Creating independence in the nickel business.

Defying conventional wisdom, two Greater Sudbury entrepreneurs have decided to show Bay Street a thing or two about managing a junior mining company from their home town.

President and CEO Richard Murphy and CFO Guy Mahaffy moved Independent Nickel's head office from Vancouver to Sudbury after purchasing it, showing the rest of the country that success can be achieved without Vancouver's Howe Street district or their physical presence on Toronto's Bay Street.

"There are advantages in Sudbury because there is so much expertise here," Murphy says.

Three years ago the stock market valued Independent Nickel, formerly known as Seymour Exploration, at $2 million, light years away from the $60 million they are worth today.

A portion of the money raised will go toward a 20,000-metre drilling exploration program with hopes of adding to the 20 million tonne resource that has already been shored up at the Lynn Lake's Nickel Mine project, located in Northern Manitoba.

New studies confirmed existing resources and also identified new target zones at the Echo zone and Gulf zone.

The Echo target has a volume of approximately 17,000 million tonnes and is located a couple of hundred metres from the surface. It increases in grade the further downplunge it goes.

"It is probably too deep to open pit, but definitely easy to expedite from the first level," Murphy says.

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There are two drills on site at the smaller, but highly conductive Gulf zone. Murphy is looking to get a third drill going.

Together with Wardrop, they are examining the possibility of using the Farley shaft's existing infrastructure or dropping a new shaft into the ground altogether.

The company has no liability from historic operations with respect to environmental conditions. The previous owner Sherritt Gorden grew up on this property mining 20 million tonnes of ore until the mid-1970s, when low nickel prices forced the mine's closure.

A pre-feasibility study is expected to firm up the new zones into the elevated-resource category. A preliminary economic assessment completed in October of 2006, indicated a continued mine life of 9.6 years using 0.6 per cent as the nickel cutoff. Total pre-tax profits are expected to exceed $300 million with cobalt and other mineral findings enhancing the project.

There are a multitude of juniors with nickel resources around Lynn Lake, and it is with certainty all have been approached by larger mining houses looking to diversify their portfolio, Murphy says, yet another option exists. Juniors could conceivably cluster together to form one of Canada's new mid tier operations. Murphy has not ruled it out although they remain very tight lipped about future prospects. Ultimately, they are looking for shareholder value.

"What is more accretive," he asks rhetorically. "Do you talk with a potential buyer or do you talk to other guys and say 'let's get together.' Is getting taken out better for our shareholders, than to make your own company? It is probably largely a matter of timing. If a deal that you cannot say no to comes along first, then you have to do what is best for shareholders."

The property surrounding Independent Nickel is owned by prospector and developer Peter Dunlop. He has optioned it to Australian-based Western Areas, a mid-tier mining producer named as one of the top 10 growing western Australian companies for December 2006 quarter.

"We are basically the donut hole right now," Mahaffy says with a smile as he looks to Murphy.

Actually, we are the Boston cream donut," he says as Murphy joins in with a chuckle.

Western owns 20 per cent of Mustang Minerals, a base metal producing company that has claims in the Maskwa nickel project in Northern Manitoba.

A call was extended to Western Areas, however, there was no reply before publication.

And so the web tightens. Murphy says his company will always be a grass roots prospecting company. They have no plans to develop into a mid tier producer on their own. If the Lynn Lake property optioned off, Murphy will find other target zones in which to stake and explore.

He and Mahaffy recently announced the purchase of a two per cent net smelter royalty on their existing property, but they have since purchased a three per cent royalty on Victory Nickel's Minago property also located in Northern Manitoba.

The property is a couple hundred kilometres away from their existing property. More recently the company closed a $13 million in financing to purchase the royalties and advance the exploration projects.

"Probably within that day we had on the back of a napkin $33 million worth of orders."

After closing the book, they spent the next couple of days paring the numbers down by turning people away.

This is a far cry away from the Christmas party held three years ago when Mahaffy, Murphy and Daniel Oosterrman, the exploration manager, sat around the staff room table eating Subway sandwiches. Financing from the company's flow through shares had yet to be closed.

"We closed the financing a week later and looking back I think that was the lowest point the company had in terms of its evolution and, so it was only up from here," Mahaffy says, sitting in his office off Notre Dame Avenue.

Much of their success is due to the wise council from their board; Kerry Knoll, founder of Blue Pearl Mining and Kirk-land Lake boy Tom Obradovich of Aurelian Resources, Ron Arnold, president of Dalron Construction; Wayne Whymark, an explorationist on Manitoulin Island and Conrad Swanson make up their board.

By KELLY LOUISEIZE

Northern Ontario Business