Falconbridge reports "phenomenal" find. (Mining).

Some encouraging drill results by Falconbridge Ltd. has company officials buoyant about the long-term future of the nickel mining giant's longevity in the Sudbury region.

A surface diamond drilling program has identified an area of mineralized rock containing high grades of nickel, copper and platinum group metals on a property a little more than two kilometres north of the Sudbury Airport.

Though the discovery was first made last November, seven of eight holes drilled have intersected "significant" mineralization with traces of nickel, copper, platinum, palladium and gold.

"These grades are phenomenal," says Mike Welch, Falconbridge's manager of geology in Sudbury. "Some of the intervals are up to $2,000 Canadian per tonne in value," when compared to the current Craig Mine grade of $190 per tonne.

"If there's any potential size to this, this has significant ramifications for Falconbridge."

Four diamond drills are now operating on their Nickel Rim South property.

The contact was made in the underlying footwall rocks of the Sudbury igneous complex, a traditionally under-explored environment in the Sudbury basin.

The discovery represents a dramatic shift in the company's strategic thinking, Welch says, from the previous mandate of exploring for "elephant-sized" nickel deposits and discarding the smaller anomalies, towards concentrating on the small- and medium-sized, high-grade targets in the hopes of finding something larger.

Falconbridge's large flagship deposits in the Sudbury basin are dwindling and time is rapidly running out, he points out.

Depending on metal prices, the end of their reserves could come as soon as 2007-08, says Welch.

The company needs "to find (a major deposit) and get it into production in a timely fashion" and "those opportunities are closing very rapidly."

Company geologists are now going back over old properties and re-examining them with geophysics using powerful new systems such as UTEM IV as part of their historical bore-hole survey program. The program looks for smaller deposits to easily develop and feed Falconbridge's Sudbury smelter and processing operations.

"We will select under-explored areas in the basin and will evaluate the potential from there."

The current phase of diamond drilling at the Nickel Rim property will be wrapped by the end of June, at which time a complete conceptual study with a preliminary resource estimate will be carried out. The estimate will be sent to the company's board of directors for approval for an advanced exploration program.

Welch says there are "too many question marks" to estimate the size of the deposit, but he remains "hopeful" it could eventually lead to an operating mine.

"We think there are more targets and more opportunities to be generated to develop success in Sudbury.

"We can put this into production relatively quickly and that would allow us the opportunity, on an exploration side, for some breathing room to build up that reserve base (again).

"Natural resources such as mines do have finite lives and unless we make a significant discovery we had a finite life in 2007-08.

"What this means is more opportunities left in the basin for us and gives us more potential based on this new strategy plan we're trying to implement.

"So we're looking in the footwall; we're looking at smaller targets and along the way we may get lucky and finding something bigger than we expected."

In late April, the chief executive officer of Falconbridge, Derek Pannell, told industry analysts in a conference call that hundreds of millions of dollars could be saved if Falconbridge and Inco worked closer together on projects such as Nickel Rim.