NEW YORK First Nickel Inc. is actively
looking for acquisition opportunities amid a lack of investment
in the junior mining sector, president and chief executive
officer Thomas Boehlert told AMM.
Boehlert noted that
the value of the TSX Venture Exchange has declined by almost
two-thirds since March 2011, which he said illustrates his
previous claims that there is a serious lack of investor
interest in junior mining companies (
amm.com, May 1).
That gives you a
clear indication that the money has fled from the junior
sector, but thats where we see an opportunity, he
told AMM in an interview. We have a
cash-flow-producing mine that even in the current nickel market
is viable, and thats a unique position to be in for a
junior mining company.
The goal is to
maintain self-sufficiency and not rely on capital markets to
stay in business, he said. Now that Lockerby (Mine)
is up and running, we have a good financial base to take
advantage of this market situation, where asset values have
gone down by two-thirds. We want to use that opportunity to
acquire additional assets to diversify away from a single-asset
base and build a portfolio of assets that will be viable in the
interim and very valuable when the commodity markets turn
Boehlert said the
company is focusing its search on London Metal Exchange-traded
base metal opportunities in the Americas, but he didnt
specify a timeframe. We look for opportunities based on
our existing skill set where we can add something to create
value, he said. Were putting quite a bit of
effort into it.
The urge to diversify
is understandable, with the Lockerby Mine in Ontario
experiencing development delays and higher-than-expected
capital expenditure costs over the past year (
amm.com, Feb. 7). However, Boehlert noted that
these are still fairly early days in the life of a
mine, with the site only reaching its full production
rate in the first quarter of 2013 (
amm.com, April 18). It previously had been
expected to hit full production in the fourth quarter of
It is a
single-asset procuring company at the moment, and operating a
very old mine deep underground certainly has challenges,
he said. But the workforce has proven this can be done.
It is a viable operation even in the current nickel market,
where 30 to 40 percent of nickel operations are under
Boehlert said he
expects an ongoing lull in official nickel prices to eventually
force many unprofitable operations to be mothballed, which
should tighten supply and boost official pricing and eventually
stimulate more investor interest.
Cash nickel prices on
the LME settled at $14,855 per tonne June 10, down 3.1 percent
from $15,325 a month earlier.