Quadra FNX Announces Third Quarter 2010 Production Results and Commencement of Commercial Production at Morrison
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 10/18/10 -- Quadra FNX Mining Ltd. ('Quadra FNX' or the 'Company') (TSX: QUX) is pleased to announce the 2010 third quarter production results from its 100% owned mines; the Robinson mine ('Robinson') located in Ely, Nevada, the Carlota mine ('Carlota') located in Globe-Miami, Arizona, the Franke mine ('Franke') located in Region II, Chile, the Podolsky mine ('Podolsky') located in Sudbury, Ontario and the Levack operations which comprise of the Levack mine including the Morrison deposit ('Morrison') and the McCreedy mine (together 'Levack Complex'), also located in Sudbury.
Commercial production was reached at the Morrison deposit on September 1, 2010. Including the pre-production ore from Morrison produced prior to September 1st, the Company produced 57 million pounds of copper and 31,800 ounces of total precious metals ('TPMs') during the quarter, comprising 15,300 ounces of gold in concentrate from Robinson, and 16,500 ounces of payable TPMs from the Sudbury operations.
Key quarterly operating results:
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Production Q1 2010 Q2 2010 Q3 2010 YTD 2010
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Copper (Million lbs)
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Robinson (1) 32.0 23.7 26.7 82.4
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Carlota (2) 8.2 7.4 7.3 22.9
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Franke (2) 8.9 10.4 10.1 29.4
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Podolsky (3) 3.2 8.6 5.4 17.2
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Morrison (3) 1.6 3.5 6.3 11.4
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Levack Complex excluding Morrison (3) 1.3 1.2 1.2 3.7
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Total 55.2 54.8 57.0 167.0
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TPM (kozs)
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Robinson (1) 26.8 15.2 15.3 57.3
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Podolsky (3) 5.3 11.5 5.4 22.2
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Morrison (3) 0.9 1.9 3.0 5.8
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Levack Complex excluding Morrison (3) 7.7 8.3 8.1 24.1
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Total 40.7 36.9 31.8 109.4
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Note: The table above includes all the historical periods, including the
period prior to the merger of Quadra Mining Ltd. and FNX Mining Company
Inc. to form Quadra FNX Mining Ltd. on May 20, 2010. The table also
includes pre-production ore.
(1) Produced in concentrate
(2) Produced in cathode
(3) Shipped payable metal
The table below highlights the payable metal sales volumes, including the period prior to the merger of Quadra and FNX on May 20, 2010. Including 2.3 million pounds of payable copper sales from commercial production at Morrison the Company sold 56.9 million pounds of payable copper, and 33,500 ounces of payable TPMs during the third quarter.
Quarterly metal sales volumes:
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Sales Q1 2010 Q2 2010 Q3 2010 YTD 2010
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Copper (Million lbs)
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Robinson (1) 27.8 26.6 28.5 82.9
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Carlota (2) 9.5 7.7 6.6 23.8
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Franke (2) 10.3 7.8 12.8 30.9
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Podolsky (3) 3.2 8.6 5.4 17.2
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Morrison (3) 0.3 0.2 2.3 2.8
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Levack complex excluding Morrison (3) 1.3 1.2 1.2 3.7
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Total 52.4 52.1 56.9 161.4
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Copper price at beginning of period
($US/lb) (4) $ 3.34 $ 3.56 $ 2.96 $ 3.34
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Copper price at end of period
($US/lb) (4) $ 3.56 $ 2.96 $ 3.65 $ 3.65
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TPM (kozs)
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Robinson (1) 23.9 19.8 19.0 62.7
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Podolsky (3) 5.3 11.5 5.4 22.2
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Morrison (3) 0.3 0.2 1.0 1.5
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Levack complex excluding Morrison (3) 7.7 8.3 8.1 24.1
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Total 37.2 39.8 33.5 110.5
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Note: The table above includes sales from the period prior to the merger of
Quadra and FNX on May 20, 2010. The table excludes copper sales from the
Morrison deposit prior to commercial production since revenue there from was
offset against capital expenditures.
