Falconbridge Limited says it will spend $368 million over the next five years to develop its huge Nickel Rim South deposit in Sudbury.
According to the Falconbridge website, the project will go ahead immediately with production expected to start in 2008.
The site is located two kilometres north of the Greater Sudbury Airport.
Once completed, a further $185 million will be required to bring the mine into production.
After taking into account pre-production revenues of $141 million, the overall net capital cost will be $413 million.
?In recent years, we have successfully increased the quality and quantity of resources available to us through a targeted exploration and acquisition
program,? said Aaron Regent, Falconbridge?s president and CEO.
?The addition of a large, high-grade inferred resource such as Nickel Rim South has dramatically changed our resource profile in Sudbury.
?Combined with our recent discovery of the Fraser Morgan deposit, we now have a resource base that will allow us to operate in Sudbury for at least the next 20 years.?
Nickel Rim South is the result of the company?s strategy to upgrade and increase its reserve base. Significant progress has been made since its discovery in 2001.
Confirmed inferred resources at Nickel Rim South include 13.2 million tonnes, up 106 per cent since early 2003, grading 1.7 per cent nickel, 3.5 per cent copper, 0.04 per cent cobalt, and a small percentage of precious metals.
Total expenditures expected in 2004 towards the Nickel Rim South project will be $75 million.
The company says resource boundaries are still unknown, which could lead to further increases in size; surface drilling underway to be completed by fall.
The development of Nickel Rim South reinforces the potential of the company?s mining base in an area where it has extensive infrastructure available.
In addition, it will support the full utilization of Falconbridge?s future smelting and refining capacity, further improving its cost structure and re-establishing Sudbury as a strong production base.
?Furthermore, the development of the Nickel Rim South deposit, which will generate large ore volumes, will indirectly facilitate the eventual construction of Onaping Depth, another large, high-grade deposit located at a depth of approximately 2,800 metres.?
In the context where Falconbridge?s production at Sudbury would be mainly supported by Nickel Rim South, Onaping Depth could be developed at a much lower mining rate of approximately 500,000 tonnes per year compared with our initial plan of 1.5 million tonnes per year,? said Regent.
In the recent contract agreement, the Canadian Auto Workers won a guarantee that production work at Falconbridge?s new Nickel Rim project ? and any developments that follow ? will be done by CAW members, not non-union contractors. The three-year contract includes a minor pay raise and