Ursa Restarts Production At Shakespeare

Ursa Major Minerals (UMJ-T) has begun mining operations at its Shakespeare nickel-copper mine, 70 km west of Sudbury, Ont., after halting pre-production operations more than a year ago due to low metals prices.

Nickel has risen to a respectable US$8 per lb. recently after rising above US$20 per lb. in 2007, before sinking below US$5 per lb. in late 2008.

Copper is fetching around US$3 per lb. after a bit of a roller-coaster. It peaked around US$4 per lb. in mid-2008, but plunged to US$1.50 per lb. by the end of the year.

Ursa has sent contractors to the open-pit operation where mining and crushing are now underway.

Ursa president and CEO Richard Sutcliffe says, that it was both the higher metals prices and the fact that Xstrata (XTA-L, XSRAF-O) was able to ratify a labour contract with its Sudbury workers in early February, that enabled Ursa to move the project into commercial production.

“Given the labour uncertainty in Sudbury, it was a potential uncertainty for us,” Sutcliff says. “It was timely once that uncertainty was removed to drive the Shakespeare project forward.”

Many wondered whether Xstrata and its workers’ union would be able to make an agreement and avoid a strike.

About 3,500 unionized Vale (VALE-N) employees in Sudbury have been on strike since last July, while another 250 Vale employees in Labrador have been on strike since August.

About 500 of Xstrata’s Sudbury workers have been laid off, but this latest contract will send about 100 people back to work at the Fraser nickel-copper mine, which, like Shakespeare, was put on care and maintenance in February 2009 due to low metals prices.

Later this month, Ursa will begin trucking crushed Shakespeare ore to Xstrata’s Strathcona mill in Sudbury. About 25 trucks, carrying 40 tonnes each will ship a total of 1,000 tonnes per day to the Strathcona mill. The distance is about 100 km and the drive takes two hours.

Ursa expects to mine 200,000 tonnes of contained metals in concentrate totaling about 1.1 million lbs. nickel, 1.7 million lbs. copper, 55,700 lbs. cobalt and 3,100 oz. of precious metals over the course of 2010. The recovered and contained metals are subject to smelter recoveries and to further smelter deductions. The company says that guidance on costs will be released once all contracts are finalized.

The Shakespeare mine has probing able reserves of 11.8 million tonnes grading 0.33% nickel, 0.35% copper, 0.02% cobalt, 0.33 gram platinum per tonne, 0.36 gram palladium and 0.18 gram gold.

Sutfcliffe would like to eventually build a mill at Shakespeare, so that ore could be processed on site. The company has completed a feasibility study that envisions such a mill, but for now Sutcliff says it won’t be in the immediate future.

“In the current financial markets (a mill) is relatively hard to finance,” Sutcliffe says. “But, building a mill would be maximizing our deposit and our shareholders asset value.”

Sutcliffe couldn’t elaborate on how much it costs to have ore custom milled, but admitted it was “- substantially more expensive.”

For now the company will focus on generating revenue from the project to fund its other exploration projects.

Ursa is also planning to start up a drill program at its shallow, high-grade, massive sulphide targets at the past-producing Nickel Offsets property near Sudbury.