The Sudbury Star is the City of Greater Sudbury’s daily newspaper.
The president and chief executive officer of First Nickel won’t come right out and say Lockerby Mine is in full production, but Thomas Boehlert strongly hints at it. The mine formerly owned by Falconbridge reached 60% production in 2012, costing about $37 million to operate with $36 million in revenues.
In public guidance released in the first week of April, the company said it expected to have reached full production in the first three months of 2013 — after that time period had already passed.
“We have no reason to change that expectation,” Boehlert said Wednesday in an interview with The Star. In public guidance issued at the start of this year and last week, the company said it expected to “be there,” in full production, mining 10 million pounds of nickel a year, by the end of March.
“We have no reason to change that expectation,” Boehlert repeated. “So, you can interpret that as you like.” The junior miner has been on a roller-coaster since it purchased Lockerby in 2004, operating it until the 2008 economic meltdown and the collapse of metals prices forced layoffs and essentially closed the operation.
This year will still be a challenging one, said Boehlert, but the junior miner’s future is looking bright.
On track to meet full production, its coffers have been boosted recently by $25 million invested by two key shareholders — Denver-based Resource Capital Funds and Toronto’s West Face Capital, which each own between 20 and 25% of the company’s shares.
“So that’s a key benefit that we have,” said Boehlert, who visited Sudbury this week on a regular monthly visit.
“I think we’re off to a great start in the year, and (higher) nickel prices would be helpful,” said the former chief financial officer at Kinross Gold Corporation.
First Nickel is a small company looking to grow. While it conducts work at two exploration properties in eastern Ontario, it is also looking at acquiring another mine either in operation or close to being able to be brought into operation, he said.
One option the company is looking at is putting a mine like Lockerby, mined by Falconbridge for 40 years, back into production. There are also other deposits on the Lockerby site it is looking at developing.
With major mining companies talking about selling non-core assets, there may be opportunities for First Nickel, said Boehlert.
Some companies are “cleaning up their portfolios and getting rid of things that are not that interesting for them as major miners, but they could be very interesting for us,” he said.
In the last year, junior miners have been devastated by low commodity prices and investors who have become much more conservative. “Junior mining is a pretty speculative and high-risk area,” said Boehlert.
First Nickel is looking for a turnaround this year. With a full workforce of 150 employees and 100 contractors hired last year, fixed operating costs are high.
For original version, click here: http://www.thesudburystar.com/2013/04/11/first-nickel-nears-target