(1) Sold in concentrate
(2) Sold in cathode
(3) Sold payable metal
(4) The average price used to value provisionally priced copper
US OPERATIONS:
Robinson
In the third quarter of 2010, Robinson processed ore from both the Ruth and Veteran Pits, producing 26.7 million pounds of copper and 15,300 ounces of gold in concentrate. Head grades in the Ruth Pit improved from the levels achieved in the second quarter, however this was partially offset by lower throughput resulting from harder and more abrasive ore encountered at the bottom of the Veteran Pit.
During the quarter the Company continued confirmatory drilling at the bottom of the Ruth Pit. Based on these results and the evaluation of historical information, the historic underground workings are not expected to have any further impact on the remainder of 2010 or any impact on 2011 or on the reserve base of the Ruth Pit.
In the fourth quarter Robinson is expected to mine higher grades and softer material from the Ruth Pit, offsetting the impact of an unscheduled three day mill shut down to repair a faulty conveyor belt in October. The Company expects that 2010 copper production from Robinson will be at the lower end of the previously stated range of 115-125 million pounds of copper, while gold production is expected to achieve the target of 75,000 ounces.
Carlota
Carlota produced 7.3 million pounds of cathode copper during the third quarter. Copper production remained largely flat as a result of the lower grade material placed on the pads during the first half of 2010 and the lower-than-expected percolation rates associated with the high levels of fine material in the heap leach pads. Production levels in the fourth quarter are expected to remain at similar levels. The Company has assigned a technical team that is working on options to improve production going forward.
CANADIAN OPERATIONS:
Commercial production from Morrison was declared on September 1, 2010. The ramp up of Morrison is ahead of schedule and 29,300 tonnes of ore grading 11.2% copper was mined during the third quarter contributing 6.3 million pounds of payable copper sales. As previously noted, the focus at Morrison is on selective mining techniques with the objective of producing the same amount of metal in a smaller quantity of tonnes mined.
As a result of poor ground conditions, lower grade material was mined at Podolsky and payable copper sales declined to 5.7 million pounds in the third quarter. During the fourth quarter higher grade ore will be mined in the rehabilitated area and copper production will offset somewhat lower production from the third quarter. Overall the Company expects the Sudbury operations to meet their 2010 metal production targets.
CHILEAN OPERATIONS:
Franke
Franke produced a total of 10.1 million pounds of copper cathode in the quarter. Third quarter production was approximately 10% below expectations as a result of variable recoveries. While recoveries from the initial 3 metre pads stacked in the second quarter showed an improvement, some of the subsequent 3 metre pads are showing lower than expected recoveries. The optimum leach conditions remain a work in progress.
Changes made to the crushing and stacking equipment during the fourth quarter, as well as to the solution application and recovery strategies, are expected to improve recovery performance and throughput, although the full benefits will not be reflected in production until at least the first quarter of 2011.
The Company is also developing a revised block model which takes into account the full geological model and knowledge gained to date, and which should allow the operation to become more selective in its mining, thus contributing to optimization in leach pad feed quality.
Paul Blythe, President & CEO comments; 'The commencement of commercial production at Morrison was a significant milestone this quarter, and we expect the ramp-up of this orebody to remain ahead of schedule. With the additional drilling completed during the third quarter, we have become more confident that the underground workings in the Ruth Pit at Robinson will not impact our short term production outlook or our reserve base negatively.
During the third quarter we also continued to advance our technical review of how to deal with the greater than expected amount of fines in the Carlota orebody. We expect the review process, which includes extensive testing, to continue for several months. In the meantime, we are assessing short-term options which could potentially better align the current production profiles with the existing cost structure.
We also continue to implement several optimization initiatives at Franke, and expect recoveries and throughput to improve as a result. Our new block model should help us mine more selectively and allow for improved mine planning and greater control in ore handing. These initiatives, combined with the expected commissioning of the new ore stacker in December, should continue improved performance into 2011.
We also continue to make significant progress on the integration of the Quadra and FNX teams at both the corporate and mine site level. We now have a team in place that is capable of driving forward on our technical issues and our organic growth projects at Sierra Gorda and Victoria. The appointments of Michael Winship as COO and Don MacDonald as CFO add a wealth of experience to this team and to our company. We are now stronger and have more capacity to deal with our much larger operational and development project base.'
