Nickel producer Timmins Nickel (TSE) says a contract with Giant Yellowknife Mines (TSE) for custom milling of ore from the Redstone mine near here will resume soon at Giant’s Schumacher mill. The old milling contract, which lasted eight months, was dropped last December after the price of nickel plummeted. In January, Timmins Nickel laid off 46 workers.
“We hope to be milling our ore by mid-May,” Stephen McIntyre, Timmins Nickel president, said. “We’re looking at some amendments, but we’re hoping to work out a long-term contract.”
The Redstone is now operating with 45 employees. That is a cut of 15 from last year when the mine was producing in a market where the price of nickel on the LME averaged US$6.05 per lb.
The company hopes to resume an annual production rate of four million pounds nickel by the middle of this month.
Timmins Nickel embarked on a cost-cutting program after the price of nickel dropped. The company is trying to reduce its operating costs to US$2.90 per lb. The owners eventually want an operating cost of US$2.75 per lb. and an annual production rate of 11 million lb.
The custom milling in Schumacher is expected to resume when Giant Yellowknife completes a contract with one of its gold customers.
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