In January 2013, the Company entered into a debt facility in the amount of $5 million with Resource Capital Fund V L.P. ("RCF V"), maturing on December 31, 2013. The debt facility with RCF V was followed in March 2013 by entering into an additional debt facility in the amount of $5 million with a fund managed by West Face Capital Inc. ("West Face"), also maturing on December 31, 2013. The funds provided by these facilities provided additional working capital for the Company.
Additionally, on April 1, 2013, the Company signed amendments to restructure its outstanding indebtedness with BNS, RCF IV, RCF V and West Face, subject to TSX approval. The aggregate indebtedness of US$20 million will be extended to March 31, 2015. The credit facility with BNS will be converted to a revolving credit facility and the principle amount will be increased from US$10 million to US$15 million. The funds provided by these loan facilities will provide additional working capital for the Company in its 2013 operations. The 2013 plan assumes that development will continue to the 68 level by the third quarter. Trade-off studies are being completed on development and mining plans to determine the optimal mining sequence beyond the 68 level to maximise the return on capital.
Capital expenditures for 2013 are anticipated to be approximately $16.4 million, of which, $11.2 million relates to development programs on the Lockerby Mine.
General and administrative
General and administrative expenses for 2013, excluding stock-based compensation, are estimated to be approximately $4.3 million. Financing costs and exploration costs are estimated to be approximately $1.8 million and $2.7 million, respectively.
The foregoing scientific and technical information has been prepared or reviewed by Paul C. Davis, P.Geo., Vice-President Exploration of the Company. Mr. Davis is a "qualified person" within the meaning of National Instrument 43-101.
The Company follows rigorous quality control practices and procedures in full compliance of NI 43-101, and these are described on the Company's website and in all technical news releases.
FNI is a Canadian mining and exploration Company. The Company's mission is to be the most dynamic North American emerging base metal mining Company in which to work and invest and to be respected in the communities in which we operate. FNI is in the process of ramping up to full production at its Lockerby Mine in the Sudbury Basin in northern Ontario. Once the Lockerby Mine reaches full production, it is expected to produce at a rate of approximately 10 million pounds of payable nickel and approximately 7 million pounds of payable copper annually, providing a strong base of cash flow from which to grow the Company. In addition to the Lockerby Mine, the Company owns exploration properties in the Sudbury Basin, the Timmins region of northern Ontario and the Belmont region of Eastern Ontario. FNI's shares are traded on the TSX under the symbol FNI.
Cautionary Statement Regarding Forward-Looking Information
Certain statements contained in this news release may contain forward-looking information about FNI. Forward-looking information can often be identified by the use of forward-looking terminology such as "anticipate", "believe", "continue", "budget", "forecast", "estimate", "schedule", "expect", "goal", "intend", "target", "potential", "objective", "may", "plan" or "will" or the negative thereof or variations thereon or similar terminology. Forward-looking information may include, but is not limited to: the continued operation of the Lockerby Mine; expectations of obtaining financing in the near term; future financial or operating performance of the Company and its projects; the future price of metals; the long term supply and demand for nickel; continuation of exploration activities; mineral reserve and mineral resource estimates; the realization of mineral resource estimates; costs of production and key supplies; capital, operating and exploration expenditures; forecasts of sales and production; costs and timing of the development of new and existing deposits; costs and timing of future exploration; the requirements for additional capital; government regulation of mining operations; environmental risks, reclamation expenses and/or title disputes or claims.
By its nature, forward-looking information is based on certain factors and assumptions which involve known and unknown risks, uncertainties and other factors which may cause the actual results, realization of mineral resources, performance or achievements of the Company, financial position or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. Accordingly, actual events may differ materially from those implied by any forward-looking information. Readers are cautioned not to place undue reliance on forward-looking information, which speak only as of the date the statements were made and readers are also advised to consider such forward-looking information while considering the risk factors set forth in the management's discussion and analysis for the year ended December 31, 2012 under the heading "Risks and Uncertainties" and under the heading "Risk Factors" in the Company's Annual Information Form for the year ended December 31, 2012. The Company disclaims any intention or obligation to publicly update or otherwise revise any forward-looking information whether as a result of new information, future events or other such factors which affect this information or to explain any material difference between subsequent actual events and such forward-looking information, except as required by applicable law.
(1) Non-GAAP Financial Measures The cash cost per pound of nickel produced, and total production costs are non-GAAP financial measures that do not have a standardized meaning under International Financial Reporting Standards ("GAAP"), and as a result may not be comparable to similar measures presented by other companies. Management uses these statistics to monitor operating costs and profitability, and believes that certain investors use this information to evaluate the Company's performance and ability to generate cash flow in addition to conventional GAAP measures. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Total cash production costs include mining costs, treatment costs, equipment operating lease costs, mine site general and administration costs, environmental costs, Vale royalty, transportation costs, and refining costs of concentrate, less by-product revenue from sales of copper, cobalt and PGE's. The cash cost per pound for the year ended December 31, 2012 was determined by dividing cash production cost for the commercial production period by payable nickel production in the same period.
First Nickel Inc.
President & CEO
CHF Investor Relations
Senior Account Manager
416 868 1079 x 228
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