DOING SOME DIGGING – McCreedy West Mine Opened; Terry Podolsky Honoured

The occasion of a mine reopening is cause for celebration. That is exactly what the owners of the Sudbury Joint Ven...
The occasion of a mine reopening is cause for celebration. That is exactly what the owners of the Sudbury Joint VentureFNX MINING CO. INC. (75%) and DYNATEC CORP. (25%)held to mark the successful startup of a unique mining venture on September 16. This was the opening of the McCreedy West mine at Levack, Ont., the first of five formerly-producing mining properties acquired by the joint venture from INCO LTD. in 2003. What makes this unique is the nature of the partnership: a junior with properties linking up with an established mining contractor.

Terry MacGibbon, president and CEO of FNX Mining, couldn't hide his grin. "Welcome to the first in a series of mine openings in the Sudbury area by the joint venture over the next 12-24 months. Inco had the creativity to identify non-core assets and make them available for local development. The first drillhole was in April 2002, commercial production was achieved in November 2003, and a sustained mine rate of 1,000 tons/day was reached by April 2004. Dynatec applied its skills to get the mine going ahead of schedule and on budget."

The president and CEO of Dynatec, Bob Dengler, explained, "In the fall of 2001, this was more of a dream. Terry MacGibbon, Rob Cudney [FNX director], Bill Shaver [senior vice-president, Dynatec Mining Services] and I sat around the table, and that was the birth of the Sudbury Joint Venture. Today we're opening our own mine little tiny Dynatec and FNX. We're only the third company to operate in the Sudbury Basin in the last 75 years; this has been the domain of Inco and Falconbridge."

The Honourable Rick Bartolucci, Minister of Northern Development & Mines of Ontario, was an enthusiastic guest. "This is the first time an Ontario minister of Northern Development and Mines has opened a mine in nearly seven years." He added, "The mine was named after a winner, John McCreedy. He was a top Inco executive who played hockey on two Toronto Maple Leafs Stanley Cup-winning teams in the early 1940s. In fact, he is the only individual to have won a Memorial Cup, Allen Cup, Stanley Cup and World Cup."

The McCreedy West nickel-copper mine closed in 1999. It was the first property identified by the joint venture as worth looking at, according to Dynatec's Tony Makuch, who is the vice-president of operations at the mine. The mine had to be reopened including ventilation before it could be inspected. Based on that, an underground exploration program was started, and a mine plan put together. The initial measured and indicated mineral resource estimate was 5.1 million tons grading 1.9% Ni and 0.9% Cu, with an inferred mineral resource of 1.0 million tons at 2.0% Ni and 0.9% Cu. Approval from the government and the two partners was received in July 2002. Just 14 months later, in November 2003, the mine achieved commercial production.

Ore is driven up the ramp in trucks as large as 50 tons, and crushed on surface, where it is loaded into haulage trucks operated by a contractor. The ore is taken to Inco's concentrator for custom milling. According to Makuch there are about 135 employees at McCreedy West plus 30 subcontractors. At the current rate of production, the mine has enough reserves and resources for eight years of life.

Its achievement of 1,000 tons/day sustained production was the first phase of the three-phase Levack-McCreedy West mine complex that could more than triple the 2004 production totals and reach more than one million tons of ore each year. Phase 2 (the Levack mine) and phase 3 (the McCreedy West PM deposit) are both undergoing feasibility studies, and may be in production in 2005.

The successful joint efforts of a junior explorer and an experienced contract miner, acting on a unique opportunity, has achieved in a very short time frame what neither could have achieved alone: in three years both have become owners of an operating mine. Better yet, the mine has achieved positive operating earnings in both quarters since commercial production began. As announced in July, the cash operating margin for the first six months of commercial operations was $9.7 million ($84/ton). It did not hurt that the joint venture was able to expedite the opening to take advantage of the bull markets in nickel and copper.

During the ceremonies, the Sudbury Joint Venture paid homage to Terry Podolsky, a distinguished geologist with Inco from 1954 until his retirement in 1990 as the company's vice-president, exploration and mineral resource development, by renaming one of its properties (the Norman property) the 'Podolsky property'.

In a very touching response, the wheelchair-bound Podolsky honoured the region and FNX, of which he has been a director since its inception in 1984: "Sudbury is truly a horn of plenty for the Canadian mining industry. It has consistently produced for 125 years and will continue to do so for many years. Then along comes MacGibbon and his little Canadian company and for the first time in the history of the Sudbury Basin we have a truly Canadian producer." In May the joint venture launched a $30-million advanced underground exploration program at the Podolsky property including a vertical shaft to the 2,450 level and a declined ramp.


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