The major will develop McCreedy East’s Main and West orebodies, which contain reserves of 8 million tonnes grading 1.88% nickel and 0.84% copper, plus 0.91 gram platinum group metals (PGM) per tonne.
The new sources of feed will allow Inco to boost daily production at McCreedy East from the current 2,700 tonnes to 4,350 tonnes by late 2004, when full production rates are expected to be achieved.
By 2005, McCreedy East will be producing 48 million lbs. (21,792 tonnes) nickel and 92 million lbs. (41,768 tonnes) copper annually, up from the current 29 million lbs. (13,166 tonnes) nickel and 82 million lbs. (37,228 tonnes) copper.
In addition, Inco says McCreedy East has other mineral zones with “excellent potential” to extend the mine’s life further.
Inco’s decision to expand the McCreedy East mine is the latest in a series of good-news announcements for the company’s Canadian operations.
In late May, Inco’s Ontario Division reached a new 3-year collective-bargaining agreement with its 3,200 unionized workers, who are represented by the United Steelworkers Locals 6500 and 6200.
Inco says the deal represents a breakthrough whereby workers will now participate in a profit-sharing arrangement, pocketing an extra C25 per hour for every US$10 million in operating earnings at the division.
For its part, the union says it has achieved a “major victory” by negotiating a 40% reduction in the contracting-out of services and by establishing a committee, made up of both union and management members, that will focus on contracting issues.
Other highlights of the agreement were significant wage and pension increases.
Inco estimates that labour costs at the Ontario Division are currently about US9 per lb. nickel of the division’s production, or US$19 million annually. The company predicts that, by the end of the new 3-year agreement, its total labour costs will have risen by about 8%.
Earlier this year, Inco announced it would deepen its Birchtree nickel mine in Thompson, Man., and unveiled attractive resource figures for its high-grade Totten and Kelly Lake discoveries in the Sudbury basin.
Newly defined resources at the dormant Totten mine total 8.4 million tonnes grading 1.42% nickel, 1.9% copper and 4.7 grams PGM, including inferred resources of 1.6 million tonnes at 1.26% nickel, 1.61% copper and 5.7 grams PGM.
At Kelly Lake, resources are pegged at 10.5 million tonnes grading 1.77% nickel, 1.34% copper and 3.6 grams PGM.
By the fall, Inco expects to have completed a new feasibility study at Totten, and by year-end it hopes to have made a production decision at Kelly Lake.
Inco is in the middle of an extensive underground and surface exploration program at its Ontario Division. With US$7.7-million budgeted for this year, the program represents the highest level of exploration at the division since the 1970s.
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