "There is certainly the potential for discovering gold mines. But a large gold mine, I think the potential is smaller," he said.

Palladium, currently one of the few metals with a solid world market price, has been found in Greenland, but so far grades were below what would be economic, Andersen said.