Ursa starts production at Shakespeare nickel-copper mine

Ursa Major Minerals (UMJ-T) has begun mining operations at its Shakespeare nickel-copper mine 70km west of Sudbury, Ont., after halting pre-production operations more than a year ago due to low metals prices.

Nickel has risen to a respectable US$8 per lb. recently after rising above US$20 per lb. in 2007 then sinking below US$5 per lb. in late 2008.

Copper is fetching around US$3 per lb. after a bit of a rollercoaster. It peaked around US$4 per lb. in mid 2008 and then plunged to US$1.50 per lb. by the end of the year.

The company has sent contractors to the open pit mine operation and mining and crushing activities are already underway.

Ursa president and CEO Richard Sutcliffe says that it was both the higher metals prices and the fact that Xstrata (XTA-L, XSRAF-O) was able to ratify a labour contract with its Sudbury workers earlier this week, that enabled Ursa to move the project into commercial production.

Many wondered whether Xstrata and its workers union would end up striking over the unsettled labour contract, but an agreement was reached at the eleventh hour. The labour contract climate has been a bit tumultuous in Sudbury. About 3,500 unionized Vale (VALE-N) employees in Sudbury have been on strike since last July while another 250 Vale employees in Labrador have been on strike since August. About 500 of Xstrata’s Sudbury workers have been laid off but this latest contract will send about 100 people back to work at the Fraser nickel-copper mine, which, like Shakespeare, was put on care and maintenance in February 2009 due to low metals prices.

Later this month, the Ursa will begin trucking Shakespeare ore to Xstrata’s Strathcona mill in Sudbury operations.

Ursa expects to mine 200,000 tonnes of contained metals in concentrate totaling about 1.1 million lbs. nickel, 1.7 million lbs. copper, 55,700 lbs. cobalt and 3,100 oz. of precious metals. The recovered and contained metals are subject to smelter recoveries and to further smelter deductions. The company says that guidance on costs will be released once all contracts are finalized.

The Shakespeare mine has probable reserves of 11.8 million tonnes grading 0.33% nickel, 0.35% copper, 0.02% cobalt, 0.33 gram platinum per tonne, 0.36 gram palladium and 0.18 gram gold.

Ursa is also planning to start up a drill program at its shallow, high grade, massive sulphide targets at the past-producing Nickel Offsets property near Sudbury.