FNX Mining Company Inc.
TSX : FNX

FNX Mining Company Inc.

December 14, 2006 07:00 ET

FNX Reopens Levack Mine

TORONTO, ONTARIO--(CCNMatthews - Dec. 14, 2006) - FNX Mining Company Inc. (TSX:FNX) announces that it has reopened its 100% owned Levack Mine located in the Sudbury Basin mining district, Ontario, Canada. The Levack Mine, which is contiguous and joined underground to the Company's operating McCreedy West Mine (collectively called the "Levack Mine Complex"), has undergone an extensive two-year surface and shaft rehabilitation and mine development program designed to put the mine back into commercial production. An additional $58 million of capital and mine exploration is planed in 2007 to complete the surface facilities, purchase mine production equipment, develop additional deposits in the mine, convert resources into reserves and to discover new nickel contact and copper-precious metal footwall deposits.

The first Levack Mine ore to be produced since the mine was closed in 1999 was recently brought to surface for crushing, sampling and shipping to the CVRD-Inco's Clarabelle Mill. The mine start-up was successful and a total of about 8,000 tons of pre-production ore is expected to be produced from the Levack Mine during the rest of December.

Commercial production is expected to commence from the Levack No. 7 Deposit in January 2007. Additional Levack deposits plus remnants and extension of previously mined deposits are expected to be put into commercial production during the year. By mid-year, production is expected to reach about 1,500 tons of ore per day with 2007 production planned at 265,000 tons of ore with a diluted mine grade of 1.6% nickel and 0.65% copper and 0.05% cobalt. The annual production forecast for 2008 and beyond is about 470,000 tons per year. FNX Mining published in their 2005 Annual Report and on Sedar National Instrument 43-101 measured and indicated mineral resources totaling 4.94 million tons with an undiluted grade of 2.03% Ni and 1.00% Cu and the inferred mineral resources total 0.73 million tons with an undiluted grade of 1.91% Ni and 0.88% Cu.

Ore from the Levack Mine will be hoisted to surface through the rehabilitated Levack No. 2 Shaft and initially trucked to the McCreedy West surface facilities, crushed, sampled, weighed and shipped to the Clarabelle Mill for processing. The Levack surface crushing and sampling facilities are currently being installed and are expected to be operational by mid-2007, at which time, the Levack nickel ore will be crushed, sampled and shipped from the Levack Mine site. The possibility of tramming the McCreedy West nickel ore across the 1600 Level later in 2007 and hoisting it to surface through the Levack No. 2 shaft is currently being designed and engineered and, if implemented, will increase the 2007 production forecast. The Levack Mine Complex cash operating costs, when in full production, are expected to be similar to those at the McCreedy West Mine. The Levack ore will be treated at the Clarabelle Mill under an offtake agreement with CVRD-Inco similar to the one in place at the McCreedy West Mine.

Terry MacGibbon, CEO and President of FNX Mining stated..."We are delighted to put the Levack Mine back into production. It has been a great Sudbury Basin producer for over 62 years and we expect it will be a significant producer for FNX Mining for many years to come. It was closed during a period of record low nickel prices and it is appropriate that it is being re-opened during the current historic high commodity prices. Levack has been an integral part of FNX's growth strategy and is the third of the four ore deposits we will put into production in the Sudbury Basin over a five year period. In addition, it has excellent potential for the discovery of new nickel contact and copper-precious metal footwall deposits. The established Levack surface and underground infrastructure will, if warranted, allow the Levack Footwall Deposit to be put into production quickly and with lower capital cost...."

The Levack Mine has been one of Canada's great mines. It was discovered in 1887 and first mined by the Mond Nickel Company in 1914 through the No. 1 Shaft. Mining continued until 1929, when the surface plant was destroyed by fire. That same year, Inco Limited purchased the property but did not resume mining until 1937 when the No.2 Shaft was collared. The Levack Mine operated continuously from 1937 to 1999, when it and the adjacent McCreedy West mines were closed due to record low nickel prices (less than US $2.00/lb of Ni). Total production at the Levack Mine was 60.2 million tons of ore grading 2.0% Ni and 1.3% Cu. At current commodity prices (December 8, 2006) the gross value of the historic production from the Levack Mine exceeds $45 billion.

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 and future financing needs are examples of forward-looking statements. There is no guarantee that the Levack production forecasts and operating cost 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.
    Terry MacGibbon
    President and CEO
    (416) 628-5929
    (416) 360-0550 (FAX)
    Email: info@fnxmining.com
    or
    FNX Mining Company Inc.
    Dave Constable
    Vice President Investor Relations and Corporate Secretary
    (416) 628-5929
    (416) 360-0550 (FAX)
    Email: dconstable@fnxmining.com
    Website: www.fnxmining.com