Elizabeth kirkwood doesn’t mind being called a follower. When shareholders ask why she would buy a mine deemed unprofitable by Falconbridge Ltd., she points to the success FNX Mining Co. has had in taking unwanted mines off Inco Ltd.’s hands.

“We want to be another FNX,” says Kirkwood, president and CEO of First Nickel Inc., a small, ambitious junior mining company based in Toronto. “It’s like being in the army: there are marines on the beachhead and we’re coming in afterward,
which is a lot easier.”

FNX added a new dimension to junior/senior mining partnerships when it purchased five of Inco’s former producers in the Sudbury basin in 2001. In exchange for the assets, Inco received an equity stake in FNX, seats on its board, $30 million for exploration expenditures and the right to process and market the ore.

Just another penny junior before the Inco deal, FNX is now a profitable producer with a market capitalization of $250 million.

First Nickel’s relationship with Falconbridge, Inco’s main competitor, is more straightforward than the FNX/Inco partnership, but the strategy is the same:
buy into base metal deposits too small to interest their owners, then take advantage of high commodity prices to put the deposits to production at low capital cost using contract mining, existing infrastructure and third-party mills.

In First Nickel’s case, the base metal deposits are the Dundonald nickel deposit near Timmins, Ont., and — if negotiations are successful — the Lockerby mine near Sudbury, which Falconbridge closed a few months ago.

At the beginning of the interview for this article, it was hard to imagine how this one-woman show could succeed. Although Kirkwood has been working in the mining industry, directly and indirectly, for more than 35 years, she has never ventured beyond the exploration side of the business.

But as the interview progressed, the distinct characteristics of a successful mining promoter (or “communicator of the opportunity,” as she says with a grin) emerged. Her enthusiasm is clearly infectious. Worth less than 40¢ each in the fall of 2004, First Nickel shares now trade at almost $1 a share, even though the company has no production to speak of yet.

Kirkwood also has the support of Falconbridge’s manager of nickel exploration, David Gower, and her financiers at Toronto-based MacFarlane Gordon Inc.
Her directors include William Anderson and William Brereton, president and vice president, respectively, of MPH Consulting Ltd., an international mining consulting firm based in Toronto.

Kirkwood was born in Windsor, Ont., and moved to Toronto as a child. She has three siblings, including Canadian author Barbara Gowdy, and two sons aged 20 and 23.

To be a survivor in the junior mining business, says Kirkwood, “You have to be lucky and hard-working, and you have to nurture relationships.” She has been running juniors since 1989, when she left her job as a clerk at a law firm specializing in junior mining. “I don’t feel I have to build an empire. I just want to build a really nice business,” she adds.

The Dundonald deal is relatively straightforward. Falconbridge sold a 100% interest in the property in exchange for an 18.4% interest in First Nickel, exploration commitments totalling $1.75 million by the end of 2005 and the right to participate in future financings. First Nickel is currently drilling the deposit using the proceeds of an $11.5-million IPO. Initial results are encouraging.

The Lockerby purchase is more complex. First Nickel must negotiate not only with Falconbridge but also with the Sudbury Mine Mill and Smelter Workers Union’s Local 598, a chapter of the Canadian Auto Workers.
Falconbridge and the union have a long history of management/labour disputes, including a strike by the
1,000-member-strong union last year.

When Kirkwood realized the union might be a hurdle to First Nickel’s $1.5-million purchase of the Lockerby assets, instead of waiting for Falconbridge to mediate, she picked up the phone and dialled the union boss to explain her plan.

Now First Nickel and the union are negotiating a collective agreement to cover the miners during the 18-month period designated for exploration. At the end of that time, First Nickel will make a production decision or return the mine to Falconbridge along with $5 million to cover environmental liabilities. The final collective agreement will be renegotiated as part of a feasibility study and will include contract miners MacIntyre & Associates Ltd., based in Kirkland Lake, Ont.