Junior nickel miner Timmins Nickel (TSE) has resumed production and is increasing output at its 51% owned Redstone mine near Timmins, Ont. The company says it will return to an annual production rate of four million pounds of nickel by May. Operations were cut back and mining crews were laid off only two months ago in the wake of falling nickel prices and high operating costs at the small underground mine.
The company says it has begun a cost-cutting program which will reduce planned operating costs to US$2.90 per lb. Shares of Timmins Nickel gained 30 cents recently to close at 95 cents, up from a low of 65 cents last month.
Production at the mine in February was 2,320 tons of broken ore at a grade of 3.52% nickel. Despite the earlier cutbacks, third-quarter production will be 18,406 tons grading 2.2%, the company says.
A feasibility study is also under way on the Shaw Dome deposits controlled by Timmins Nickel. That study will consider reconstructing a 1,000-ton-per-day concentrator at the old Langmuir No. 2 mine site to process ore from the Redstone, Tontine, Langmuir No. 1, and the newly discovered North zone.
The company eventually hopes to establish a production capacity of more than 11 million lb. of nickel per year at an operating cost below US$2.75 per lb.
Recently completed drilling in the new Langmuir North zone intersected a near-surface zone of disseminated nickel sulphides along a strike length of 650 ft. and to a depth of 600 ft. below surface. Widths for the zone average around 19 ft., the company says.
The zone is about 300 ft. northeast of the previously mined Langmuir No. 2 zone and underground workings. The highlights from eight recent holes include 16 ft. of 2.4% nickel, 19 ft. of 1.2% nickel and 18 ft. of 1.5% nickel at vertical depths of 250-300 ft. below surface.
Combined ore reserves from all properties are currently reported by Timmins Nickel at 1.7 million tons averaging 1.76% nickel. — 30 — File: TREVCO
gp xp-trevc.g feb 20
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