Quadra FNX Mining Ltd. Announces Q4 2011 Production & Victoria Resource Update
16.01.2012 | Marketwire
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 01/16/12 -- Quadra FNX Mining Ltd. ('Quadra FNX' or the 'Company') (TSX: QUX) announces that consolidated payable production for the three months ended December 31, 2011 totaled 59 million pounds of copper, 24 thousand ounces of total precious metals ('TPMs') and 3 million pounds of nickel. Production for 2011 totaled 220 million pounds of copper, 103 thousand ounces of TPMs and 10 million pounds of nickel, which was within the Company's previously stated guidance range. All amounts are in US dollars unless otherwise stated.Paul Blythe, President & CEO comments, 'Pending our securityholders' consideration of KGHM Polska Miedz S.A's all-cash offer, our focus on our operations and development projects has remained unchanged. The key at Robinson continues to be increasing operating flexibility, through the various measures previously discussed including bench widths, pit slopes, stockpile buffers and working faces. Although mill maintenance and slope stability issues precluded an increase in actual copper production compared to the previous quarter, the total tonnes mined increased by over 40% quarter over quarter, setting the stage for 2012. At Morrison the previously announced lease agreement with Xstrata Nickel relating to the Craig shaft was completed during the quarter and transition work began immediately. Agreements were also reached that significantly increased our mineral rights footprint at Sierra Gorda and the project remains on schedule and budget. At Victoria a new, larger resource was also established, taking into account 2011 drilling, as engineering, consultation and permitting activities continued.'
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Production Sales
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Total Total
Q1 2011 Q2 2011 Q3 2011 Q4 2011 2011 2011
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Copper (Million lbs)
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Robinson (1) 20 21 27 27 95 90
Carlota (2) 4 6 7 7 24 23
Franke (2) 7 9 9 9 34 32
Morrison (3) 9 10 10 9 38 38
Podolsky (3) 5 7 6 6 24 24
McCreedy West (3) 1 2 1 1 5 5
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Total 46 55 60 59 220 212
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Copper price at
beginning of period
($/lb) (4) $ 4.40
Copper price at end
of period ($/lb)
(4) $ 3.43
TPM (kozs)
----------------------
Robinson (1) 6 7 9 8 30 34
Morrison (3) 6 8 8 8 30 30
Podolsky (3) 7 6 7 6 26 26
McCreedy West (3) 7 6 2 2 17 17
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Total 26 27 26 24 103 107
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Total Nickel
(Million lbs) (3) 2 2 3 3 10 10
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Total Copper
Equivalent (Million
lbs) 62 73 78 75 288
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1. Payable Cu and Au produced in concentrate
2. Payable Cu produced in cathode
3. Shipped payable metal
4. The average price used to value provisionally priced copper
5. Cu Equivalent amounts are based on previously announced LOM commodity
prices: Cu at $2.50/lb, Ni at $7/lb, Pt at $1500/oz, Pd at $400/oz, Au
at $1000/oz and Mo at $12/lb and excludes the impact of the Franco
Nevada Agreement
FOURTH QUARTER OVERVIEW:
In the quarter, Robinson Mine delivered record ex-pit mining volumes and continuing grade improvement as mining transitioned into the higher grade benches at the bottom of the Ruth pit. December performance was impacted by planned and unplanned mill maintenance issues. A localized pit wall failure resulted in delaying access to areas of high grade ore at the bottom of the Ruth pit although this was offset somewhat by stockpile drawdown.
In Sudbury, all three operations continued to produce at or above expectations. During the quarter, the Company and Xstrata Nickel signed the Craig Mine Lease Agreement which allows Quadra FNX to utilize the underground infrastructure of the Craig Mine to further develop and mine the Morrison deposit. The Company expects the transition to the Craig Mine to be completed in Q2 2011. Mining of nickel ore for delivery to Xstrata continued at McCreedy West.
During the quarter, the focus at Franke remained on selective mining of lower carbonate ores and the continuing advancement of engineering studies on the nearby China deposit. At Carlota, the Company continues to concentrate on mining oxide ores and utilizing conveyor stacking.
At the Victoria Project, ongoing infill drilling has increased the inferred resource tonnage from the NI 43-101 release of June, 2011 of 12.5 million tonnes grading 2.2% Ni, 2.3% Cu and 8.5 g/t TPMs to 14.5 million tonnes grading 2.5% Ni, 2.5% Cu and 7.6 g/t TPM's. This equates to a 16% increase in tonnes and 32%, 26% and 4% increase in contained Ni, Cu and TPMs, respectively. Borehole geophysical surveys have yielded significant extensions of electromagnetic conductance that are interpreted to be sulphide mineralization down-dip of the known Victoria Zone 4 mineral envelope. Additional conductive domains have been identified several hundreds of meters to the west of Zone 4. Diamond drilling designed to test these conductive domains is planned to continue in 2012.
