FNX willcontinue to deliver ore to the custom mill until the end of May. Inaddition, the collective agreement between Vale Inco and its largestunionized labour force in Sudbury terminates on May 31, 2009. Anyprocessing facility interruption due to labour relations could alsoaffect FNX. FNX is considering several possible alternatives for itsSudbury Mining Operations and will provide more detailed guidance when itbecomes available. FNX has a strong cash position and, regardless of anyproduction interruptions, is well funded to continue the planneddevelopment of the LFD for initial pre-production later in 2009. TheCompany could also continue with the planned underground development anddetailed definition drilling at Podolsky.

Operatingactivity cash flow was $10.4 million and, after $13.1 million of cashoutflow for non-cash working capital, the consolidated cash flow fromoperating activities for this quarter was ($2.7) million or ($0.03) pershare, compared to $55.8 million ($0.66 per share) in the comparableperiod of 2008. Adjusted EBITDA for the first quarter was $12.4 million,compared to $48.3 million during the same period in 2008.Cash and cash equivalents as at March 31, 2009 were $114.6 million,compared to $129.6 million as at December 31, 2008. Working capital atthe end of this reporting period was $137.2 million, compared to $130.1million as at December 31, 2008. FNX continues to have zero debt.After including the $31.2 million dilution loss resulting from the GLWcommon share issuance, FNX incurred a loss of $26.2 million (($0.31) pershare) on consolidated revenues of $49.0 million in the first quarter of2009, compared to net earnings of $24.1 million ($0.28 per share) in thefirst quarter of 2008 on consolidated revenues of $140.7 million.Excluding the GLW dilution loss, the Company had adjusted earnings of$5.1 million ($0.06 per share). The quarterly loss also included apositive provisional pricing adjustment of $8.5 million and a non-taxabledilution loss of $31.2 million for the Company’s share of the change innet book value of GLW as a result of their common share issuance in Marchof 2009. Table 1 summarizes the key financial and operating measures.Mining OperationsProduction from Sudbury Mining Operations during the quarter generatedrevenues of $35.5 million, compared to revenues of $91.3 million in thesame period in 2008. Sudbury Mining Operations shipped a total of 105,000tons of ore during the first quarter, primarily (88%) from the PodolskyMine.

This excludes approximately 74,500 tons of production whichincluded normal inventory levels and a batch metallurgical test,stockpiled predominately on surface at the end of the quarter. Most ofthis inventory was processed in April 2009 and revenue and associatedcosts will be recognized in second quarter results.Total payable metals for the first quarter were 1.2 million pounds ofnickel, 9.7 million pounds of copper and 7,415 ounces of platinum,palladium and gold. The average realized prices for metals in thisquarter were US$5.00 per pound for nickel, US$1.77 per pound for copper,US$1,654 per ounce of gold, US$1,883 per ounce of platinum and US$278 perounce for palladium, all of which were higher than quoted market pricesand resulted in a positive price adjustment of $8.5 million. The averageminesite revenue per ton of ore shipped was $366, while the average cashoperating cost per ton of ore shipped was $218 leaving an averageminesite cash operating margin per ton of ore shipped of $148, comparedto $321, $159 and $162, respectively, in the same period of 2008.At the Podolsky Mine, production for this reporting period achieved theplanned mining rate of 1,000 tons per day. Tight grade control deliveredore at 10% above planned grades and initial narrow vein mining in theupper parts of the 2000 Deposit progressed well and initial stageperformances indicated that grades can be maintained (See Table 2).