Inco Ltd. and Falconbridge Ltd. provided members of the investment community with a first-hand look at how the companies plan to generate approximately $550 million in average annual pre-tax value by applying a “one mine” approach to their combined Canadian operations when the friendly acquisition is completed.
Inco and Falconbridge conducted a two-day “Synergy Summit” June 12 and 13 for about 60 investors and analysts, including an extensive tour of Inco and Falconbridge facilities in the Sudbury Basin.
“We wanted investors to see, hear and feel for themselves the outstanding and unique opportunities we have to create value at an operational level by combining our two companies,” said Inco chairman and CEO Scott Hand in a news release.
“This tour provided a great deal of tangible evidence showing why the new Inco is the most logical transaction on the table and possibly the best combination of any two companies in the mining industry today.”
Of the estimated $550 million in synergy value that has been identified so far, approximately $205 million is expected to come from optimizing material feeds and processing facilities, $135 million from maximizing production by accelerating mine development, $100 million from cost and other improvements, and $110 million from savings in general and administrative costs.
The two-day tour included stops at Inco’s Coleman/McCreedy mining complex and Falconbridge’s Strathcona mill, Inco’s Copper Cliff smelter and Copper Cliff nickel refinery, and the Falconbridge Nickel Rim South development project, which is adjacent to Inco’s Victor property.
Investors also learned about the considerable potential to create even greater value once the two companies come together by looking beyond the Sudbury operations and considering the entire complex of combined operations in Canada as “one mine.”
Future possibilities for improvement include increasing copper separation to 70 percent, effectively providing additional nickel smelting capacity.
This would open the door to redirecting more Voisey’s Bay concentrate to Sudbury from Thompson – creating additional mining opportunities in Thompson.