The 2010 third quarter financial results will be announced prior to market open on Wednesday, November 10th 2010. Dial in details of the accompanying conference call will be issued under separate press release.
About Quadra FNX Mining Ltd. (TSX: QUX)
Quadra FNX Mining Ltd. is a leading mid-tier copper mining company with corporate offices in Vancouver, B.C. and Toronto, Ontario. Quadra FNX produces copper and platinum group metals from its operating mines: Robinson in Nevada, Carlota in Arizona, Franke in northern Chile, and McCreedy West, Levack, which includes Morrison, and Podolsky in Sudbury, Ontario. The Company possesses several advanced development projects, including the Sierra Gorda copper-molybdenum project in Chile, the Malmbjerg molybdenum development project in Greenland and the Victoria project, an advanced exploration project in Sudbury. Quadra FNX employs approximately 1,650 people in North and South America.
This Press Release contains 'forward-looking information' that is based on Quadra FNX's expectations, estimates and projections as of the dates as of which those statements were made. This forward-looking information includes, among other things, statements with respect to future production at the Company's operating mines and other operations. Generally, this forward-looking information can be identified by the use of forward-looking terminology such as 'outlook', 'anticipate', 'project', 'target', 'believe', 'estimate', 'expect', 'intend', 'should', 'scheduled', 'will', 'plan', 'would' and similar expressions. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause Quadra FNX's actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information and is developed based on assumptions about such risks, uncertainties and other factors, including but not limited to:
- uncertainties relating to availability of updated equipment for Franke and the leaching rate achieved at Franke;
- uncertainties related to the impact of the recent storm event at Carlota and uncertainty relating to the leaching rate at Carlota;
- uncertainties related to actual capital costs, operating costs, production schedules and economic returns associated with the ramp-up of Morrison;
- uncertainties related to the extent to which historical mining activities at Robinson have removed mineral material expected to be present;
- risks related to maintaining current operating parameters at Podolsky;
- risks associated with the mineralogy and block model assumptions at all mines and projects including, in particular the complex Robinson mine;
- uncertainties related to actual capital costs, operating costs and expenditures, production schedules and economic returns from the Company's mining projects;
- inherent hazards and risks associated with mining operations;
- inherent uncertainties associated with mineral exploration;
- risks associated with Quadra FNX being subject to government regulation, including changes in regulation;
- risks associated with Quadra FNX being subject to extensive environmental laws and regulations, including change in regulation;
- risks associated with Quadra's need for governmental license and permits;
- political and country risk;
- risk of water shortages and risks associated with competition for water;
- Quadra's need to attract and retain qualified personnel;
- increases in off-site transportation and concentrate processing costs;
- risks related to the stability of mine pit walls;
- risks related to the need for reclamation activities on Quadra FNX's properties, including the nature of reclamation required and uncertainty of costs estimates related thereto;
- uncertainties related to the amount of funding required to achieve full production levels at Franke, Carlota and Levack;
- uncertainties related to the construction quality and structural design at Franke; and
- risks associated with fluctuations in costs of operating supplies and other inputs.
A discussion of these and other factors that may affect Quadra FNX's actual results, performance, achievements or financial position is contained in the filings by Quadra FNX with the Canadian provincial securities regulatory authorities, including Quadra FNX's Annual Information Form and the Annual Information Form filed by FNX prior to the merger between Quadra Mining Ltd. and FNX Mining Company Inc. Forward-looking statements are based on assumptions management believes to be reasonable, including but not limited to the continued operation of Quadra FNX's mining operations, no material adverse change in the market price of commodities, that the mining operations will operate in accordance with Quadra FNX's public statements and achieve its stated production outcomes, and such other assumptions and factors as set out herein. Although Quadra FNX has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate. Accordingly, readers should not place undue reliance on forward-looking statements. Quadra FNX disclaims any intent or obligations to update or revise publicly any forward-looking statements whether as a result of new information, estimates or options, future events or results or otherwise, unless required to do so by law.
Contacts:
Media and Investor Relations Contact:
Quadra FNX Mining Ltd.
Derek White
Executive Vice President, Corporate Development
604-807-7555
Quadra FNX Mining Ltd.
Nawojka Wachowiak
Vice President, Investor Relations
416-642-9209