Quadra FNX Mining Ltd.
TSX : QUX

Quadra FNX Mining Ltd.

April 19, 2011 07:30 ET

Quadra FNX Announces a Resource for the Victoria Project 3.4 BN lbs(i) of Contained Cu Equivalent

TORONTO, ONTARIO--(Marketwire - April 19, 2011) -Quadra FNX Mining Ltd. ("Quadra FNX" or the "Company") (TSX:QUX) is pleased to announce an NI 43-101 compliant inferred resource totaling 12.5 million tonnes grading 2.3% Cu, 2.2% Ni, and 8.5 g/t total precious metals (TPMs) for its Victoria Project in Sudbury, Ontario.

Key Highlights:

  • Grades are well above those historically found in the Sudbury district and the deposit remains open in all directions
  • Underground development of the project is expected to begin in 2012 with the commencement of shaft sinking
  • An internal scoping study has been completed, estimating first production in 2017

Mr. Paul Blythe, President and CEO of Quadra FNX stated, "The inferred resource estimate for our Victoria project has established this deposit as one of the most significant discoveries made in the Sudbury district in the past 40 years, and a key development project for our Company. With an estimated 3.4 billion pounds* of contained copper equivalent, this discovery is a tremendous achievement by our exploration team and highlights our bench strength as well as our ability to turn this knowledge into value for our shareholders. Along with Sierra Gorda in Chile, Quadra FNX now has two long-life, low-cost development projects in mining friendly jurisdictions that will shape the future of our Company."

Details on the Inferred Resource

The new Victoria Project inferred resource was defined by 31 diamond drill holes, 23 of which intersected the Zone 4 mineralized envelope. The bulk of the tonnage is contributed by the contiguous 12.0 million tonnes from Zone 4, with the balance contributed by the underexplored Zone 2 and the Mini which is ultimately expected to connect to Zone 4. The Victoria deposit remains open in all directions.

Victoria Resource

InferredTonnes
(M)
Tons1
(M)
Cu
(%)
Ni
(%)
Pt
(g/t)
Pd
(g/t)
Au
(g/t)
TPM2
(g/t)
Zone 412.013.32.32.33.24.41.08.7
Zone 20.30.31.40.91.42.20.64.3
Mini0.10.21.20.60.90.50.21.5
Total12.513.72.32.23.24.31.08.5
1short tons
2TPM = Total Precious Metals = Platinum + Palladium + Gold
*Cu Equivalent calculation assumes three-month trailing commodity prices; Cu at US$4.34/lb, Ni at US$12.27/lb, Pt at US$1784oz, Pd at US$778/oz & Au at US$1426/oz

The Mineral Resource estimate was prepared in accordance with the "CIM Definition Standards On Mineral Resources and Mineral Reserves", and the CIM Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines, using geostatistical and/or classical methods, plus economic and mining parameters appropriate to each operation. Definitions and guidelines can be found at www.cim.org.

The Mineral Resource was completed by ID2 interpolation and using the following cut-off parameters: 20 ft x 30 ft x 50 ft blocks, C$115 direct costs, and Clarabelle Mill recoveries to bulk concentrate 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 long term metal prices used for the Mineral Resource were; Cu at US$2.50/lb, Ni at US$7.00/lb, Pt at US$1500/oz, Pd at US$400/oz and Au at US$1,000/oz with a Canadian dollar exchange rate at US$1.00. The NI 43-101 Technical Report is expected to be filed on SEDAR within 45 days of this press release.

Next Steps for the Victoria Project

Exploration: With the inferred resource now complete, the exploration focus at the Victoria property will shift from infill to step out drilling. The Company will focus on testing the up-dip extension of Zone 4 including the area between Zones 4 and the previously discovered Zone 1. The programme will also be evaluating the down-dip potential of the ore body as well as testing other nearby targets.

Conceptual Development Scenario: The Company initiated an internal scoping study in the last quarter of 2010 in order to evaluate development options for the Victoria project. Based on the results of this work the Company's current base case development scenario is to concurrently sink a production shaft and a ventilation shaft that could support initial exploration as well as ultimately a 2,500- 4000 tpd mining operation. This development approach would allow access for definition drilling from the ventilation shaft as well as support production during the underground development stage allowing for the shortest timeline to full production. Due to the cylindrical and steeply dipping shape of Zone 4, the deposit appears amenable to lower cost semi-bulk mining methods such as long-hole stoping. Including underground development, the capital costs are estimated to be approximately three quarters of a billion dollars, over a seven year development period.

Through its fully owned subsidiary, DMC Mining Services, the technical expertise to complete the shaft sinking is available in house allowing development to progress rapidly once pre-development activities are complete.

Pre-development Activities: In 2011 Quadra FNX will continue to advance permitting, First Nations consultations and discussions with other stakeholders in the project area. Continuing discussions are also expected to be held with Vale, with respect to processing terms and the back-in right to the project. The timing of commencement of development will depend on these discussions. The Company has also commenced the engineering studies that will form part of a pre-feasibility study.

Geological Characteristics of Victoria

Victoria is a polymetallic Ni-Cu-Pt-Pd-Au orebody typical of Sudbury 'Frood-style' South Range Breccia Belt deposit (Ames & Farrow, 2007; Farrow & Lightfoot, 2002; Souch & Podolsky, 1969). The classic example of Sudbury South Range Breccia Belt deposits is the historically mined Frood deposit, with smaller examples being the Copper Cliff North 138 Orebody, and the high-TPM Vermilion deposit, located adjacent to the Victoria property.

