Canadian Royalties gets go-ahead on nickel mine

Wed May 21, 2008 1:27pm EDT
 
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TORONTO (Reuters) - Canadian Royalties Inc said on Wednesday it has received provincial environmental approval to begin construction of its Nunavik nickel project in northern Quebec.

The company said it can also begin building a port in Deception Bay at the northern tip of the province.

The C$465 million ($474 million) mine, which is located just 20 km south of Xstrata PLC's Raglan nickel mine, is expected to eventually produce up to 27 million pounds of nickel a year and up to 50 million pounds of copper.

Under an offtake agreement signed last year, Canadian Royalties will sell its nickel concentrate from the mine to Russian metals giant Norilsk Nickel. Norilsk has also agreed to buy a 7.2 percent stake in the company for C$25 million.

The company's shares were down 7 Canadian cents at C$2.13 on the Toronto Stock Exchange early on Wednesday afternoon.

($1=$0.98 Canadian)

(Reporting by Cameron French; editing by Peter Galloway)