Lockerby

The Company acquired a 100% interest in the Lockerby Mine property and related assets from Falconbridge Limited (now Glencore Nickel, a business unit of Glencore Canada Corporation) pursuant to an asset purchase agreement dated effective May 31, 2005 as amended by the amending agreement with Glencore Nickel dated November 1, 2010.

The Lockerby Mine is located southwest of the City of Sudbury and was developed and operated by Falconbridge Limited from 1974 until 2004, extracting over 8 million tonnes of ore during that period.  FNI acquired the Lockerby Mine in June 2005 and commenced commercial production in 2006 extracting an additional 364,000 tonnes to October 2008 when the mine was placed on care and maintenance due to low metal prices.

After careful planning and further development work at the project site, including the preparation of a 2009 feasibility study on the development and mining of the Depth Zone at the Lockerby Mine which demonstrated that the existing well-defined high-grade reserve could be the basis for a financial case for development that could extend mine life for more than five years, First Nickel re-commenced production on certain portions of the mine with a focus on the Lockerby Depth Zone in September 2011. The Company declared commercial production on July 1, 2012. According to the Lockerby Technical Report (as defined herein), at maximum production, the Lockerby Mine (focused on the Lockerby Depth Zone) is expected to produce approximately 10 million pounds of nickel and 7 million pounds of copper annually, at a total cash operating cost of approximately $5.56 per pound of nickel. FNI declared commercial production at the Lockerby Mine on July 1, 2012 and achieved its full, targeted annualized production rate of 10.0 million pounds of payable nickel in the first quarter of 2013.

2012 Stantec Study

The Company mandated Stantec Consulting Ltd. (Stantec) to complete an updated technical study on the Lockerby Mine to reflect operational and economic improvements to the mine development and mining sequence, and to reflect updated capital and operating cost information. The purpose of the technical study was to update the previous NI 43-101 report. Qualified persons employed by Stantec and Roscoe Postle Associates (RPA) visited the property on 06 June 2012.

SUMMARY OF MINERAL RESOURCES

Table 14.16 summaries the Indicated Mineral Resources that were converted to Mineral Reserves, for Lockerby Depth Zone.

Table 14.17 summarizes the current Mineral Resource estimate, exclusive of Mineral Reserves, for Lockerby Mine.

 

Lockerby Analyst Tour Presentation;

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