Quadra Mining Ltd.
TSX : QUA

Quadra Mining Ltd.

May 12, 2008 09:00 ET

Quadra Mining Announces an Updated NI 43-101 Resource Estimate, the Acquisition of Additional Water Rights and the Buyout of the Land Options for Its Sierra Gorda Project in Chile

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 12, 2008) - Quadra Mining Ltd. (TSX:QUA) ("Company" or "Quadra") is pleased to announce the completion of an updated NI 43-101 compliant mineral resource estimate for its 100% owned Sierra Gorda project in Chile as well as the purchase of significant additional water rights to meet future production needs.

The Indicated mineral resource estimate contains 10.6 billion pounds of copper and 474 million pounds of molybdenum while the Inferred mineral resource estimate contains 5.5 billion pounds of copper and 211 million pounds of molybdenum (see table for details). The Sierra Gorda copper and molybdenum resource estimate has increased significantly in size and level of confidence from the previous resource estimate (see Press Release: July 6th, 2005). Recent drilling has also shown significant gold grades over much of the area, however gold assay data is lacking or is selective over much of the historical drilling, so gold was not included in the current resource estimate.

The Company acquired the permitted water rights to 319 litres per second (lps) of water capacity located in Pampa Llalqui, Calama, in Region II, northern Chile, in exchange for $10 million in cash and 1,231,916 common shares of Quadra. This acquisition, in addition to the 129 lps purchased last year (see Press Release: September 10th, 2007), totals 448 lps and represents a significant portion of the estimated overall water requirements for the project and its potential development.

The Company has also elected to make accelerated payments totalling $22.5 million to exercise eight of the Sierra Gorda option agreements. The Company therefore now has a 100% ownership interest in the project.

As a result of the exploration results and the associated substantial resource, the Board of Directors has approved a $37 million development program. The program will include infill definition drilling aimed at moving additional resources into the measured and indicated categories, together with the metallurgical, geotechnical, environmental, infrastructure and engineering studies required for the pre-feasibility and feasibility stages of the project.

Paul Blythe, President & CEO, comments, "This updated resource estimate for Sierra Gorda confirms the significance of the deposit as a major pipeline project for Quadra and the results support our plans for moving forward expeditiously. The continuity of mineralization and the presence of potential by-product molybdenum and gold are both very encouraging. As we now intend to move to the next stage, we have decided that it is appropriate to complete the acquisition of the principal mineral properties making up the Sierra Gorda project by exercising the option agreements.

Securing water rights has been a focus since we began work on the project. The acquisition of this additional water is a big step forward in the development of the project. The anticipated scope of the Sierra Gorda project could comprise both an oxide heap leach operation as well as a large primary sulphide production facility and require in the range of 600 to 700 lps based on a conceptual 120,000 tonnes per day mill capacity."

Mr. Blythe continues, "We believe that we have the makings of a very substantial long life project at Sierra Gorda, and one that would be pivotal to the growth and future of the Company. The Board has approved a development budget of $37 million through to March 2009, representing a significant investment of capital. The next step is to produce a pre-feasibility study and to begin the preparation of the environmental impact statement. Part of this exercise will be to develop a realistic timeline through to production."

The Sierra Gorda copper and molybdenum resource estimate is given below and a map of the resource area is attached. While mineral resources do not have demonstrated economic viability, future economic studies will determine what percentage of this material can be placed into the mineable category.



Estimated Sulphide and Supergene Resource
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Total Total
Cutoff Grade Contained Cu Contained
Grade Tonnes CuEq Grade Cu lbs Grade Mo Mo lbs
%CuEq(1) (000's) (2)% Cu% (Tonnes) (000's) Mo% (Tonnes) (000's)
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Indicated Resource - Sulphide Material
---------------------------------------------------------------------------
0.30 923,173 0.56 0.44 4,101,000 9,040,600 0.023 215,000 474,210
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0.40 715,539 0.62 0.48 3,463,000 7,635,100 0.027 196,000 432,230
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0.50 437,969 0.73 0.54 2,365,000 5,214,000 0.038 167.000 367,880
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0.60 254, 474 0.87 0.59 1,490,000 3,284,800 0.056 142,000 313,610
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0.70 148,222 1.02 0.62 912,000 2,011,000 0.081 121,000 265,670
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Inferred Resource - Sulphide Material
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0.30 590,269 0.46 0.38 2,253,000 4,966,700 0.016 96,000 210,870
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0.40 333,977 0.55 0.44 1,457,000 3,212,700 0.023 76,000 167,190
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0.50 147,023 0.68 0.50 739,000 1,630,000 0.036 53,000 116,410
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0.60 75,181 0.82 0.56 424,000 935,400 0.051 38,000 84,090
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0.70 41,400 0.96 0.61 254,000 560,400 0.069 29,000 63,310
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Estimated Oxide Resource
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Cutoff Grade Tonnes Grade Total Contained Cu Cu lbs
% Cu (000's) Cu% (Tonnes) (000's)
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Indicated Resource - Oxide Material
---------------------------------------------------------------------------
0.20 206,011 0.34 705,000 1,554,900
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0.30 99,209 0.45 445,000 981,600
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0.40 47,817 0.56 269,000 592,600
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0.50 24,648 0.67 166,000 366,400
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Inferred Resource - Oxide Material
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0.20 83,298 0.30 249,000 549,500
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0.30 31,770 0.39 125,000 275,000
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0.40 10,414 0.50 52,000 114,500
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0.50 3,570 0.61 22,000 48,000
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(1) The minimum cutoff grades were determined using the operating costs for
similar operations in Chile.

