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Dec 29 (Reuters) - Canadian miner CaNickel Mining Ltd said it will cut production at its flagship Bucko Lake Mine by nearly a third due to unfavorable nickel prices and to preserve capital.

Nickel prices, which had peaked at just under $29,500 a tonne in late February, have largely been on a downslope since. LME three-month nickel currently trades for $18,195 a tonne.

The company, formerly known as Crowflight Minerals Inc, said the period of reduced operations at the mine is uncertain at this time.

CaNickel will reduce production at the mine located in Manitoba to 400-500 tonnes per day (tpd) from the current 600-700 tpd. This will reduce the company's expenses to about C$1.7 million per month from C$2.7 million per month, the company said in a statement.

The company also entered into an agreement with Hong Kong-based Luckyup Investment Ltd to increase its one-year term debt facility to $25 million from $15 million.

Shares of the company closed at 4 Canadian cents on Thursday on the Toronto Stock Exchange.