Little fish in a big basin
Amid the excitement of the proposed amalgamation of Inco and Falconbridge, something small but significant happened last fall in the Sudbury Basin’s southwest range. A new nickel miner was born.
First Nickel Inc., a two-year-old Toronto-based junior, was mining its first ore from the Lockerby mine when CMJ visited the site in October 2005.
Falconbridge Ltd. developed and operated the mine for 28 years, producing 8.3 million tonnes of ore grading 1.79% Ni and 1.07% Cu, before placing it on care and maintenance in September 2004.
A late 2004 study by Roscoe Postle Associates estimated Lockerby sulphide ore reserves to be 223,000 tonnes grading 1.90% Ni and 1.00% Cu, plus mineral resources of 892,000 tonnes at 2.40% Ni and 2.43% Cu. The mineral inventory is found in the Depth zone and the shallower East zone. The study concluded that, with a capital cost of $13 million, the mine could make money at current metals prices and an initial production rate of 700 tonnes/day.
The junior acquired 100% interest in the mine and its equipment on May 31, 2005, for a bargain–$1.5 million in cash–plus it assumed $5.9 million of liabilities and issued 2.2 million common shares to Falconbridge. The major agreed to purchase all of the Lockerby ore for the first two years, for processing at its Strathcona mill 45 km away. (At only 25 km away, Inco Ltd.’s Clarabelle mill might be a better destination in the future.)
Underground contractor FA MacIntyre began to reactivate the mine last June. First Nickel’s onsite management team was hired during the summer, and the junior hired MacIntyre’s 60 contract miners in September.
The mine has three shafts. Nos. 1 and 2 extend from surface to 1,300 m deep (40 level), while the No.3 internal shaft is used for hoisting ore and waste from 1,550-m (50 level) to 39 level where it is transferred to the No.2 shaft. A ramp spirals down from the 40 level to the Depth zone ore at 1,880 m deep (63 level). A 1,500-m drive from the No.2 shaft provides the only access to the East zone at 1,040 m deep (34 level), where exploration is underway. There is a 14,000-m3/min capacity ventilation system.
Underground equipment includes three load-haul-dumpers between 5- and 7-m3 capacity. A new 6-m3 LHD and a scissor truck have been ordered as well as a refurbished Copco two-boom jumbo for development drilling. The mine tractors need to be replaced.
The initial mining is using long-hole drilling in the Depth zone on the 63 level. First ore had been expected to be trucked in November, but problems with the underground crusher delayed the first shipment to Strathcona until Dec. 7.
Travel for both personnel and ore haulage is cumbersome using the current infrastructure. First Nickel COO John Haflidson, said: “We will be very aggressive in exploration, drilling in the Depth zone and below. We would like to justify the capital expense of extending the No.3 or No.2 shaft down.”
The more expensive option, at more than $15 million, would be to deepen the 6.1-m-diam No.2 shaft to 1,890 m; this would reduce operating costs and allow the mine rate to increase to 1,500-2,000 tonnes/day. The mineral inventory would have to increase to 4-5 million tonnes to justify the expense. Deepening the 3-m-diam No.3 internal shaft would be a less expensive alternative, and would require a mineral inventory of about 1.5 million tonnes.
The exploration program has some handsome targets, according to area exploration manager Phil Vicker. There have been ore intersections as thick as 15 m within the Depth zone to at least 2,200-m depth. Above the East zone is the very significant Conwest zone, under option from Landore Resources, that is possibly minable by ramp from surface.
When CMJ spoke with First Nickel CEO Beth Kirkwood in early 2006, the feasibility study for the shaft-deepening was underway. First Nickel had already been paid for the ore shipped in December. The mine is averaging about 500 tonnes of ore per day, which will increase when the East zone is mined, probably after July 2006.