The Sudbury Star is the City of Greater Sudbury’s daily newspaper.
First Nickel wouldn’t be planning to invest as much as $900,000 in exploration drilling in 2015 if it didn’t believe Lockerby Mine had a future longer beyond a year or two.
The company made tough decisions in December, bringing in a new vice-president of Sudbury operations, developing a plan to cut expenses and employees, and resuming mining its ramp development between the 6,800-foot level, says FNI’s Thomas Boehlert. FNI issued layoff notices to about 25% of its own employees and cut 75% of the contractors it was employing so it could save 130 other jobs at the mine formerly owned by Falconbridge Ltd.
The economics of the market, the low price of nickel and the cost of running the mine forced the company to stop ramp development in 2014. But it decided to resume mining below that level, mining the ore it believes will last until 2016, as it invests in diamond drilling to define and “prove up” other ore bodies at the mine, says Boehlert, the president and chief executive officer of First Nickel.
If cuts to expenses, including some at FNI’s Toronto office, hadn’t been made, the company would have quickly mined out the remaining reserves at and above the 6,800-foot level and had to close the mine, said Boehlert in a recent interview.
That was the company’s dilemma when it brought in Vern Baker as vice-president of operations at FNI’s Sudbury operations in December. Baker had worked at, among other companies, KGHM during a financial crisis at the former FNX mine, when it had to either close or significantly restructure its operations, said Boehlert.
Baker was partly responsible for a plan that allowed FNX to keep mining. It was purchased by Poland-based KGHM in 2011.
Baker also worked with the management team at Lockerby to figure out what they could do differently “to make this thing work,” said FNI’s president.
The company is counting on its workforce, which has a tremendous sense of ownership of and pride in the mine, said Boehlert, “because they know it’s up to them.
“If they can make it happen, it’s going to work and they’re going to have a great opportunity. And if they can’t make it happen, it’s all over,” he said.
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