Xstrata Nickel announced Friday the first phase of development of the Fraser Morgan nickel project located in Sudbury, Ontario.
A total of $18 million (Canadian) will be invested by March 2007 to complete a pre-feasibility study, definition drilling, equipment procurement and infrastructure improvements at the 3,900-foot level of the existing Fraser shaft to allow for project development and for potential future ore handling.
Subsequent development phases will be subject to approval in the second and third quarters of 2007. Mine production could begin in early 2009.
When brought into production, Fraser Morgan annual production will contribute an estimated 7,200 tonnes refined nickel per year over a seven-year mine life.
The Sudbury operations remain a key component of Xstrata Nickel's growth strategy, and the first phase of development of the Fraser Morgan project demonstrates our ongoing commitment to this resource-rich area, said Ian Pearce, Chief Executive Officer of Xstrata Nickel.
Fraser Morgan is a promising project that builds on our portfolio of assets in the Sudbury Basin; said Mike Romaniuk, vice-president of Sudbury operations.
Field work in Phase One will be undertaken primarily using existing Xstrata Nickel employees.
It is anticipated that by early 2007, up to 30 employees will be working on field work related to the Fraser-Morgan project.
The Fraser Morgan nickel-copper ore body was discovered in 1995 and consists of five separate mineralized zones located two kilometres east of Xstrata Nickel's Fraser Mine. The ore body, which will be accessed by the existing Fraser Mine shaft, contains 4.9 million tonnes of measured and indicated reserves grading 1.8 percent nickel and 0.65 percent copper, and 2.4 million tonnes inferred resources grading 1.8 percent nickel and 0.5 percent copper.