(2) Copper equivalent calculation is based on long term average copper and
molybdenum metal prices to arrive at a ratio of 5 to 1. Copper
equivalent calculations reflect gross metal content and have not been
adjusted for metallurgical recoveries or relative processing and
smelting costs.


The supergene copper is reported with the sulphide, although it could be processed with the oxide or hypogene sulphide.

The updated technical report incorporating the new resource estimate will be filed with the securities regulatory authorities and will be available on SEDAR and from the Company's website within 45 days in accordance with security regulations.

The above resource table does not include all of the most recent drilling results which are designed to confirm the continuity of mineralization through much of the resource area. A summary of these additional holes with Cu results over 0.20% are shown in the following table.



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Hole # Total Depth From To Interval Cu% Mo% Au gpt
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QSGRC5-52 350-762 604 700 96 0.40 0.490 0.07
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QSGRC5-62 176-764 234 248 14 0.40 less NA
than
0.005
---------------------------------------------------------------------------
QSG 06-294 200-1204 1112 1204 92 0.64 0.003 NA
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QSG07-377 0-1035 44 74 30 0.32 - -
and 162 188 26 0.30 - -
and 444 904 460 0.40 0.046 0.08
Including 662 830 168 0.50 0.029 0.09
---------------------------------------------------------------------------
QSG07-384 0-224 6 224 218 0.24 - -
---------------------------------------------------------------------------
QSG07-385 0-212 6 86 80 0.24 - -
and 112 212 100 0.33 - -
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QSG07-386 0-222 18 222 204 0.30 - -
---------------------------------------------------------------------------
QSG07-389 0-246 6 86 80 0.48 0.027 -
---------------------------------------------------------------------------
and 118 232 114 0.27 0.065 -
---------------------------------------------------------------------------
QSG07-392 0-222 66 134 68 0.28 - -
---------------------------------------------------------------------------
QSG07-394 0-240 6 44 38 0.28 - -
---------------------------------------------------------------------------
QSG08-401 0-166 26 146 120 0.24 - -
---------------------------------------------------------------------------
QSG08-406 0-234 6 16 10 0.27 - -
---------------------------------------------------------------------------
QSG08-413 0-212 12 36 24 0.22 - -
---------------------------------------------------------------------------
and 70 96 26 0.23 - -
---------------------------------------------------------------------------
QSG08-416 0-910 6 52 46 0.43 - -
196 370 174 NA NA NA
and 370 588 218 0.87 0.087 0.17
---------------------------------------------------------------------------
and 588 910 322 0.3 0.026 0.06
---------------------------------------------------------------------------
QSG08-417 0-224 52 148 96 0.32 - -
---------------------------------------------------------------------------
and 210 224 14 0.28 - -
---------------------------------------------------------------------------
QSG08-419 0-232 12 32 20 0.37 - -
---------------------------------------------------------------------------
QSG08-420 0-200 0 200 200 less - -
than
0.20
---------------------------------------------------------------------------
QSG08-421 0-162 16 26 10 0.26 - -
---------------------------------------------------------------------------
and 36 46 10 0.32 - -
---------------------------------------------------------------------------
QSG08-427 0-176 118 140 22 0.48 - -
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Background:

Quadra began its Sierra Gorda development program in April 2004. Since that time the Company has aggressively explored the entire claim block re-affirming the presence of significant near surface oxide resources but more importantly identifying significant sulphide potential below these oxide resources. Most recent exploration has focussed on two major sulphide zones containing copper, molybdenum and locally gold.

