By NICK STEWART
Following recent results which show a 289 per cent increase of the company’s indicated resource at Sudbury’s Lockerby Mine, the coming year promises to be a “pivotal” one for First Nickel Inc., according to its president and CEO.
The completion of an update of the resource estimate for the mine’s Depth Zone has increased to 46 million pounds of contained nickel in the indicated category to 113 million pounds as of March 2007.
This is the second time in as many years that First Nickel has significantly increased its indicated resource, as last March’s estimate represented a 475 per cent increase over the previous 2005 estimate.
“This is why we bought the mine,” says William Anderson, president and CEO.
“We always believed that we could grow the resources from what they were when we bought it.”
Specifically, the estimate has established an indicated resource of 2.89 million tonnes grading 1.78 per cent nickel, 1.23 per cent copper and 0.07 per cent cobalt.
These numbers will be fed into a new mine plan, expected to be completed this quarter. This will allow the company to better determine how to improve the production output.
Currently, the company anticipates increasing nickel production at the Lockerby Mine from roughly 3.2 million pounds of payable nickel in 2007 to an anticipated total landing somewhere between 3.8 and 4.4 million pounds. Up to as much as 2.7 million pounds of payable copper is also expected to be produced this year.
The new mine plan will also help determine what kind of capital investment will be necessary to extend the mine life. Anderson says the study may extend the longevity of the Lockerby Mine to 2014, and possibly beyond.
Engineering studies are also currently underway to help determine which approach the company should take to best develop the new resources. That will likely involve the extension of one of the existing shafts, as the resources are 7,200 feet below surface.
These studies will be completed by the second quarter of 2008 and will help dictate how development progress on an annual basis.
In the hopes of extending that success even further, First Nickel has mapped out a $4 million exploration program for the mine in 2008, which includes some “blue sky” exploration drilling for the first time in the company’s three-year involvement with Lockerby.
More than 30,000 metres of drilling will look for entirely new areas of mineralization in the mine area, including footwall zones similar to that which is currently being mined.
Drilling will also work to take a closer look at the mine’s Main Zone, where mineralization had been identified in the past, but not followed up on.
“The drilling we’ve done to date has been extending the resources, and you can call it exploration if you want, but really we were just following the orebody down. It’s going to be fun and it should be interesting to see what emerges from this year’s drilling.”
The company will also spend roughly $2.4 million on exploration across the nearby Morgan-Lumsden and West Graham properties, where the company is looking to earn a stake from Xstrata Nickel and Landore Resources, respectively.
This work is part of the more than $23 million the company is looking to spend in Sudbury through 2008.
While local exploration accounts for nearly $6.4 million, the remaining $17 million in expenses are expected to go towards various operational costs. Of that total, $5 million is expected to be spent on items such as new vehicles, pumps and other assorted assets needed to replace aging gear.
The other $12 million is slated for mine development, and while much of that is routine, some of it will be focused on descending the existing ramp from the 65 level (6,500 feet below surface) to the equivalent of 6,600 below surface by the end of the year.