TORONTO, ONTARIO–(Marketwire – June 18, 2012) – First Nickel Inc. ("First Nickel", "FNI" or the "Company") (TSX:FNI) is pleased to report that it has completed an updated Lockerby Mine Plan ("the Mine Plan") which incorporates an optimized mining method and updated costing (in total, the "Optimization Study"). As compared to previous FNI Lockerby Mine studies (Technical Report and Feasibility Study on the Depth Zone of the Lockerby Deposit, posted on SEDAR April 10, 2009 and the subsequent Technical Report on the Depth Zone of the Lockerby Deposit, posted on November 2, 2010), this Optimization Study is modeled to coincide with the anticipated start of commercial production(1) on July 1, 2012.
A National Instrument 43‐101 ("NI43‐101") technical report for the Optimization Study will be filed within 45 days onto SEDAR at www.sedar.com.
OPTIMIZATION STUDY HIGHLIGHTS
- Significant reduction of more than 100,000 waste tonnes, or 21%, through the elimination of more than 3,000 metres of lateral development in waste
- The reduction in volume of waste through the materials handling system results in fewer ore-waste changeovers, and lower spending on fixed plant maintenance
- The new Mine Plan provides additional operational flexibility with multiple mining fronts and flexible panel lengths
- $86.9 million Net Present Value ("NPV") @ 8%, pre-tax
- 10 million lbs Nickel, 7 million lbs Copper average annual production
- $5.56 average cash cost per pound of nickel(2)
- $28 million LOM Capex (including $17 million in development)
- 58 month mine life from July 1, 2012
Change in Mining Method. (see firstnickel.com for Detail of Change in Mining Method)
The prior method of transverse mining has been changed to a longitudinal mining method. This change in mining method, together with optimizing the design of each level (eliminating crosscuts and lateral development, etc.) reduces required development, decreasing the tonnes of waste in the Mine Plan and supports opening multiple levels allowing a second bottom up mining front to be established.
Updated cost drivers. Costs in the previous FNI Lockerby Mine studies were determined based on assumptions made in 2008 and 2009. Cost assumptions in this Optimization Study, are based on the past nine months of operating experience and improvements identified in the new Mine Plan, all of which have been reviewed by external consultants. Average cash cost per pound(2) from July 2012 forward remained unchanged as compared to the previous FNI Lockerby Mine studies. The cost increases, generally being experienced by the mining industry globally, were primarily offset in the Optimization Study by increased byproduct credits and costs savings relating to the reduction in development waste tonnes.
Thomas M. Boehlert, President and CEO, commented:
"The Lockerby Mine continues to progress on schedule toward full production later this year. I believe that this Optimization Study, together with our experience to date, confirms Lockerby to be a high grade, low cost operation. Looking forward, we expect to have results from surface drilling of the Link Zone later this summer and plan to begin a larger underground exploration program in 2013 with the objective of extending mine life."