The operation consists of an underground mine and processing facility with associated infrastructure and a production capacity of 900,000 tonnes of ore throughput. The mine has three shafts with current mining focused on the Burkland and Nygruvan ore bodies. One shaft is used for ore and waste handling; the other two are used for transportation of personnel and for emergency egress. The current flowsheet consists of crushing and autogenous grinding, bulk flotation, concentrate regrind, selective flotation separation of lead concentrates from zinc concentrates, all followed by thickening and filtration of the individual lead and zinc concentrates.

Zinkgruvan Copper Project

During the third quarter 2007, the Company's Board approved the development of the Zinkgruvan copper deposit, which lies adjacent to existing zinc deposits at the Zinkgruvan mine in Sweden. In addition to facilitating copper production, this expansion is intended to improve zinc mining flexibility through both a second underground crusher and ramp access down through the Cecilia west deposits. Following project approval, construction of underground access via an inclined ramp was mobilized and underground drifting in the crusher area also progressed. The objective for first copper production from the Zinkgruvan copper deposit is 2010.

Quarterly Operations Update