Base metals miner FNX Mining has opted not to renew a USD 100 million line of credit facility, because the costs involved would be significant and the company believes its balance sheet is strong enough to support planned spending in 2009.
The firm said that "As a result of the current global credit crisis, the cost of borrowing money has increased dramatically."
The company claims that market conditions beyond its control indicate that there would be significant costs to renew the line of credit, including material extension fees and increases in both the standby fees and interest rates.
FNX, which mines nickel, gold and platinum group metals in Sudbury, Ontario said in December that it had extended the suspension of nickel ore mining at its Levack mine and would halt nickel ore production from the adjoining McCreedy West mine because of low base metals prices. The plans would result in the loss of over 300 jobs.
At the end of 2008, the company had an unaudited cash balance of CAD 129 6 million and no debt and confirmed on last Friday that it remains fully funded to start initial production at its high grade copper/nickel/precious metal Levack Footwall deposit and to complete the development of the new Podolsky mine, which began commercial production last year.
The firm said that “the high grades contained in the LFD are expected to ensure strong operating margins even at today's commodity prices and will position the company to weather the current downturn and succeed in the next recovery. The company expects to exit the year with a strong cash balance."
No comments:
Post a Comment