The resource estimate and associated work was prepared in compliance with requirements set out in National Instrument 43-101 by Steven Ristorcelli, P.Geo., Mine Development Associates ("MDA") of Reno, Nevada, assisted by Peter Ronning, P.Eng., New Caledonian Geological Consulting (NCG) with the QA/QC work reviewed by Mr. Gary Lustig, P.Geo. Preliminary metallurgical data was reviewed by Mr. Jerry Hanks, P.Eng.

The Sierra Gorda project exploration work was conducted under the direction of Pat Fahey, the Qualified Person for the project and Vice President, Exploration for Quadra Mining Ltd. Mr. Fahey has reviewed and approved the content of this press release.

About Quadra Mining Ltd. (TSX:QUA)

Quadra is a British Columbia corporation based in Vancouver and is a mining company whose principal asset is the Robinson Mine in Nevada. The Company has a goal of becoming a mid-tier base metals development and operating company with interests in a number of advanced exploration, development and producing properties.

This Press Release contains "forward-looking information" that is based on Quadra's expectations, estimates and projections as of the dates as of which those statements were made. 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, including but not limited to: (i) Uncertainties related to the accuracy of our reserve and resource estimates and our estimates of future production and future cash and total costs of production and the geotechnical or hydrogeological nature of ore deposits, diminishing quantities or grades of reserves and variable metallurgical performance of these reserves.

- Uncertainties related to expected production rates, timing of production and the cash and total costs of production and milling.

- Uncertainties relating to copper, gold, molybdenum and other mineral prices, which are beyond the Company's control.

- Operating and technical difficulties in connection with mining development or production activities.

- Uncertainties and costs related to Quadra's exploration and development activities, such as those associated with determining whether copper, gold, molybdenum or other mineral reserves exist on a property.

- Uncertainties related to feasibility studies and other studies that provide estimates of expected or anticipated costs, expenditures and economic returns from a mining project.

- Uncertainties relating to the availability of adequate water resources and power for mining and milling operations and uncertainties related to whether the Company will be able to pump water in the expected quantities from the properties on which it holds water rights.

- Uncertainties related to the ability to obtain and retain necessary licences, permits, electricity, surface rights, water rights and title for development projects and project delays due to third party opposition.

- Uncertainties related to judicial or regulatory proceedings, including whether the permits required for development and operating activities will be obtained and whether existing permits will be challenged.

- Uncertainties related to existing litigation, and potential future litigation, with respect to the Company's ownership of its mineral properties.

- Changes in, and the effects of, the laws, regulations and government policies affecting our mining operations, particularly laws, regulations and policies relating to:

-- mine expansions, environmental protection and associated compliance costs arising from exploration, mine development, mine operations, reclamation and mine closures;

-- expected effective future tax rates in jurisdictions in which our operations are located;

-- the protection of the health and safety of mine workers; and

-- mineral rights ownership in Chile and other countries where our mineral deposits are located.

- Changes in general economic conditions, the financial markets and in the demand and market price for copper, gold, molybdenum and other minerals and commodities, such as diesel fuel, petroleum, steel, concrete, electricity and other forms of energy, mining equipment, operating supplies, and fluctuations in exchange rates, particularly with respect to the value of the U.S. dollar, Chilean Peso and Canadian dollar, concentrate and transportation charges.

- Uncertainties in obtaining additional financing that may result in delay or postponement of development projects.

- Unusual or unexpected formations, seismic activity, cave-ins, flooding, pressures, pit wall failures and other similar incidents (and the risk of inadequate insurance or inability to obtain insurance to cover these risks).

- Labour strikes, work stoppages, or other interruptions to, or difficulties in, the employment of labour in markets in which we operate, or extreme weather conditions, environmental hazards, industrial accidents or other events or occurrences, including third party interference that interrupt the production of minerals in our mines or development of our mineral properties.

A discussion of these and other factors that may affect Quadra's actual results, performance, achievements or financial position is contained in the filings by Quadra with the Canadian provincial securities regulatory authorities, including Quadra's AIF. This list is not exhaustive of the factors that may affect our forward-looking information. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking information. Quadra 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.

To view the Sierra Gorda Project map please click on the following link: http://media3.marketwire.com/docs/quadramap512.pdf

Contact Information

  • Media and Investor Relations Contact:
    Quadra Mining Ltd.
    Sophie Taylor
    Manager, Investor Relations
    (604) 689-8550
    Website: www.quadramining.com