Lundin Mining Powering Ahead As Eagle Mine Reaches Commercial Production
It might be tough out there, but that hasn't stopped Lundin Mining from reaching commercial production at its high-grade nickel-copper Eagle mine in Michigan ahead of schedule and on budget. What's more, analysts are calling for the mine to exceed its production guidance in 2014.
It's tough out there for resource companies of all sizes, but that hasn't stopped Lundin Mining (TSX:LUN,OTCMKTS:LUNMF) from powering ahead with its high-grade nickel-copper Eagle mine in the Upper Peninsula of Michigan. On Monday, the company announced that it has reached commercial production at the mine on budget and three months ahead of schedule. According to Monday's statement from Lundin, production began on September 23, well ahead of schedule and on budget. The company was targeting commercial production for the first quarter of 2015, but instead hit the milestone within two months of the mine's start up. Purchased by Lundin from Rio Tinto (ASX:RIO,LSE:RIO,NYSE:RIO) in 2013, the Eagle mine is expected to produce 360 million pounds of nickel and 295 million pounds of copper over a mine life of eight years. Commercial production Lundin defines commercial production at Eagle as "the ability to maintain average production metrics of 75% of designed throughput, 75% nickel recovery, and the production of on target grade nickel concentrate (11 - 16%) for a period of 30 days." To be sure, Lundin President and CEO Paul Conibear is proud of the company's achievement, and stated in Monday's release, "[t]he team at Eagle Mine has done an excellent job in accelerating the ramp up and delivering commercial operations ahead of expectations. Going forward, the Eagle Mine will be significant to the earnings and cash flow of Lundin Mining, and a major employer and economic contributor in northern Michigan." Commercial production at the Eagle mine is certainly a landmark event. As Dorothy Kosich of Mineweb notes, many mines in the Upper Peninsula of Michigan were closed in the 1960s, meaning that Eagle signifies an important return to mining for the state. In a research note from Haywood Securities, Kerry Smith similarly notes that the area has a long history of mining with excellent road, rail and port infrastructure.