TORONTO (CP) -- In early trading on the TSX, First Nickel stock dropped two cents to four cents in trading of nearly 700,000 shares. The shares resumed trading Monday after a trading halt.
On Sunday afternoon, the Toronto-based nickel miner said it would suspend operations at the mine, a decision that followed an extensive evaluation of mining scenarios and likely near-term metal price projections. That review ruled out the continuation of operations at the mine near Sudbury, Ont., the company said in a release.
The Lockerby Mine southwest of Sudbury will be kept in ready condition through the care and maintenance program that will enable a return to production when economic conditions improve and while First Nickel evaluates its options.
The company will continue to explore its properties located in the Sudbury basin as well as northern and eastern Ontario.
"Regrettably, the prevailing nickel prices are below Lockerby's cash costs per pound of payable nickel even though the company has worked diligently throughout 2008 to reduce costs," said William Anderson, president and CEO of First Nickel.
"We believe this is the best option to conserve cash and position the operation for future success while maintaining the long-term benefit to the community and our shareholders."
The company says affected employees will be provided with transition support.
"We intend to work with those who are displaced to help them relocate elsewhere in the industry," said Gerry Bilodeau, vice-president of operations.
First Nickel acquired the Lockerby mine in mid-2005 and began commercial operations in 2006.
The company's move follows similar decisions by other miners, who have scrapped planned mine expansions, cut operations and laid off workers because of low metal prices.
(c) The Canadian Press