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First Nickel expects recovery from shortfall

Keywords: Tags  First Nickel, nickel, copper, 2012 production, Lockerby Mine, Daniel Fitzgerald

NEW YORK — First Nickel Inc. expects its Lockerby Mine in Ontario to reach its full production rate of 10 million pounds of nickel per year by the end of the first quarter after a "shortfall in production" in the fourth quarter of 2012, it said.

The Toronto-based company produced about 5.8 million pounds of payable nickel and 4.6 million pounds of payable copper in 2012, having commenced commercial production July 1, it said, noting that nickel production represented 90 percent of its 2012 guidance, while the copper figure was at the lower end of its 2012 guidance. The company also shipped about 205,000 tonnes of Lockerby ore to Xstrata Plc in 2012.

First Nickel’s fourth-quarter shortfall was due to "slower-than-planned development preparation and unplanned rehabilitation work on the main ramp" at Lockerby, in northern Ontario’s Sudbury Basin, the company said.

"Challenges presented themselves in the fourth quarter of 2012, resulting in a reduced production rate, which delayed full production to the first quarter of 2013 and impacted the company’s working capital and liquidity positions," First Nickel president and chief executive officer Thomas Boehlert said in a statement.

The company expects to be at or near its full annual production rate of 10 million pounds of nickel and 7 million pounds of copper after the first quarter, it said.

The delays have "resulted in the need for higher-than-originally-planned capital expenditures for development in 2013," First Nickel added. "As a result, the company plans to source approximately (Canadian) $15 million ($15.01 million) of additional capital to complete the proposed development project as planned and is considering a number of potential financing alternatives."

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