FNX Mining Company Inc.

FNX Mining Company Inc.

February 21, 2008 07:00 ET

FNX Continues Aggressive Growth at Its Sudbury Operations

TORONTO, ONTARIO--(Marketwire - Feb. 21, 2008) - FNX Mining Company Inc. (TSX:FNX) ("FNX" or the "Company") announces that it forecasts 2008 ore production from its Sudbury, Ontario operations to grow by 57%, increasing to 1,450,000 tons in 2008 up from 926,881 tons in 2007 and 624,525 tons in 2006.

In 2007, the Company mined and shipped for processing a total of 926,881 tons of production ore, slightly above the Company's forecast of 900,000 tons of ore. Also in 2007, the Company also mined and brought to surface an additional 32,960 tons of ore from its three mines but, due to mechanical problems and mill scheduling in December, was unable to ship this ore for processing prior to year end. Over and above the production ore shipped, the Company also mined and shipped an additional 18,129 of high-grade pre-production ore from its Podolsky Mine. The cash proceeds from the combined 51,089 tons of ore will be received in 2008. Payable nickel from production ore shipped for the year was 12.2 million pounds and payable copper 9.6 million pounds. Total Sudbury mining revenues for 2007 were $268 million, a positive variance to budget for the year due primarily to higher metal prices during the first half of 2007 (all dollar amounts and production numbers are unaudited and exclusive of the company's wholly-owned Dynatec Mining Services Business). The revenue per ton of ore sold was $289 per ton and the cash operating costs per ton of ore sold remained low at $108 per ton, providing a cash operating margin per ton of ore sold of $181 and a total Sudbury mining cash operating margin of $167 million. The Company's 2007 cash operating margins remained robust but were impacted by the strong Canadian dollar and the decline in nickel prices in the second half of 2007. The Company's cash cost to produce a pound of nickel net of by-product credits was US$3.02.

In 2008, the Company expects to mine and ship a total of 1,450,000 tons of production ore; with 735,000 tons coming from the McCreedy West Mine, 425,000 tons from the Levack Mine and 290,000 tons from the Podolsky Mine. The Company is unable, at this time, to provide detailed 2008 forecasts for payable metal as the 2008 accountabilities for the numerous separate and distinct nickel contact deposits at the Levack Mine and the very high-grade Cu-Ni-Pt-Pd-Au footwall deposits at the Podolsky Mine have not yet been finalized. However, a very dramatic increase in total copper and precious metals production is expected from the Podolsky Mine, which is expected to achieve commercial production early in 2008.

Capital, mine development and exploration expenditures are expected to be slightly higher then the record high $185 million budgeted for 2007 with significant surface and underground capital projects and extensive underground development and advanced exploration programs being conducted at the Levack, McCreedy West and Podolsky mines. The 2008 approved capital, mine development and exploration budget totals an historic high of $237.4 million and consists of $216.7 million for capital, mine development and advanced exploration programs and $20.7 million for general exploration (see Table 1 below). The 2008 Capital and Exploration Budget and related activities should be considered forward-looking statements (see related risks below). The Company expects to put a line of credit in place shortly to manage working capital and possible adverse currency and commodity price fluctuations.

The availability of skilled personnel is essential for the Company to continue to achieve its aggressive 2008 and beyond growth plans. The Company began 2007 with a total of 122 employees but expanded its workforce by year end to 692 employees. The acquisition of Dynatec Mining Services Business ("DMSB") in October 2007 brought the Company's total workforce to 1,741 employees, including 1,049 DMSB employees.

Table 1: 2008 Capital, Development and Exploration Budget ($ Millions)

and Advanced General
Exploration Exploration Total

McCreedy 26.8 3.8 30.6
Levack 58.4 8.4 66.8
Levack FW 59.8 - 59.8
Podolsky 64.0 3.0 67.0
Other Sudbury Properties - 5.5 5.5
Corporate 0.8 - 0.8
Mining Services Business 6.9 - 6.9
Totals 216.7 20.7 237.4

2008 Capital and Mine Exploration Plan

Capital and mine exploration programs at the McCreedy West mine for 2008 include replacing and increasing reserves, equipment replacement, mine development and sustaining capital. At the Levack mine, the focus in 2008 will be underground mine development to support production, construction of surface and underground ore handling facilities, detailed underground drilling and new equipment purchases. Expenditures at Podolsky mine will support the completion of the production ramp from the 1750 Level to the 2450 Level and mine development, equipment purchases, detailed underground drilling and construction of surface and underground facilities. A portion of the 2008 capital at the Podolsky property is allocated to driving the development ramp to the North and the Nickel Ramp deposits and related detailed drilling.

The bulk of the 2008 advanced exploration budget is to support the access ramp from the Levack 2650 Level and the access crosscut from Xstrata Nickel Limited's Craig Mine 4000 Level into Rob's Deposit and the Levack Footwall Deposit ("LFD"), respectively. Also included are the costs related to reconditioning the Levack No. 2 shaft from the 2650 Level to the 3600 Level and driving a second access ramp from the 3600 Level toward the LFD at depth. Additional detailed drilling of the LFD from underground and broader surface drilling of the LFD mineralized envelope are also included in the advanced exploration budget.

2008 Exploration Budget

The 2008 general exploration budget of $20.7 million excludes production support and mine planning information. The McCreedy West exploration program for 2008 will continue to explore around the Inter Main Deposit and to explore for additional nickel contact deposits on its eastern boundary towards the Levack mine. At Levack, the focus will be on defining the Main Depths discovery, testing for new nickel contact deposits and exploring for new Cu-Ni-TPM footwall deposits behind the know nickel contact mineralization. The exploration focus at Podolsky for 2008 is to define the potential of the Nickel Ramp deposit and look for additional 2000 type footwall deposits. Extensive surface drilling is also planned for the Aurora and Victoria properties.

Forward-Looking Statement

This news release contains certain forward-looking statements. These forward-looking statements are subject to a variety of risks and uncertainties beyond the company's ability to control or predict which could cause actual events or results to differ materially from those anticipated in such forward-looking statements. In this news release, statements about future expenditures, production forecasts from 2008 and beyond and future financing needs are examples of forward-looking statements. There is no guarantee that the 2008 capex plan, production forecast or need for future financing will be accurate. Forward-looking statements speak only as of the date on which they are made. The Company undertakes no obligation to publicly update any such statement or reflect new information or the occurrence of future events or circumstances. Accordingly, readers should not place undue reliance on forward-looking statements.

Contact Information

  • FNX Mining Company Inc.
    John Lill
    President and Chief Executive Officer
    (416) 628-5929
    FNX Mining Company Inc.
    David Constable
    Vice President Investor Relations
    (416) 628-5929
    Email: info@fnxmining.com
    Website: www.fnxmining.com