Xstrata starts phase one for new Sudbury mine

Xstrata (XTA-L, XSRAF-O) will invest $18 million by March 2007 on the first phase of development of its Fraser Morgan nickel project in Sudbury, Ont.

The Switzerland-based company will complete a prefeasibility study, definition drilling, equipment procurement and infrastructure improvements at the 3,900-foot level of the nearby Fraser shaft.

It is estimated the mine will produce 7,200 tonnes of contained nickel per year over a seven-year mine life. Production could begin by early 2009.

Xstrata’s three other mines in the Sudbury area (Fraser, Lindsley and Craig) produced a total of 19,700 tonnes of nickel-in-concentrate in 2005.

“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 Xstrata Nickel CEO Ian Pearce in a statement.

The Fraser Morgan orebody contains 4.9 million tonnes of measured and indicated resources grading 1.8% nickel and 0.65% copper, and 2.4 million tonnes of inferred resources grading 1.8% nickel and 0.5% copper.

Up to 30 existing Xstrata Nickel employees will do the majority of fieldwork during the first phase.

The Fraser Morgan orebody is about 2 km east of Xstrata Nickel’s Fraser mine. The orebody was discovered in 1995 by Falconbridge, which Xstrata acquired last August. Falconbridge had run nickel-copper mines in the Sudbury area since 1929.