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Struggling First Nickel posts $35.8M net loss

Keywords: Tags  First Nickel, earnings report, Thomas Boehlert, nickel, copper, Lockerby Mine, Daniel Fitzgerald

NEW YORK — First Nickel Inc. has posted a Canadian $36.33-million ($35.81-million) net loss for 2012, in contrast to net income of C$25.16 million the previous year, as the company seeks to overcome liquidity issues and production shortfalls at its Lockerby Mine.

The Toronto-based company posted 2012 revenue of C$36.08 million ($35.56 million). It did not record revenue prior to achieving commercial production at Lockerby in July 2012.

Production at Lockerby yielded 5.8 million pounds of payable nickel and 4.5 million pounds of payable copper in 2012, with the company shipping approximately 199,000 tonnes of ore to Toronto-based Xstrata Canada Corp., but fourth-quarter production was hurt by unplanned rehabilitation work on the main ramp at the Sudbury, Ontario, mine (, Feb. 7).

The company incurred a C$16.8-million ($16.56-million) impairment charge on the Lockerby Mine and a C$5-million ($4.93-million) impairment charge on exploration properties last year.

Capital expenditures are expected to total about C$16.4 million ($16.17 million) this year, of which C$11.2 million ($11.04 million) will go toward development programs at the Lockerby Mine.

First Nickel announced a refinancing plan April 1 to extend its debt maturity and secure additional financing to strengthen its liquidity position, acknowledging that the company "is in serious financial difficulty" (, April 1).

"This financing underpins our plans to fully develop the Lockerby Mine and grow the company to increase shareholder value," president and chief executive officer Thomas M. Boehlert said in a statement.

Boehlert reiterated the company’s confidence that it achieved full production rate of 10 million pounds of nickel per year at Lockerby by the end of the first quarter.

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