As illustrated in Figure 3, the currently known up-dip extents of the contiguous Zone 4 inferred resource are hosted within the Ethel Lake segment of the Worthington Quartz Diorite (QD) to a depth of approximately 4,000 ft (1,219 m). Below 4,000 ft (1,219 m) Zone 4 is hosted by intensely thermally recrystallized Sudbury Breccia or Metabreccia (MTBX). The NI 43-101 compliant inferred resource reported here is characterized by vein, semi-massive and massive, pyrrhotite-dominant sulphide mineralization, with varying amounts of pentlandite and chalcopyrite. The sulphides are characterized by a higher base metal tenor in the MTBX-hosted ore, while TPM tenor increases significantly near the current down-dip extents of Zone 4.

Zone 2 is characterized by sulphide veining and semi-massive sulphide on the north side of the Creighton Fault in the footwall of Zone 4 (Figure 2). The Zone 4 Mini is characterized by disseminated, blebby and locally semi-massive sulphide in QD. Zone 1, not included in the mineral resource, is centered at approximately 2,200 feet (671 m) depth. It is characterized by vein and semi-massive sulphide hosted by inclusion-rich QD. The Zone 4 sulphide mineralized system may connect to Zone 1 up-dip, but any potential connection has yet to be fully drill-tested.

Size and Grade distribution at Victoria

The up-dip margin to the Victoria Zone 4 mineral resource reported here is approximately 3,000 feet (914 m) below surface whereas the lower margin of the deposit currently extends to approximately 6,500 feet (1,981 m). The Zone 4 sulphide mineralization is open in all directions.

The top of the resource is characterized by grades and sulphide tenors typical of QD Offset-hosted mineralization on the South Range of the Sudbury Structure (i.e., FNX1198B with 43.5 feet of 1.1% Cu, 1.0% Ni and 1.2 g/t TPM). As illustrated in Figure 4, the base metal and TPM tenors increase with depth to approximately 4,000 feet (1,219 m) where diamond drill hole FNX1186G yielded 623.6 feet of 1.9% Cu, 1.7% Ni and 4.1 g/t TPM.

As the ore transitions with depth (Figure 5) into the MTBX host rock, grades continue to increase to at least 5,500 feet where previously released hole FNX1195C yielded an impressive intersection of 308 ft of 2.1% Cu, 3.1% Ni and 5.1g/t TPM.

At the down-dip extension of the inferred resource TPM tenors increase to spectacular values (Figure 6), as intersected by FNX1200E with 140.9 feet of 5.0% Cu, 3.6% Ni and 61.4 g/t TPM at approximately 6,200 feet (1,981 m) depth. Borehole UTEM-4 surveys has shown that conductance that is likely the result of sulphide mineralization extends below the current resource. The Company expects increased copper and high TPM contents to continue with depth in the sulphide mineralized system.

Conference Call details:

A conference call to discuss the Victoria inferred resource as well as first quarter production has been scheduled for Tuesday, April 19th 2011, at 9.00am ET (6.00am PDT), The North American toll free number for this conference call is 1-800-952-6845 while the international number is 1-416-695-6616. To access the simultaneous webcast, visit Quadra FNX's website at www.quadrafnx.com or www.InvestorCalendar.com. The playback version of the call will be available until April 26th, 2011 at 1-905-694-9451 or North American toll free1-800-408-3053 and using the pass code 5283222.

Qualified Person Statement

Catharine Farrow Ph.D., P. Geo., Executive Vice President – Technical Services and Project Evaluation, and John Everest, M.Sc., P.Geo., Manager – Sudbury Exploration for Quadra FNX are the designated Qualified Persons pursuant to NI 43-101 and are responsible for the verification and quality assurance of the technical content of this news release. Diamond drill core samples are prepared at the SGS Minerals Group preparation facility in Sudbury, Ontario. The resulting pulps are subsequently shipped for assay at the SGS laboratory in Toronto. SGS is accredited by the Standards Council of Canada (SCC) for specific mineral tests listed on the scope of accreditation to the ISO/IEC 17025 standard. Please see the Company's technical report, dated March 31, 2009, (filed on SEDAR on April 27, 2010) for the details of Quadra FNX's sample preparation, analyses, security, and assay quality assurance/quality control for all Sudbury operations and exploration.

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 1,900 people in North and South America.

Forward-Looking Statement

This news release contains certain forward-looking statements. These forward-looking statements are subject to a variety of risks and uncertainties beyond the Company's ability to control or predict, which could cause actual events or results to differ materially from those anticipated in such forward-looking statements. In this news release, statements about the size and grade of any mineralized zone, the potential viability of new deposits and future drilling results are examples of forward-looking statements. There is no guarantee that the initial exploration results will result in a viable mineral deposit. Forward-looking statements speak only as of the date on which they are made. Assumptions about such risks, uncertainties and other factors include, but are not limited to, the factors discussed in the body of this news release.

Forward-looking statements speak only as of the date on which they are made. The Company undertakes no obligation to publicly update any such statement or reflect new information or the occurrence of future events or circumstances, except where required by securities regulations. Accordingly, readers should not place undue reliance on forward-looking statements.

To view the figures associated with this press release, please visit the following link:

http://media3.marketwire.com/docs/690701FIG.pdf

Contact Information

  • 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
    www.quadrafnx.com