Nickel miner restarts open pit: Ursa Major Minerals has big haul ahead.

• Author: Ross, Ian
• Position: MINING

Anew labour deal at Xstrata Nickel combined with improving mineral prices has spurred Ursa Major Minerals to re-start an open pit and begin shipping base and precious metals ore to Sudbury for processing.

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The junior miner revived its mothballed Shakespeare nickel-copper mine in early February with plans to ship 200,000 tonnes of ore this year from its Shakespeare pit, 70 kilometres west of Sudbury, to Xstrata's Strathcona mill for processing.

The company mobilized their contractor, Pioneer Construction, Feb. 3 to begin crushing and hauling out about 30,000 tonnes of stockpiled ore left on the property when operations halted in October 2008 as metal prices plunged.

Ursa Major president-CEO Richard Sutcliffe was expecting to make a financing statement in mid-February of some working capital to get the mid-tier miner moving forward this year.

While there's revenue in the rock sitting in inventory Sutcliffe said it often takes several months to get paid after they ship ore to Xstrata's nickel smelter and their copper smelter in Rouyn-Noranda, Que.

"We have to sustain our working capital during that period for mining, crushing and hauling until our revenue stream is loaded."

Ursa Major struck a two-year custom milling contract with Xstrata for 1,000 tonnes a day He's optimistic once they have demonstrated the ability to delivery on a steady basis, Xstrata will want more.

The Shakespeare open pit is north of Agnew Lake near.the village of Webbwood on Highway 17. The pit has a 10-year mine life of nickel, copper, cobalt and other precious metals.

The company was finalizing its haul contracts in February with plans to truck all its tonnage on some back-country logging roads to hook up with Highway 144 leading to the Strathcona mill.

Though the Shakespeare mine is only a few kilometres north of the Huron Central Railway, which runs east to Sudbury Sutcliffe is currently ruling out that option for now.

Sutcliffe said with no direct rail links into the Sudbury mill, having to twice load and unload from rail to truck at each end would be inefficient.

"We've certainly had some interest from the Huron Central and I'd like to continue that option.".

The easy fix is to build a processing mill of their own. A combined mine and mill project is tabbed at $141 million.

"These are tough credit markets and financially we've been hammered through the last 18 months," said Sutcliffe. "We've got to rebuild financial strength and get back into...