First Nickel plans to stop operations at its Lockerby nickel/copper mine in the Sudbury basin in Ontario, Canada, and discontinue underground ramp development due to low nickel prices.
After assessing various options, the Canadian mining and exploration company decided to discontinue ramp development and mine only the ore remaining on and above the 6,800ft level. The company plans to mine the remaining economic ore in the third quarter of 2015.
During this period, the Lockerby nickel/copper mine may either be put on a general maintenance schedule or be shutdown entirely.
First Nickel president and CEO Thomas Boehlert said: "Our employees at Lockerby have worked long and hard to make the mine a success.
"However, the operation is simply not economic at the current market price of nickel. We will now shift our focus to maximising production of the remaining ore and then transitioning to care and maintenance or closure."
Regarding alternatives to its outstanding debt, First Nickel is holding discussions with its secured lenders in light of the expected timing of ending of mining at Lockerby.
The Lockerby Mine reached full production during 2013.
In January, First Nickel announced plans to restructure the mine as part of its strategy to cut costs, increase exploration and extend mine life.
As part of its restructuring plans, the company announced the restarting of exploration diamond drilling at the mine, with a planned underground exploration drilling of 6,300m in 2015 and 7,200m in 2016.