VANCOUVER — With $144 million from a recent financing essentially doubling its cash coffers, FNX Mining (FNX-T, FNXMF-O) has a nice problem: Figuring out what to do with about a quarter-billion dollars.
About half the money, according to FNX Mining’s vice-president of investor relations David Constable, appears to be destined for preexisting capital requirements and general working capital.
FNX is developing the high-grade Levack footwall deposit (LFD) of its Levack mine in the northwest portion of Ontario’s Sudbury basin. The company has pegged indicated resources on a small portion of LFD at 683,000 tonnes grading 8.09% copper, 1.26% nickel and 7.76 grams combined platinum, palladium and gold per tonne.
So far, FNX has spent a couple hundred million dollars on the development. For the rest of 2009, Constable says FNX will spend a further $40 million and next year, $35 million more. Add to that general working capital and you get a tally of about what FNX already had in the bank before it raised $144 million.
That, by and large, liberates most of the funds from the $144-million financing for what FNX called in an August press release “future business opportunities,” or what Constable calls “swagger money.”
He says FNX has solid growth plans in the next couple of years, in particular with LFD, but that the part of the company’s project pipeline that needs additions most is the two-to four-year horizon.
“If we don’t have something in that part of the pipeline next year, you know, I’d be disappointed,” he says.
While there are few specifics on just who FNX might be eyeing, Constable explains that the company is actively considering assets that fit its profile: underground, any commodity, in the Americas and robust economically.
Geographically, Constable says FNX would first target the area it knows best, Sudbury, but will consider any high-quality project, especially if it is in the Americas — though he adds: “Not a giant open-pit mine in the Andes.”
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