TORONTO (miningweekly.com) – Toronto-based FNX Mining has posted a bigger third-quarter loss this year than in 2008, after revenue dropped 75% and the firm recorded a big impairment charge on its holding in fellow Canadian Gold Wheaton.

Brazilian-owned Vale Inco, which has a long-term processing agreement covering all FNX ore from its Sudbury, Ontario, mines, was hit by a strike in July, forcing the continued shutdown of all its operation in the region, which were already halted for an extended maintenance period.

Vale has since restarted some mining and its mill using nonstriking staff, but the effect on third quarter results for FNX was that most of the ore produced in the period went into inventory, with only C$18,8-million in revenue recognised for the quarter.

FNX reported a net loss for the third quarter of C$58,5-million, compared with a C$26,5-million loss a year earlier.

The company also recorded a C$57,9-million impairment to its investment portfolio this quarter, including a C$53-million impairment loss recognised on its investment in Gold Wheaton.

The company said it still believes in the “long-term value” of its investment in Gold Wheaton but was required to record the writedown because of accounting rules.

Ore produced during most of June, July and August – about 156 000 t – was shipped to Xstrata Nickel's Sudbury facilities for processing, under an agreement announced in August.

That revenue will be recognised in the fourth quarter, said FNX CEO Terry MacGibbon.

The company has been shipping ore to Vale Inco's reopened processing facilities since September and expects to continue to do so, subject to any possible labour interruptions, he said.

"The third quarter of 2009 was particularly challenging for the company's Sudbury operations, with nearly all production being stockpiled as inventory,” MacGibbon said.

However, he reiterated that the company still expects to meet its operating forecasts for the year.

“Revenue from production in both the third and fourth quarter will be recognized in the fourth quarter and cash will be received in the first half of 2010.”

FNX is currently producing from the copper and precious-metals rich Rob's deposit at its Levack mine, PM deposit at McCreedy West and 2 000 deposit at the Podolsky operation.

It is also developing the Levack Footwall deposit, at Levack, and expects to have it in commercial production around mid-2010.

During the third quarter, the company's Sudbury operations shipped and sold only 9 302 t of copper-precious-metal ore and placed another 176 000 t into inventory, compared with 347 000 t of ore shipped in the same period of 2008.

FNX ended the third quarter with C$258,2-million in cash and C$151,1-million in investments and no debt.

Working capital at the end of the third quarter was C$256,3-million, compared with C$137,7-million at the end of June.

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