Junior miner is the belle of the ball: smart acquisitions and sky-high metal prices have propelled FNX stock to triple in value in 36 months.

Former Inco Ltd. employees are creating quite a stir on stock exchanges on both sides of the border by resurrecting abandoned mines in the Greater Sudbury area.

It may not have been in Inco Ltd.'s best interest to further examine the Levack Mine for potential discoveries. On the face of it, they appeared too small, but FNX Mining Inc. has found some "real exciting" results from assays pulled out of the Levack footwall, which extends approximately 10 kilometres.

FNX, the second most successful company on the TSE and fifth on the American Stock Exchange (AMEX) is expected to grow as more news from the exploration projects are revealed.

"Overall I don't think there is any company in North America that has traded better than us," Gord Morrison, FNX vice-president of exploration and a former Inco employee says.

FNX shares have soared in value by more than 140 percent since the beginning of the year. They are up threefold in the past three years, according to The Globe and Mail.

"We are debt free right now," Morrison says. "We have approximately $65 million in cash in the treasury and we have working capital of about $80 million."

It is unheard of for a mining company to post quarterly results in the first full year of production, Catharine Farrow, chief geologist and another former Inco employee says. But they made more than $37 million.

The company strings small projects together to form a sizable mineral cache.

The McCreedy West Mine, Aurora Sudbury projects, Kirkwood discovery, Podolsky property and the abandoned Levack Mine were originally owned by Inco. FNX signed an agreement to spend $30 million on the five properties to acquire 100 percent ownership in the mineral rights.

"We had five years to do this, but we did it in 18 months," Morrison says.

During a rehabilitation process at the Levack Mine experts were also exploring the footwall and discovered a new ore body with high-grade copper, nickel, platinum, palladium and gold indicators. The geology parallels or exceeds producing mines in Sudbury. The minerals were intersected approximately 4,000 feet down along a 500-ft strike length. An extensive drill program will continue until the end of next year. Right now, FNX is taking a two-pronged approach to the footwall discovery. The company has decided to explore the deposit from surface and from below through Falconbridge Ltd.'s Craig Mine infrastructure. The possibility of bulk sampling will be examined and so will the most cost effective way to bring minerals to surface.

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In the meantime, the 3,900-ft deep Levack Mine, with an estimated life of 15 years, has been rehabilitated down to the 1,600-ft level at a cost of $15 million, for the first phase. The second phase is expected to be significantly more expensive. The feasibility study should be completed in the first half of next year when ore development surfaces. Production on the six million in reserves is expected to start in next year's first quarter.

Although the Levack and McCreedy West Mines are approximately four kilometres apart, they are joined by an underground drift.

McCreedy West shipped 166,000 tonnes of ore in the last quarter to the Inco processing sites.

Inco has first right of refusal to all of the FNX ore mines.

They smelt it, sell the metal and pay FNX a fraction of the profit. Originally, ore taken from McCreedy West was shipped to Levack for hoisting which still may be an option for FNX.

The mine, which is expected to be open for 10 years, employs approximately 120 workers.

People do not always equate Sudbury with the platinum and palladium deposits, but the Sudbury camp is the third-largest producer in the world behind the Bushveld Complex in Africa and Talnakh in Russia.

Platinum group metals (PGM) prices are likely to rise, Morrison says, and Sudbury can play a more of a significant role as a supplier. Falconbridge is expected to be producing rich copper-platinum group elements (PGE) by 2010 from the Nickel Rim South deposit, Inco's McCreedy Mine East has significant PGEs and the Levack footwall and Podolsky zone are showing equal promise.

The Podolsky property has 60 employees on-site. A headframe has already been installed and the main shaft sunk to 1,200 ft with a goal to reach 2, 450 ft by the middle of next year when bulk sampling will occur. The total cost estimate is $30 million. An estimated 1,500 tonnes of ore a day will be produced over 10 to 15 years.

Since FNX began, more than $10 million annually has been invested in Greater Sudbury exploration programs. Last year, the company was originally going to spend $12 million until the exploration team discovered the new Levack footwall deposit. They made a budget revision to include another $2 million worth of work.

Morrison says the intent in the next five to 10 years is to become more prominent in minerals sector by acquiring new properties.

Recently the company officially acquired Aurora Platinum Corp. in June and thus 60 per cent of the Falconbridge Mine through the option agreement.

"We are continuing that option. We will have more like 70 percent by the end of the year," Morrison says.

The agreement is for the footwall, not the surface facilities: just the mining rights.

"In a lot of places we don't own the surface rights, but we do own the mineral rights."

The surface rights stay with the original owners. So far, the Podolsky deposit is the only site potentially set up for rehabilitation.

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As new projects come into production, exploration teams will be searching out new mineral leads.

FNX has an estimated 43 geologists, technicians, clerical and administrations staff in their employ.

Recently, a group of 40 international fund managers met with FNX management staff to go through the company's workings.

"Visits like these always go well because right now we are the belle of the ball," Morrison says.

www.fnxmining.com

By KELLY LOUISEIZE

Northern Ontario Business