Quadra FNX Mining Ltd.
TSX : QUX

Quadra FNX Mining Ltd.

June 19, 2010 18:34 ET

Quadra FNX Provides Update on Production

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 19, 2010) - Quadra FNX Mining Ltd. ("Quadra FNX" or "the Company") (TSX:QUX) announces that it has undertaken a mid-year operating review and as a result has revised production guidance for 2010.

Copper production for the combined operations is now expected to be 265 million pounds for the year instead of our previous estimate of 300 million pounds. Gold and precious metal production guidance remains unchanged at 155,000 ounces.

Franke

Annual copper production at Franke is expected to be 20 million pounds below previously stated guidance. The reasons for this decrease in guidance are:

  • The ore to leach pad stacker system throughput was previously estimated at approximately 10,500tpd, but has been and is now expected to continue to perform at 8,500tpd until December - a shortfall of 20%
  • Leach recoveries were lower than expected as a result of sub-optimal leach parameters

The Company ordered the replacement stacking equipment with greater throughput capacity. With the benefits of this new equipment, the volume of material placed on the leach pads is expected to be at or above feasibility levels by the first half of 2011. Commissioning of this equipment is scheduled for December 2010.

As previously disclosed, the Company has been adjusting the leach operating parameters, including reducing the lift height in the heap leach pad, increasing solution application rates and blending to control the carbonate content. Based on an interpretation of historical pad performance and proposed changes, recoveries are expected to improve into the 80% range. Additional pad area to offset the impact of the lower lift height is under construction.

Carlota

The Company has evaluated the impact of the previously announced storm event that occurred in January, and the subsequent unusually wet winter and spring weather, which resulted in water levels well above normal for Arizona, and has now concluded that it will not be possible to recover the production losses that resulted from these events. Current guidance has been revised downwards by approximately 15 million pounds as a result of the following:

  • The impact of storm water and greater than normal rainfall on the grade of the pregnant-leach-solution ("PLS")
  • A reduction in the volume and grade of material placed on the pad resulting from being unable to access the Cactus pit due to the amount of water in the pit

As a result of the recently improved weather conditions at Carlota, PLS grades are expected to return to normal levels. Mine access to the Cactus pit was regained at the end of March and as mining progresses, it is expected that ore grades and volumes will improve in the second half of the year.

Sudbury and Robinson Operations

Production guidance from the Sudbury and Robinson assets remains unchanged at approximately 48 million pounds and approximately 135 million pounds of copper, respectively. Gold and other precious metal guidance also remains unchanged at 155,000oz (80,000oz of Au from Robinson mine and 75,000oz of total precious metals from the Sudbury operations). The Robinson operation periodically deals with historical workings. Recent operations have shown some of these workings to be more extensive than indicated in the block model. Robinson is currently evaluating the implications of this situation, if any.

Paul Blythe, President & CEO comments; "We have been working to mitigate the rainfall driven issues at Carlota and the equipment availability and recovery issues at Franke, but have now had to conclude that, while we have strategies and upgrades in progress or in place, we will not be able to make up the shortfall this year and as a consequence have reduced our guidance accordingly.

Despite best efforts by the operating team at Franke, we have not been able to get the availability we need from the stacking equipment. The stacking equipment that was originally installed is simply not up to the task and will be replaced by a more robust system, now being manufactured. Preliminary recovery estimates from recently stacked material, using our revised strategies, are encouraging, although we will not have a definitive position on recovery until leaching of this material is complete later in the year.

At Carlota water volumes are still well above levels for normal operation. The unusually wet winter after the initial storm event did not provide the levels of evaporation expected until April. While we could access the pit in March, we are still behind plan in terms of ore grade to the pad. We have every expectation that subject to weather we will be back to normal pad loading in the third quarter and will be placing higher grade material on the pad, with much of the benefit being realized next year. "

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: the Robinson mine in Nevada, the Carlota mine Arizona, Franke mine in northern Chile, and the McCreedy West, Levack and Podolsky mines in Sudbury, Ontario. The Company possesses several advanced development projects, including the Sierra Gorda copper-molybdenum project in Chile, the Morrison Deposit in Sudbury, and the Malmbjerg molybdenum development project in Greenland. 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 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'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 the Franke Mine and the leaching rate achieved at the Franke Mine;
  • uncertainties related to the impact of the recent storm event at the Carlota Mine and uncertainty relating to the leaching rate achieved at the Carlota Mine;
  • risks associated with the mineralogy at all Mines and projects including in particular the complex mineralogy at the 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 the Franke Mine;
  • uncertainties related to the construction quality and structural design at the Franke Mine; and
  • risks associated with costs of operating supplies, including sulphuric acid.

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.

Contact Information

  • Quadra FNX Mining Ltd.
    Media and Investor Relations Contact
    Derek White
    Executive Vice President, Corporate Development
    (604) 807 -7555
    or
    Quadra FNX Mining Ltd.
    Media and Investor Relations Contact
    David Constable
    Vice President, Investor Relations
    (416) 628-5929