1 Nowhere to grow but up for FNX.

Sudbury's third-largest nickel and copper miner is prepared to make another major exploration commitment in 2006.

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In branding themselves as "Canada's newest mid-tier mining company," FNX Mining Company president Terry MacGibbon's outfit has been a major player in the resurgence of activity in the Sudbury mining camp.

The ambitious Toronto miner expects to spend $14 million of its $16 million exploration budget within the Sudbury Igneous Complex, with half of that going into last year's hot new find, their highly prospective Levack footwall discovery on the north range.

And there may be more, says FNX vice-president and executive consultant Jim Patterson, depending on what this year's drill results yield from their Levack footwall and Podolsky exploration programs.

The company's claim to fame was its acquisition five years ago of five dormant Inco properties. That catapulted FNX into elite status as Sudbury's third largest miner.

Starting with 50 employees, their Sudbury workforce now totals almost 400, after inheriting some mining expertise from their former joint venture partner, Dynatec Corporation.

Last year, FNX posted net earnings of $4.6 million after buying out Dynatec's stake in the Sudbury properties and later acquiring Aurora Platinum's Sudbury holdings last year, expanding their land package by eight times.

Sudbury's north range has been historically good to miners with 16 operating or past producing mines.

FNX calls the discovery of high-grade copper, nickel, PGM's and gold mineralization in the footwall rocks behind the Levack Mine as the "most significant event" in their history.

"We're drilling underground and we have plans to bring production out of there," says Patterson.

Three surface drill rigs were planned for Levack Mine, with three underground rigs operating through exploration drifts from the neighbouring Falconbridge's Craig Mine to further delineate three deposits.

At the Levack footwall, Patterson says the high-grade narrow mineralized veins are very similar to other profitable deposits in Sudbury, including the nearby Inco 153 deposit at McCreedy East, Falconbridge's Fraser-Strathcona Deep Copper and Nickel Rim South.

The company is setting aside between $10 million and $12 million to continue rehabbing the Levack workings.

FNX is also eyeing a future mine at their Podolsky property on Sudbury's north range. With a portal already prepared last year (the surface entrance for the decline), shaft sinking continues to access their 2000 Deposit, a copper-nickel-PGM (platinum group metals) resource for production possibly by 2007.

Since starting their $42-million advanced exploration program years before, about $23.1 million has gone into sinking a shaft down to the 2,670-foot level at Podolsky. The balance of the $19 million will be spent this year on that, including building a crosscut into the deposit.

FNX is one of the few rare exploration companies to have an operating mine as its cash cow.

At their McCreedy West mine, the company has set a mining target this year of 650,000 tonnes of nickel-copper-PGM ore. Last year, they shipped out more than 437,000 tonnes of ore and produced eight million pounds of nickel and 6.2 million pounds of copper from McCreedy West, along with 98,000 pounds of cobalt and 10,000 pounds of precious metals.

Exploration drilling at McCreedy's Inter Main Deposit was designed to replace ore reserves mined during 2006.

Patterson says the plan each year is to mine 600,000 tonnes annually and try to replace that with intensive exploration so reserves stay constant.

"That won't go on forever because these are declining resources but we've been successful so far in replacing what we've mined each year."

Last June, FNX increased their land package by eight times with the acquisition of 1,600-hectare's worth of claims from Aurora Platinum Corp. including the historic Falconbridge and Falconbridge East mines in Garson that collectively produced 46 million tons of nickel ore.

The company believes the area has the potential for high-grade copper-nickel deposits inside the unexplored footwall. Another former Aurora property is their Foy Offset Dyke on the north range, which Patterson says host good deposits.

"We apply the same concept: Where there is a major mine, we say where is the footwall ore deposit? That's what applies to our property in the north range. We've found one footwall deposit that FNX is very confident of being a potential mine."

The total project budget for all their Aurora properties and the Falconbridge footwall is pegged at $4 million, which Patterson says is adjustable depending on what success they have.

As part of the Aurora deal, FNX also picked up some nickel properties in northwestern Ontario, but Patterson says much of that exploration work is early stage ground and geophysical surveying, diamond drilling and assaying work.

www.fnxmining.com

QUICK FACTS

FNX Mining

City: Greater Sudbury

Founded: 1984

President: Terry MacGibbon

No. of Employees: 400

www.fnxmining.com

By IAN ROSS

Northern Ontario Business