Congratulations to the people behind the Sudbury Joint venture, which has reopened the McCreedy West mine near Sudbury. The SJV reported today that it had a cash operating profit of $5 million in its first quarter of commercial production. I'm sure many long-time operators would like to do the same.
The SJV is an undertaking of FNX MINING (75% and exploration operator) and DYNATEC (25% and mining operator). It was created in February 2002 to acquire five dormant mineral properties from INCO LTD. The propertiesMcCreedy West, Levack, Victoria, Kirkwood and Normanare all located (of course) in the Sudbury Basin.
The Sudbury Basin is known world-wide for its continuous nickel and copper production for more than 100 years. But the SJV partners were attracted to the properties for their potential to produce platinum group elements (PGE). Their foresight is bearing profits.
McCreedy West production resumed on Sept. 12, 2003, and reached commercial rates on Jan. 1, 2004. Estimated revenue during the quarter was $9.5 million or $240/ton of ore. Mining, processing and treatment costs were estimated to be $114/ton, for a cash operating margin of $126/ton. The estimated cash cost per pound of nickel, net of by-product credits, was US$2.69 (less than forecast) and the average commodity prices were higher than forecast at US$6.65/lb for nickel and US$1.20/lb for copper. The prices for cobalt, platinum palladium and gold also topped the SJV estimates for 2004. Average ore grades delivered were higher than budget. The nickel ore ran 1.9% Ni, 0.03% Cu, 0.06% Co, and the copper-precious metal ore ran 6.8% Cu, 0.8%Ni and 0.14 oz/ton combined Pt-Pd-Au.
The joint venture isn't sitting on its laurels. The production rate is increasing steadily and will achieve its planned 1,000 tons/day by mid-2004. A footwall ramp between the 950 and 1450 levels in the Inter Main deposit will allow development of new mining faces and further increases in the daily mining rate. The McCreedy West mine will yield about 300,000 tons of ore this year with payable metal credits equalling 2.0 million lb of nickel and 3.7 million lb of copper.
FNX and Dynatec have ambitious plans for the joint venture. Besides expanding McCreedy West output, they are fast-tracking feasibility studies at the McCreedy West precious metals deposit, Levack mine and Norman property. There seems to be no stopping this partnership. Both companies are well on the way to their stated goal: joining the ranks of Canada's profitable mid-tier metals producers.