(Adds detail, analyst comment, stock price, in U.S. dollars unless noted)
OTTAWA, Feb 21 (Reuters) - FNX Mining Co FNX.TO said on Thursday it expects ore production from its Sudbury operations to jump 56 percent in 2008, building on 2007 output that edged above its forecast.
FNX expects ore production to reach 1.45 million tons in 2008, up from 926,881 tons in 2007 and 624,525 in 2006.
The company could not yet provide detailed 2008 forecasts for payable metal, but said "a very dramatic increase in total copper and precious metals production is expected from the Podolsky mine, which is expected to achieve commercial production early in 2008."
FNX is planning a big spending push in 2008 to expand its operations, with capital, mine development and exploration budgets totaling C$237.4 million ($235 million). That surpasses record spending of C$185 million in 2007.
The company produces and explores for nickel, copper, cobalt, platinum, palladium and gold in the Sudbury region of northern Ontario. It also mines ore from the Levack complex in that region.
"They plan to continue to aggressively grow their Sudbury operations," UBS analyst Alec Kodatsky said in a note that maintained a "buy" rating.
"Details of the 2008 capex (capital expenditure) budget indicate FNX will focus a majority of the budget on developing the Podolsky, Levack and Levack Footwall deposits," he said.
FNX also said in addition to the 926,881 tons of ore processed in 2007, it mined 33,000 tons of ore that could not be shipped due to mechanical and scheduling problems.
Full-year payable nickel production totaled 12.2 million pounds and payable copper production was 9.6 million pounds.
Sudbury mining revenue for 2007 was C$268 million, which FNX said was better than budgeted and reflected higher metal prices in the first half of the year.
Revenue per ton of ore sold was C$289, with cash operating costs at C$108 per ton, which Kodatsky said matched his estimate.
The cash operating margin was C$181 a ton sold, with total Sudbury mining cash operating margin of C$167 million.
Cash operating margins stayed robust in 2007, but were affected by a strong Canadian dollar and declining nickel prices in the second half of the year, the company said.
FNX shares rose nearly 6 percent, or C$1.72, to C$31.85 on the Toronto Stock Exchange after the announcement.
$1=$1.01 Canadian Reporting by Susan Taylor; Editing by Rob Wilson