FALCONBRIDGE LTD. has received board approval for the underground definition program at its Nickel Rim South nickel deposit in Sudbury, Ont. The five-year, US$368-million program will go ahead immediately, with production expected to start in 2008. Once it is completed, a further US$185 million will be needed to bring the mine into production. Taking into account pre-production revenues of US$141 million, the overall net capital cost will be US$413 million.
"The addition of a large, high-grade inferred resource such as Nickel Rim South has dramatically changed our resource profile in Sudbury," says Aaron Regent, Falconbridge president and CEO. "Combined with our recent discovery of the Fraser Morgan deposit, we now have a resource base that will allow us to operate in Sudbury for at least the next 20 years."
Nickel Rim South has confirmed inferred resources of 13.2 million tonnes (up 106% since early 2003) grading 1.7% Ni, 3.5% Cu, 0.04% Co, 0.8 g/t Au, 1.9 g/t Pt and 2.2 g/t Pd. The pre-tax internal rate of return of the project is about 40% at $3.25/lb nickel and $0.90/lb copper. The operating cash costs are estimated to be NEGATIVE $0.66/lb of nickel after by-product credits. Surface drilling is underway and will be completed by autumn.
The development of Nickel Rim South will make use of the company's extensive infrastructure. It will support the full utilization of Falconbridge's future smelting and refining capacity, further improving its cost structure. The development of the Nickel Rim South deposit, which will generate large ore volumes, will indirectly facilitate the eventual construction of Onaping Depth, another large, high-grade deposit located at a
depth of approximately 2,800 metres. If Falconbridge's production in Sudbury were mainly supported by Nickel Rim South, Onaping Depth could be developed at a much lower mining rate of approximately 500,000 tonnes per year compared with the company's initial plan of 1.5 million tonnes per year. For more information see www.falconbridge.com.