The West Australian reported that shares in Mincor Resources fell after it said a sudden and unexpected deterioration in ground conditions at its Otter Juan underground nickel mine in Kambalda was likely to cut its mine life short by one year.

The company said in a statement that "At this stage it appears unlikely that full production will be restored, and the mine, which is one of the deepest in Australia and Kambalda's oldest operating nickel mine, is now expected to cease operations early in the 2012 calendar year, approximately one year earlier than budgeted in the June 2010 life of mine plan."

Mincor said its decision, which was based on detailed geotechnical analyses conducted over the past 10 days and the advice of two independent expert consultants, followed a series of seismic events at the bottom of the mine which damaged ground support in the drives that provide access to the lower production levels.

The company said its nearby McMahon ore body was unaffected and was expected to enter production during the December quarter. It said a range of other production opportunities existed elsewhere on Mincor's North Kambalda holdings, which could be capable of offsetting the production loss from Otter Juan.

Mr David Moore MD of Mincor said that the company's Kambalda operations would continue to provide a strong core of value and excellent cash flows. He added that "This strong cash generation, together with our USD 100 million bank balance, will be used to develop further growth opportunities both within and outside Kambalda."

(Sourced from www.thewest.com.au)