Voisey''s BayFrom IRC's press release today:
"Payable production from Voisey's Bay increased from 1.7 million pounds of nickel in concentrate in 2006 to 27.0 million in the quarter ended March 31, 2007. Metal prices also increased significantly during the first quarter of 2007, with average nickel prices on payable production up to $16.59 per pound from $6.79 per pound in the same period in 2006.
While concentrate sold during 2007 was up significantly at Voisey's Bay from the same period in 2006, it was less than a normal quarter of expected production from the mine. Production payable was negatively impacted by the strike at the Voisey's Bay operation from late July, 2006, to early October, 2006. Due to the nature of the sales agreements on the Voisey's Bay concentrates, in which settlement does not occur until 90 to 180 days subsequent to shipment from the mine, the impact from the strike was not reflected in the royalty payments until the first quarter of 2007. In addition, the first quarter payment reflected only limited revenue from the sale of copper concentrates because copper concentrate shipments are limited by CVRD Inco's agreements with the aboriginal people in Labrador. Under these agreements, copper concentrates can only be shipped between May 21 and Dec. 7 of each year. Under normal conditions, the company believes that first quarter production payable from Voisey's Bay will be at or above the average for the year.
Looking forward to the second quarter of 2007, the company also expects less than an average quarter of payable production during this period, due to the seasonal nature of the shipments from the mine (there are no nickel concentrate shipments between Dec. 7 and Jan. 21 of each year and again between April 7 and May 21). During these winter months, a smaller number of nickel concentrate shipments are delivered than would be expected, and, as noted above, there are no copper concentrate shipments at all during the period between Dec. 7 and May 21. The result, assuming constant metal prices, will be to reduce expected royalty revenues in the second quarter of each year. However, in 2007 the lower than average production expected to be payable in the second quarter should be more than offset by higher metal prices, as nickel prices continue at or near record highs.
The company believes that payable production from Voisey's Bay in the third and fourth quarters of 2007 and the first quarter of 2008 will be at, or above quarterly expectations."