First Nickel boosts Lockerby resource 289%

Since buying its Lockerby mine near Sudbury, Ont., less than three years ago, First Nickel (FNI-T, FNKLF-O) has boosted indicated resources at the mine more than tenfold, according to a new resource estimate.

The mine boasts an upgraded indicated resource equal to 113 million contained pounds nickel for the Lockerby depth zone — a net increase of 68 million lbs. over previous numbers reported in March 2007.

Using a 1% nickel-equivalent cutoff grade, First Nickel reported indicated resources of 2.89 million tonnes grading 1.78% nickel, 1.23% copper and 0.07% cobalt, from the 65 to 72 levels, and inferred resources of 380,000 tonnes grading 1.37% nickel, 1.05% copper and 0.05% cobalt, below the 72 Level.

The new resource estimate does not include the mine’s 64 level, which was part of the March 2007 resource estimate and is currently being mined.

In a conference call announcing the results, management conceded the grades were somewhat lower than those reported in the previous indicated resource estimate of 2.07% nickel, 1.45% copper and 0.07% cobalt from the 64 to 67 levels (using a 1.2% nickel-equivalent cutoff.) The company also reported inferred resources grading 1.98% nickel, 1.12% copper and 0.07% cobalt from the 67 to 72 levels.

But First Nickel president and chief executive, William Anderson, noted that the depth zone is still wide open and “going strong down to 72 and beyond” and that the grade can vary fairly widely. “I wouldn’t be surprised to see (grade) numbers coming back up again as we get more details,” he said. “We’re only six weeks away from some final numbers, so let’s wait to see those come out. I’m personally pretty optimistic, but we’ll work the numbers through and see what we get.”

Anderson added that the company will be in development ore at the 65 level as early as March.

The new resource estimate should allow the company to plan for mine expansion and greater production, company officials say. First Nickel will complete a new life-of-mine study in the first quarter of the year. That study will involve engineering and economic comparisons of shaft extension options and mine design.

The company estimates that infrastructure improvements based on the new resource model will not only boost output and productivity and cut costs, but will also prolong the life of the mine by eight years or more.

The resource estimate was based on a total of 164 drill holes comprising 32,453 metres of diamond-drill core and 5,096 assay results.