First Nickel Places Lockerby Mine on Care and Maintenanceadmin
First Nickel Inc. announced that, from today, it is suspending production and initiating a care and maintenance program at its wholly owned Lockerby Mine due to low metal prices and the challenging financial environment.
The decision follows an extensive evaluation of mining scenarios and likely near term metal price projections that rule out the continuation of operations. The Lockerby Mine will be kept in ready condition through the care and maintenance program that will enable a return to production when economic conditions improve and while the Company evaluates its options.
The Company will continue to explore its properties located in the Sudbury basin as well as northern and eastern Ontario.
“Regrettably, the prevailing nickel prices are below Lockerby’s cash costs per pound of payable nickel even though the Company has worked diligently throughout 2008 to reduce costs,” said William Anderson, President and CEO of First Nickel. “We believe this is the best option to conserve cash and position the operation for future success while maintaining the long-term benefit to the community and our shareholders. The decision to put the mine on care and maintenance has not been taken lightly and the Company recognizes the impact upon our employees, their families and the community. In the weeks ahead we will continue to firm up our plans and pursue ways to bring the operation back on line when conditions improve.”
An orderly suspension of all mining activity is underway along with reductions in staff at the mine, except for a small group that will be retained to meet care and maintenance requirements. The Company’s affected employees will be provided with transition support during this difficult time.
“I am proud of our team at Lockerby mine which has worked very hard and made great strides in recent months to increase production and lower costs. We greatly regret the impact that this shut-down will have on the workers who will be laid-off, and we intend to work with those who are displaced to help them relocate elsewhere in the industry,” said Gerry Bilodeau, VP Operations.
First Nickel is a Canadian mining and exploration company. Its current activities are primarily focused on the Sudbury Basin in northern Ontario, the location of the Lockerby Mine and four of its exploration properties. First Nickel also has two exploration properties in the Timmins region of northern Ontario. First Nickel’s shares are traded on the TSX under the symbol FNI.