First Nickel Reports Profitable Third Quarter
First Nickel Inc. announces that it has filed with the Canadian securities regulatory authorities its unaudited financial statements and management’s discussion and analysis of financial results for the three and nine months ended September 30, 2006.
The Company recorded net earnings of $1,424,209, or $0.02 per share for the three month period ended September 30, 2006. This is the first quarter in the Company’s short history of recording earnings. This has resulted in the Company having net earnings of $31,408 on a year-to-date basis.
Revenue during the third quarter amounted to $11,685,111, from the sale of payable metal production of 747,731 pounds of nickel and 474,596 pounds of copper in 30,636 tonnes of ore milled. The average metal prices realized in the quarter were US$11.44 for nickel and US$3.33 for copper.
A total of 24,837 tonnes of ore was delivered to the Falconbridge treatment facilities for milling in the third quarter of 2006 and represents a 19% decrease compared to the second quarter tonnes milled, but is about the same as milled in the first quarter. Payable metal production in the third quarter is estimated to be approximately 460,000 pounds of nickel and 355,000 pounds of copper. The value of the third quarter payable metal will be recorded as revenue in the fourth quarter of 2006.
The deteriorating ground conditions on 63L which were causing excessive dilution continued into the fourth quarter until the decision was made in late October to cease mining activity in that area. This action was the prudent course as retrieving this lower grade ore could have put the remote-controlled LHD equipment at risk for minimal financial gain. There will be a reduction in output in the fourth quarter because of this, with the forecast for the period adjusted downward to 19,000 tonnes.
In November, development crews have reached a significant milestone at the Lockerby Mine, having advanced to the point of breaking into and are now drifting in ore on both the East Zone and the 64 Level on the Depth Zone. Both these headings will be supplying development ore in the next two months as we move toward full scale stope production from those areas in 2007.
William Anderson, President and CEO notes, “After a difficult year with a number of start-up issues and related operating problems, I am confident that our team at Lockerby has identified and overcome most of these obstacles. The present opportunity to achieve a fresh start by mining new ore in both the East and the Depth will result in stronger operating performance beginning in 2007. The positive third quarter results are evidence that even during the difficult operating conditions of the past year, the Lockerby mine is capable of generating positive returns. With development now well underway in two mining areas, and the continued positive results of our definition drilling program, I see 2007 as the year in which we can establish the operating and resource base we originally envisaged that transforms Lockerby into a profitable mining operation with a long future.”
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 company’s producing property (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.
This news release may contain forward-looking statements, which are subject to certain risks, uncertainties and assumptions. 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 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: First Nickel Inc. William J. Anderson President and CEO (416) 362-7050 (416) 362-9050 (FAX) Email: wanderson@firstnickel.com
Website: www.firstnickel.com
