First Nickel third-quarter profit slips to $1.3M

Posted 2 days ago

First Nickel Inc. - which has an office in Timmins and exploration property in the area - says its third-quarter profit slipped to $1.3 million, from a year-earlier $1.4 million, as record production levels were offset by higher costs and a soaring Canadian dollar.

Earnings for the quarter ended Sept. 30 amounted to one cent a diluted share in each period, the Toronto-based company reported Wednesday.

Nickel production of just over one million pounds was the highest in the company's history, up 16 per cent from the second quarter. And the cash cost per pound declined to US$8.10 from US$9.58 in the second quarter.

Nickel and copper sold in the latest quarter totalled 878,866 pounds and 640,733 pounds, respectively - also the highest in the company's history.

"Earnings were

positive, although slightly below last year's level largely as

a result of a very

strong Canadian

dollar."

William Anderson

Operating cash flow was $2.7 million, compared with cash usage of $1.1 million a year earlier. Sales revenue rose to $14.2 million from $11.7 million.

But mine operating costs, including treatment and refining charges, increased by 48 per cent to $11.2 million. And the increase in the value of the Canadian dollar, relative to the U.S. currency, resulted in lower revenue in Canadian dollars, the firm said.

It estimated that revenues would have been about $2 million higher in the third quarter, and about $3 million higher for the year-to-date, if the U.S dollar had remained at $1.17 Canadian, where it started the year. The greenback now trades below parity with the loonie.

"I'm pleased to report that First Nickel continued to make progress, particularly on nickel production levels and cash costs," CEO William Anderson said in a release.

"Earnings were positive, although slightly below last year's level largely as a result of a very strong Canadian dollar, and higher operating costs. The company is debt-free and has working capital of $24.8 million, including cash of $26 million."

First Nickel said it is continuing to advance engineering and economic studies on its development projects.