12 November, 2009
UPDATE 2-FNX Mining "ready to grow", could add assets-CEO
* Q3 loss C$0.65/shr vs yr-ago loss C$0.31/shr
* Company "back to growth mode"
* Could seek dormant assets in Sudbury area
TORONTO, Nov 12 (Reuters) - Canadian nickel and copper miner FNX Mining (FNX.TO) is ready to focus on growth after a challenging year, and could look to add more assets in the Sudbury, Ontario metals mining area, the company's chief executive said on Thursday.
FNX suspended nickel production last December due to falling prices, and its copper and precious metals output has been complicated by shutdowns at Vale Inco (VALE5.SA) operations that processes FNX ore.
But with metal prices up this year, and the company nearly ready to start mining its prized Levack Footwall deposit in the Sudbury area, the time could be right to think about expanding, CEO Terry MacGibbon said on a conference call.
"Last year at this time we went into survival mode. We have now gone back to growth mode," he said.
The company grabbed a foothold in Sudbury in 2002 when it bought up dormant mines from nickel miner Inco, which has since been acquired by Vale. Xstrata (XTA.L) also has assets in the area, following its 2006 purchase of Falconbridge.
"There are a number of properties that are inactive that remind us of some of the properties that we bought in 2002, and we would like the opportunity to become involved in some of those properties," he said.
"We've put ourselves in a position that if something comes available and its an interesting opportunity, we have the capability of doing it."
FNX has cash and investments of C$409 million, and completed a C$144 million financing in September.
QUARTERLY LOSS WIDENS
The company's third-quarter loss widened to C$58.5 million, or 65 Canadian cents a share, from C$26.5 million, or 31 Canadian cents a share, due to lower production and a C$57.9 million write-down of its investment portfolio.
Revenue plunged 75 percent, as a summer maintenance shutdown and then strike at Vale's processing facilities forced the company to stockpile its copper and precious metal ore.
That ore was shipped to Xstrata to be processed, and the revenue will be recognized in the fourth quarter.
Vale has restarted milling operations using non-union workers, and FNX has been sending its ore there since September, meaning fourth-quarter revenue will reflect production for both three-month periods.
Despite the production hiccups, FNX said it expects to meet its original 2009 operating guidance.
Asked if prices have risen ground to consider restarting nickel production, MacGibbon said the strike at Vale's operations -- most of its Sudbury operations are silent, as are its mine at Voisey's Bay and operations in Port Colborne, Ontario -- muddies the outlook.
"We don't think this is a realistic nickel price that one could use to determine sustainability," he said.
"However, at these prices, it if was (realistic), it would probably make sense to mine."
The company's shares were down 18 Canadian cents at C$10.12 on the Toronto Stock Exchange.
Cash nickel MNI0 was at $7.40 a pound, up 40 percent on the year.
The Levack Footwall is expected to reach commercial production around the middle of next year.
($1=$1.05 Canadian) (Reporting by Cameron French; editing by Janet Guttsman)
Source: http://www.reuters.com
UPDATE 2-FNX Mining "ready to grow", could add assets-CEO Added: (12.11.2009)
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