Falco plans $700M mine investment: Falconbridge Ltd. expected to make production decision in October.

• Author: Riopelle, Maggie
• Position: Mining - Investment in nickel-copper mining project

Falconbridge Ltd. plans to invest more than $700 million in its nickel-copper Montcalm project near Timmins.

Falconbridge is expected to make a production decision in October once the feasibility study and public consultations have been completed. The Montcalm site, once in full operation, is expected to employ 145 people.

"If we start the mine soon, and we could make a production decision later this year, then we expect the mine will be operational until 2011," explains John McDonald, Montcalm project manager. "Over the life of the mine we estimate expenses to be $705 million. There has already been $40 million spent on the site. It is difficult to estimate the revenues since that will be based on metal prices, but obviously we wouldn't start the project if we didn't expect our revenues to be more than our expenses."

The company expects to mine at the rate of 750,000 tonnes per year over the expected eight-and-a-half-year life of the mine. The company plans to process 5.6 million tonnes of mining reserves with a grading of 1.49 per cent nickel and 0.71 per cent copper.

Upgrades to the Falcofibridge Kidd site are also in the. plan, as it is not equipped to process nickel ore. The company will process both the nickel and copper in Timmins. Smelting of the nickel concentrate will be done at the Sudbury smelter and copper concentrate at the Kidd site.

However, the project has been slowed due to problems accessing the property. The site is located in the Groundhog River watershed, which is protected by the government as a potential provincial park area.

"The application has taken a lot longer," McDonald says...