First Nickel Reports Lockerby 2012 Nickel Production is Expected to Be Approximately 90% of Previous Production Guidance
TORONTO, ONTARIO -- (Marketwire) -- 01/03/13 -- First Nickel Inc. ("FNI" or the "Company") (TSX: FNI) today announced preliminary fourth quarter and full year payable metal production for the Lockerby Mine in Sudbury, Ontario.
Payable nickel production from the Lockerby Mine is expected to be below the previously disclosed guidance range for the full year and fourth quarter by approximately 10% and 38%, respectively. FNI now expects payable nickel and copper to be as follows:
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2012 Previous Guidance Expected Actual
Q4 Full Year Q4 Full Year
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Nickel lbs (million) 2.1 - 2.5 6.3 - 7.4 1.3 5.7
Copper lbs (million) 1.4 - 1.6 4.5 - 5.0 1.0 4.5
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Fourth quarter production was primarily impacted by two factors:
1. November nickel production of approximately 310,000 pounds was
approximately 35% of the planned production rate. The shortfall was
primarily the result of slower than planned development preparation of
two ore sources. Both of these sources produced ore as expected during
the subsequent month of December.
2. December nickel production was approximately 65% of the planned
production rate as a result of unplanned rehabilitation work at a main
ramp intersection which was completed in 2008. Five days of
rehabilitation work was required, during which time ore production and
development were suspended since the intersection was located above
current production levels. The rehabilitation work was completed, and
operations recommenced on December 29th.
As a result of the shortfall in fourth quarter production, FNI now expects Lockerby to complete the ramp up and achieve full production in the first quarter of 2013, instead of in the fourth quarter of 2012.
In the third quarter, the Company reported that it expected to be within the production guidance range for the full year. In addition to the items identified above, during the fourth quarter, Xstrata processed approximately 60,000 tonnes of Lockerby ore, which had been previously delivered in the third quarter. That processing resulted in lower than expected nickel and copper grades, and lower than expected nickel recovery, reducing year to date nickel production by approximately 460,000 pounds. Both ore grades and metal recoveries for lots processed prior to the fourth quarter performed within an acceptable variance range. An investigation into both the lower than predicted ore grade and lower than plan recovery is in progress.
FNI expects to provide 2013 guidance later this month.
About FNI
FNI is a Canadian mining and exploration company. The Company's mission is to be the most dynamic North American emerging base metal mining company in which to work and invest and to be respected in the communities in which we operate. FNI is in the process of ramping up production at its Lockerby nickel / copper mine in the Sudbury Basin in northern Ontario. Once the Lockerby Mine reaches full production (expected in 2013), it is expected to produce at a rate of approximately 10 million pounds of payable nickel and approximately 7 million pounds of payable copper annually, providing a strong base of cash flow from which to grow the Company. In addition to the Lockerby Mine, the Company owns exploration properties in the Sudbury Basin, the Timmins region of northern Ontario, and the Belmont region of Eastern Ontario. FNI's shares are traded on the TSX under the symbol FNI.
Forward-Looking Statements
This news release contains forward-looking statements, which are subject to certain risks, uncertainties and assumptions, including the cash flows, metal prices, decrease costs, increase output, expected production, and expected exploration expenditures. A number of factors could cause actual results to differ materially from the results discussed in such statements, and there is no assurance that actual results will be consistent with them. Such factors include fluctuating metal prices, lower unit costs and other factors described in the Company's most recent Annual Information Form under the heading "Risk Factors" which has been filed electronically by means of the System for Electronic Document Analysis and Retrieval ("SEDAR") located at www.sedar.com. Such forward-looking statements are made as at the date of this news release, and the company assumes no obligation to update or revise them, either publicly or otherwise, to reflect new events, information or circumstances, except as may be required under applicable securities law.
Contacts:
CHF Investor Relations
Robin Cook
Senior Account Manager
416 868 1079 x 228
robin@chfir.com
First Nickel Inc.
Paul Davis
VP, Exploration
416 362 7050 x 226
pdavis@firstnickel.com