First Nickel Inc. reported that it had commenced ore production at the Lockerby nickel-copper mine and made its first delivery of ore from the mine to Xstrata Nickel. The mine is expected to produce an average of 400 mt/d day during the fourth quarter of 2011, ramping up to commercial production at an annual rate of 10 million lb of nickel and 7 million lb of copper by mid-2012.

The Lockerby mine is located southwest of Sudbury, Ontario, Canada, and was developed and operated by Falconbridge from 1974 until 2004, extracting more than 8 million mt of ore during that period.  First Nickel acquired the mine in June 2005 and began commercial production in 2006, extracting an additional 364,000 mt to October 2008 when the mine was placed on care and maintenance due to low metal prices.

Following an update late last year to the economic model included in the company’s Lockerby Depth feasibility study, a mine plan emerged that encompassed a project term of 6.5 years, comprising one year of preproduction and about 5.5 years of development and production at a production rate of 800 mt/d or 280,000 mt/y.

The plan included replacement of the existing haulage fleet, an optimized mining sequence, and ore handling and ventilation system improvements including a cooling strategy and backfill handling. The orebody will be accessed via a ramp and level crosscuts to main haulage drifts. Haulage drifts will be driven parallel to the orebody and drawpoints will be excavated perpendicular to the long axis of the orebody. High-density hydraulic backfill will be used in all mined out stopes and waste rock will be utilized in the Contact Zone to construct cemented rockfill plugs in all primary stopes and some selected secondary stopes.

In August, the company said delivery of the first 42-ton-capacity underground truck took place in March, and the balance of the equipment, including three additional trucks, three 6-yd3 LHDs and a drill jumbo were scheduled to arrive and enter service in the next few months. In September, First Nickel hired Thomas M. Boehlert as its new president and CEO to replace William Anderson, who retired. Boehlert was most recently CFO and executive Vice President of  Kinross Gold Corp.

The Toronto-based company said the Lockerby capital development program is being completed as planned, on budget and in addition to the startup of production, has achieved several significant milestones as summarized below:
•    All production-maintenance and office clerical-technical employees have been recalled;
•    The main haulage ramp has advanced toward 65 Level;
•    Lateral development work has advanced on the 65-3 and 65-2 Levels;
•    Key infrastructure improvements have been completed; and
•    Several major elements of the underground mobile fleet have been replaced.