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Production starts at Lockerby Mine

First Nickel Inc. has begun production at its nickel-copper Lockerby Mine in Sudbury and made its first delivery of ore to Xstrata Nickel for processing.
Northern Ontario Business Staff

First Nickel Inc. has begun production at its nickel-copper Lockerby Mine in Sudbury and made its first delivery of ore to Xstrata Nickel for processing.

The Canadian mining and exploration company is anticipating the mine will produce an average of 400 tonnes per day during the fourth quarter of 2011, and will ramp up to commercial production of 10 million pounds of nickel and seven million pounds of copper annually by mid-2012.

“The Lockerby Mine team has taken full ownership of this project and has been instrumental in bringing the mine back into production,” First Nickel's chief operating officer, Gerry Bilodeau, said in a news release. “Looking forward, I am confident we will achieve our production milestones given the hard work and dedication of our employees, managers and contractors here at the Lockerby Mine.”

The release said Lockerby's capital development program is being completed as planned, remains on budget and has achieved several significant milestones.

In addition to the start of production and delivery of ore to Xstrata Nickel, production maintenance and office, clerical and technical employees have been recalled, the main haulage ramp has advanced towards the 65 level; lateral development work has advanced on the 65-3 and 65-2 levels; key infrastructure improvements have been completed; and several major elements of the underground mobile fleet have been replaced.

First Nickel also announced it has raised US$35 million towards Lockerby's production after closing out a hedge position of 15 million pounds of nickel, 12 million pounds of copper and the corresponding foreign exchange and interest rate contracts it entered into in July as required under the project debt facility.

“Recent weakness in metal prices provided First Nickel with an opportunity to fully fund the remaining Lockerby project costs without the use of debt and significantly improved corporate liquidity at the same time,” First Nickel's chief executive officer, Thomas M. Boehlert, said in a news release. “First Nickel is now well positioned with the Lockerby Mine in production and a strong balance sheet.”