Stuart Gibbins M.Sc., P.Geo., Manager Mineral Resources for Quadra FNX is the designated Qualified Person for the Victoria Project Inferred Mineral Resource pursuant to NI 43-101 of the Canadian Securities Administrators. Mr. Gibbins has reviewed and approved this news release. Please see the Company's most recent technical report on the Victoria Project, 'Technical Report on the Victoria Project Deposit, Sudbury, Ontario, Canada', by Farrow, Everest, Gibbins and Jolette, June 3, 2011, for the details of sample preparation, analyses, security, and assay quality assurance/quality control. The Mineral Resource was completed by ID2 interpolation using the following cut-off parameters: 9m x 6m x 15m blocks, a C$205 economic cut-off, and Vale mill & smelter recoveries as reported in the public document 'External Audit of Mineral Reserves', for Vale Inco Limited, Ontario Operations, by Golder Associates, effective June 30, 2010. The metal prices used for the Mineral Resource were Cu at $5.00/lb, Ni at $14.50/lb, Pt at $2,910/oz, Pd at $910/oz and Au at $1,820/oz with a Canadian dollar exchange rate of 1.00.
PLAN OF ARRANGEMENT WITH KGHM:
During the quarter Quadra FNX announced that the Company has entered into a definitive agreement (the 'Arrangement') with KGHM Polska Miedz S.A. for the acquisition of all of the outstanding common shares and all of the outstanding warrants of Quadra FNX. This proposal represents a significant premium to the Company's share price prior to the offer and the board of directors of Quadra FNX unanimously recommends that securityholders vote FOR the special resolution approving the Arrangement at the upcoming Special Meeting of securityholders.
The meeting of securityholders is to be held at 10:00 a.m. (Vancouver time) on February 20, 2012, at the Fairmont Pacific Rim in the Emerald Ballroom, located at 1038 Canada Place, Vancouver, BC, Canada.
Meeting materials, including a Notice of Special Meeting and Management Information Circular, have been mailed to securityholders of record as at January 6, 2012 and are available under the Company's profile on SEDAR at www.sedar.com.
ABOUT QUADRA FNX 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, nickel and precious metals from its operating mines: Robinson in Nevada, Carlota in Arizona, Franke in northern Chile, and Levack, which includes the Morrison Deposit, Podolsky and McCreedy West in Sudbury, Ontario. The Company has two key development projects: the Sierra Gorda project, a copper-molybdenum project in Chile, and the Victoria project, a polymetallic project in Sudbury, Ontario. Quadra FNX employs approximately 2,500 people in North and South America.
FORWARD-LOOKING INFORMATION
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 the development of the Morrison deposit and the transition to the Craig Mine, future drilling at the Victoria Project Deposit and the completion of the proposed Arrangement with KGHM. 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' 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 developed based on assumptions about such risks, uncertainties and other factors set out herein, including but not limited to:
-- uncertainties related to the amount of funding required to achieve full
production levels at the Morrison deposit;
-- risks that Quadra FNX's title to its property could be challenged,
including potential challenges from First Nations with respect to the
Sudbury operations;
-- risks associated with Quadra FNX's dependence on transportation
facilities and infrastructure;
-- risk associated with labour relations;
-- risks associated with fluctuations in costs of operating supplies and
other inputs;
-- 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 changes in regulation;
-- increases in off-site transportation and concentrate processing costs;
-- risks related to the stability of mine pit walls;
-- uncertainties related to fluctuations in copper and other metal prices;
-- uncertainties related to the current global financial conditions;
-- uncertainties related to fluctuation in foreign currency exchange rates;
and
-- the fact the Arrangement is subject to conditions, some of which are
outside the control of Quadra FNX.
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. Forward-looking statements are based on assumptions management believes to be reasonable. 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:
Investor Relations and Media Contacts:
Quadra FNX Mining Ltd.
Derek White
EVP, Corporate Development
604-699-3063
Quadra FNX Mining Ltd.
Nawojka Wachowiak
VP, Investor Relations
416-642-9209
Quadra FNX Mining Ltd.
Kristina Howe
Manager, Media & Investor Relations
604-699-3095