By Nick Stewart
FNX Mining Company Inc. reported the highest operating and financial results in the company’s history for its third quarter ending Nov. 3.
With $53 million earned this quarter alone, this marks the company’s single highest quarterly revenue, complemented by its lowest cash operating cost of $100 per ton and its record total cash operating margins of $36.4 million.
“We’re quite pleased, obviously,” says Terry MacGibbon, president and CEO.
“We’re very fortunate to be producing in these very strong, robust commodity markets.”
In 2006’s third quarter alone, First Nickel’s McCreedy West Mine mined and shipped a total of 165,306 tons of ore, resulting in the sale of 2.3 million pounds of nickel, 2.6 million pounds of copper and 7,935 ounces of total precious metals. This represents a jump over the same period last year, where 111,795 tons of ore were shipped, with a quarterly revenue of $18 million -- quite a boost from this quarter’s $53 million, says MacGibbon.
The greater number of produced tonnage not only provides more material for market profits, but also helps to increase the operational efficiencies.
“We’re very concerned that we keep our costs under control and keep our efficiencies up,” he says. “That way, when the prices come down, our profits may not be as high as they are now, but we want to do the best we can.
When prices are good, industry has the tendency to get a little slack, and we’re trying to fight that.”
MacGibbon hopes to continue FNX’s winning ways by doing its best to maintain McCreedy West’s production of 2,000 tons per day, and by moving two more of its properties into full mine production in the next two years.
Following the production of the company’s Levack nickel deposits in 2007, and the Podolsky footwall deposit in 2008, the company is expected to have an annualized production rate of 1.4 million tons of ore per year.
To meet these targets, the company has spent up to $15 million on rehabilitation efforts at the Levack Mine holdings.
With the assistance of Dynatec Corp., FNX is overseeing shaft hoisting , hoist modernizations as well as systems for the handling loading and crushing of ore. This will allow the site to begin lifting pre-production ore in December, with incremental increases continuing through until the middle of the year. MacGibbon expects to produce 1,500 tons per day. This will allow FNX to increase its 2007 production by 250,000 tons, a number that is expected to jump to 400,000 tons in 2008.
Construction of ore and waste handling system has also been initiated on the Levack Mine 2650 level to make way for production by 2009. In September, drilling revealed that although the deposit’s strike length remains nearly 800 feet, its dip length has been expanded from 1,000 feet to 1,600 feet, and remains open.
“We don’t know what the size of the deposit will be yet, but for us, it’s significant,” he says.
“It’s about halfway between Xstrata Nickel’s Craig Mine, where we have drills underground, and our Levack shaft, and we’ll put that in production as fast as possible, because of the very good location between two existing mines. It’s also a sign that the size is of interest and that it’s going take more work to decide what it is and how economic it will be.”
Advanced exploration programs continue at FNX’s Podolsky property on Sudbury’s north range with the sinking of the 2600 level shaft. Dynatec is helping FNX to install the loading pocket and shaft changeover. Projects are also underway to prepare the surface for ventilation and secondary mine exits.
