TORONTO (miningweekly.com) – TSX-listed Ursa Major Minerals has started mining operations at its Shakespeare nickel/copper mine, 70 km west of Sudbury, Ontario, in response to firmer metals prices and after Xstrata Nickel, which processes ore from the mine, averted a strike by its Sudbury workers.

Ursa began mobilising contractors to the site this week and mining and crushing operations are currently under way, the firm announced on Thursday.

The company plans to begin truck haulage this month to deliver 200 000 t of ore for processing at Xstrata's Strathcona mill, in Sudbury, in 2010.

Ursa and Xstrata signed a 24-month processing agreement for Shakespeare ore in November last year.

Based on previous grades and metallurgical results, Ursa expects that it should produce contained metals in concentrate of around 1,1-million pounds of nickel, 1,7-million pounds of copper, 55 700 pounds of cobalt and 3 100 oz of precious metals.

Guidance on costs will be released once all contracts are finalised, the company said.

"The significant improvement in nickel, copper and platinum prices over the past year and the ratification of Xstrata's labour contract in Sudbury earlier this week allows Ursa Major to move forward into commercial production,” said CEO Richard Sutcliffe.

“The cash flow from the Shakespeare mine, combined with our successful exploration record, will place Ursa Major in a strong position for growth,” he added.

Preproduction mining operations at the project were halted in late 2008, in response to weak commodity prices.

Shares in the company rose 5,6% on Thursday, to 9,5 Canadian cents apiece by 15:05 in Toronto.

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.