FNX to boost metal production in 2010

Posted 17 hours ago

A bit of good news from Sudbury's mining industry Wednesday: FNX Mining Company Inc. announced it expects to increase production at its local operations by about a third in 2010.

However, the company said it will concentrate mining its copper and precious metal deposits in 2010 and expects to begin commercial production by mid-year.

FNX is mining copper and precious metals at its McCreedy West and Podolsky mines, after it halted nickel ore production last year in response to weak demand and low prices for the metal.

For now, the company isn't planning to mine any nickel in 2010, although that could change.

"In 2010, FNX will continue to focus its mining activities on its copper-precious metal dominant deposits, including achieving commercial production at the LFD by mid-year," the company said in a release.

"The 2010 forecast does not include any production from its primary nickel dominant deposits, although that opportunity remains under active consideration and will be assessed on a quarterly basis."

The firm reported it has completed the last internal ramp development at the new Podolsky mine, which resulted in improved logistics and will allow a 13% increase in production, to 417,000 tonnes of copper-precious metal rich ore in 2010.

Development of the high-grade Levack footwall deposit is slightly ahead of schedule, and commercial production from the upper levels of the deposit is expected to start by mid-2010.

FNX said it expects capital expenditures of $75.2 million for operations, $13.3 million for mine exploration and $15.7 million for greenfield exploration in 2010.

Production in the new year is expected to total 891,000 tons of ore shipped, marking a 31% increase over 2009.

The company said it would focus on mining its copper-precious metal dominant deposits in 2010 and expects to achieve commercial production by mid-year.

FNX also said it expected to meet its original 2009 production guidance despite the suspension of production from its nickel-dominant ore deposits.

FNX noted that sustaining capital for 2010 was slightly higher than normal due to cost cutting over the past two years.

Cash conservation and mine exploration expenditures which were dramatically reduced over previous years, have been increased in 2010 to facilitate near-and mid-term mine planning and development.

The amount budgeted for exploration will be spent exploring new deposits and discoveries on the company's Sudbury properties.

FNX also said it expects its DMC mining services division to break even in 2010.

FNX said its strong balance sheet, which has no debt, is sufficient to implement its 2010 operating plan as well as provide additional resources for new opportunities in the future.