Nickel prices halt Sudbury mine expansion: First Nickel could shutter Lockerby Mine within months.

• Author: Migneault, Jonathan
• Position: MINING

First Nickel Inc.'s decision to halt the development of its underground ramp at the Lockerby Mine in Sudbury comes down to the price of nickel, said company president and CEO Thomas Boehlert.

And the Toronto-headquartered nickel and copper mid-tier miner is closely evaluating in the months to follow whether it has a future in the Sudbury basin.

"The workforce has done a fantastic job and the management team has been very dedicated, but at some point you can't argue with gravity," Boehlert said.

When the company first conceived developing the mine nickel prices were in the US$9 per pound range, but more recently the price dropped below $6.

"It's really squeezing our cash-generating capability and our ability to continue to invest in development," Boehlert said.

First Nickel will mine out the remaining economic ore on and above the 6,800-foot level in the third quarter of this year--which runs from July to September--then decide whether to put Lockerby on care and maintenance or close it down.

Boehlert said the company's operations at Lockerby over the next few months will help determine whether it makes more sense to take down buildings and begin remediating the mine site after the third quarter, or to keep a skeleton crew on staff to maintain the site in case there is an economic case to reopen the mine at a later date.

"If nickel prices were to go up substantially then the mine would be viable again," Boehlert said.

The last two years have been challenging times at Lockerby, its only mine operation.

On May 6, 2014, two workers from Taurus Drilling Services--Marc Methe, 34, and Norm Bisaillon, 49--were killed by a fall of ground in the mine.

The Ministry of Labour later laid eight charges against First Nickel, and five charges against Taurus Drilling Services for their deaths.

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