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Falco?s Nickel Rim expected to be operational by 2009

BY KEITH LACEY The nickel mining industry is notorious for going in cycles. The pendulum is swinging upward at Falconbridge Ltd.'s Sudbury operations and expected to stay there for years to come.

The nickel mining industry is notorious for going in cycles. The pendulum is swinging upward at Falconbridge Ltd.'s Sudbury operations and expected to stay there for years to come.

Nickel prices are at a 15-year high and the company reported a record first-quarter profit of $176 million recently. A new three-year contract has been signed with 1,000 production and maintenance employees and all systems are moving forward on the Nickel Rim South Project.

These are indeed very good times for Falconbridge Ltd.

The Nickel Rim South Project is the first new mine development project for the world's third largest nickel producer in the region since the Craig Mine opened in 1995.

The company's announcement earlier this year that it was going to spend in excess of $412 million (US) on this exploration project is welcome news for the company, unionized employees and this community, said Mike Romaniuk, project director.

Â?We haven't opened a new mine in 10 years...any time you embark on a major project like this, a lot of people get excited and we're no different,Â? said Romaniuk.

Within days of the announcement, work crews moved in to remove rock at the site, located approximately two kilometres west of the southern tip of Lake Wahnapitae and three kilometres north of the Sudbury Airport.

It's' going to take almost five years of hard work and millions of dollars to prepare the site, sink two shafts and get ready to go underground to retrieve the high grade metals, said Romaniuk.

Â?Right now we're preparing the site and that means removing a lot of rock and setting up temporary facilities,Â? he said. Â?By the end of the summer we will not only have a cleared piece of land, but trailers, temporary power and communications systems in place and a water supply.

Â?We will have everything necessary to start sinking the main shaft by February of next year.Â?

The budget for this first phase is just under $130 million.

Cementation Ltd., a contracting company from North Bay, will sink the main shaft and nearby ventilation shaft, a project that will take until the end of 2008 to complete.

The main shaft will be sunk to just under 1,800 metres, while the ventilation shaft will go down to the 1,660-metre level.

The main ore body discovered in 2001 is located between the 1,000-metre and 1,600-metre level, said Romaniuk.

The company hopes to begin underground lateral development by early 2007 and Phase I of an extensive diamond drilling operation in early 2008.

Â?The plans call for 100,000 metres of diamond drilling underground,Â? he said. Â?When that is complete, we'll finally know the capacity and exactly how much we can produce.Â?

The company has committed these enormous financial and manpower resources as an exploration project, but there's every confidence Nickel Rim South will become a fully operational working mine, said Romaniuk.

Â?I think we have a good feeling this will become an operating facility for the company or there would not have been the commitment to spend almost $600 million (Cdn).Â?

The company needs replacement tonnage for its Sudbury division as both the Craig and Fraser Mines are coming to the end of their useful lives.
Initial drilling results are extremely positive as 72,300 linear metres of surface diamond drilling conducted since the initial discovery have uncovered high grades of nickel, copper, cobalt, gold, platinum and precious metals.

Â?We have a better grade of nickel and much higher grades of copper and precious metals than we normally find at our other nickel mines,Â? he said.

Drilling results indicate an estimate of 13.2 million tonnes of ore with a grading of 1.7 per cent nickel, 3.5 per cent copper, .04 per cent cobalt, .8 grams per tonne for gold, 1.9 grams per tonne of platinum and 15 grams of per tonne of silver.

It's expected the Â?handover to an operational mine,Â? will occur in late 2008 or early 2009, said Romaniuk.

Â?It takes a lot of work, a lot of money and a lot of luck to develop a project of this size,Â? he said. Â?We've just started the project and we know it's going to be another five years before we start reaping any significant results. But you don't enter into a project like this without knowing you're going to get a significant return on your investment.Â?

Without Nickel Rim South, the future for Falconbridge was not overly bright for Sudbury operations, said Romaniuk.

Â?Unfortunately, some of our mines are coming to the end of their active lives, that's why it's so important to make major finds on a regular basis,Â? he said.

Â?We estimate reserves at Nickel Rim of 13.2 million tonnes and we're looking at a production rate of one million tonnes per year, giving us at least 13 years of production. It's going to take five years to get things ready, which gives the mine a total life expectancy of 18 to 20 years.

Â?Without this find, we were running out of ore, but this gives us a new lease on life for another 20 years.Â?

When Nickel Rim is ready to go into full production, some new jobs will be created, but the company fully expects to transfer most jobs from other operations, said Romaniuk.

Â?My expectation is workers will be transferred from the existing workforce,Â? he said. Â?The people working at Craig and Fraser will be transferred to Nickel Rim South when those mines close.Â?

The good news is with site preparation and planning underway, numerous engineering companies have been hired and hundreds of indirect jobs will be created, he said.

Tracey Jeffs-Schonewille, area leader for environment at Nickel Rim South, said even though the site is located in a bush area near water bodies, all environmental concerns have been addressed.

All environmental permits required for site surface preparation are in place and a closure plan has been filed with the Ontario Ministry of Northern Development and Mines to address long-term safety and environmental performance should the project not proceed to full production, she said.

Falconbridge has also posted a letter of credit for $1.7 million as financial assurance for remediation measures identified in the closure plan, she said.

All waste water from the site will be fully contained and pumped to the existing Falconbridge Smelter waste water treatment facility and there will not be any discharge to nearby lakes and streams, said Jeffs-Schonwille.

An environmental management system is also in place for construction activities, including sediment and erosion control measures and waste management strategies, she said.

Two retaining ponds are being built to retain all waste water and store runoff and the main site will be fully paved to ensure dust and debris isn't scattered to nearby rivers and streams, she said.

The government has extremely stringent guidelines in place whenever a new mine site opens and everyone involved in the environmental side of Nickel Rim South knows their job and what's expected to meet those guidelines, she said.

Roy Slack, president of Cementation, said sinking two shafts of this size means jobs for 120 employees for almost three years starting next spring.

Â?This is an exciting project for a company like ours,Â? he said. Â?To sink two shafts from surface to these depths at the same time at this site, located so close to Sudbury, is both challenging and welcome,Â? he said. Â?We often have to work in isolated areas far away from the city...our people are looking forward to having regular work close to home.

Â?This is a major project for us and we're looking forward to it,Â?

Sudbury Mayor David Courtemanche and director of economic development Doug Nadorozny, are both ecstatic about the project.

Â?This is vital to the economy,Â? said Courtemanche. Â?It's not just about the mining operation itself, it's also good news for the supply and resources sector.

Â?Sudbury has to be the national centre for mining research and innovation.Â?

Bringing major projects like Nickel Rim South online ensures mining will continue to be front and centre in this community for decades to come, said Nadorozny.