Quadra Mining Ltd.

Quadra Mining Ltd.

March 11, 2005 08:00 ET

Quadra Mining Ltd. Announces Fourth Quarter Financial Results


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: QUADRA MINING LTD.

TSX SYMBOL: QUA

MARCH 11, 2005 - 08:00 ET

Quadra Mining Ltd. Announces Fourth Quarter Financial
Results

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 11, 2005) - (All
figures are in $ US thousands unless otherwise stated)

Quadra Mining Ltd. (the "Company") (TSX:QUA) is pleased to announce its
fourth quarter and 2004 year end financial results. Quadra incurred a
net loss of $620 ($0.02 per share) for the fourth quarter of 2004 and a
net loss of $2,375 ($0.11 per share) for the twelve months ended
December 31, 2004, compared to a net loss of $241 ($0.12 per share) and
a net loss of $308 ($0.15 per share), respectively, for the same periods
in 2003. A summary of the financial statements together with the
Management Discussion and Analysis are provided below. The complete
financial statements will be available together with the Management
Discussion and Analysis at www.quadramining.com and www.sedar.com.

Quadra's 100% owned Robinson Mine in Nevada began commercial production
on October 1, 2004 following a successful restart that saw the mine in
production two months ahead of schedule. The fourth quarter results are
in line with management's expectations and as the ramp up process
continues, the operational performance continues to improve.

Highlights:

- During the fourth quarter ended December 31, 2004, the mine produced
23.6 million pounds of copper and 10,490 ounces of gold. The copper head
grade was 0.51% while the gold grade was 0.291 g/tonne. The concentrate
grade averaged 24.7%.

- The average daily mill throughput rate was 30,660 tonnes and the plant
operating time was 92.1%. Copper recoveries for the reporting period
were 74.9% with gold recoveries at 39.8%.

- Ore reserve reconciliations for 2004 have shown excellent agreement
with actual production results. Ore reserve tonnes and copper grade are
within 1.2% and 3.3% of the mill actuals, respectively

- Net revenues were $11,932, all of which arose in December 2004. The
Company's realized copper price averaged $1.47 per pound from the sale
of 14,343 dry metric tonnes of concentrate. A concentrate inventory of
approximately 34,000 dry metric tonnes was in transit as of December 31,
2004. Three additional shipments totalling 30,000 dry metric tonnes were
made during January and February 2005.

- Direct on site operating costs arising during the fourth quarter of
2004 were $24,041 while the off site costs were $4,361. Unit mining and
milling costs $1.04 per tonne mined and $3.36 per tonne milled
respectively while unit general and administrative costs were $1.16 per
tonne milled. The cash operating cost per pound produced was $1.16. The
anticipated cash operating costs for 2005 are $1.09 per pound produced
and the expected production is 150 million pounds of copper and 50,000
ounces of gold.



---------------------------------------
Fourth Quarter Year Ended
---------------------------------------
(all figures in US $000s
unless otherwise stated)
2004 2003 2004 2003
FINANCIAL RESULTS

Operating loss $ (221) - $ (221) -

General and Administrative (1,363) (259) (3,906) (322)
Stock-based compensation (293) - (1,870) -
Unrealized loss on derivatives (1,154) - (1,899) -
Foreign exchange (gain) loss 607 - 904 (5)
Break fee - - 2,500 -
Interest and Other income 216 19 530 19
Future income tax recovery 1,587 - 1,587 -
- -
---------------------------------------
Loss for the period $ (620) $ (241) $ (2,375) $ (308)
---------------------------------------
---------------------------------------

---------------------------------------
Basic loss per share $ (0.02) $ (0.12) $ (0.11) $ (0.15)
---------------------------------------
---------------------------------------


FINANCIAL POSITION

Cash available $ 12,269 $ 12,269
Net current assets $ 27,360 $ (287) $ 27,360 $ (287)
Total Assets $ 140,817 $ 248 $ 140,817 $ 248
Total long term liabilities
and Reclamation $ 27,149 $ 27,149
Shareholders equity $ 103,119 $ (255) $ 103,119 $ (255)


The following Management Discussion and Analysis ("MDA") of Quadra
Mining Ltd. ("Quadra" or the "Company") is intended to supplement and
complement the accompanying audited annual financial statements and
notes for the period ended December 31, 2004. All financial information
in this MDA is prepared in accordance with the Canadian Generally
Accepted Accounting Principles.

The following Management Discussion and Analysis ("MD&A") of Quadra
Mining Ltd. ("Quadra" or the "Company") is intended to supplement and
complement the accompanying audited annual financial statements and
notes for the period ended December 31, 2004.

All financial information in this MD&A is prepared in accordance with
the Canadian Generally Accepted Accounting Principles and all dollar
amounts are expressed in thousands of United States dollars unless
otherwise indicated.

DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS

Quadra was formed as a private company on May 15, 2002 under the British
Columbia Company Act, and commenced business on that date. The Company
was private and had no material assets or transactions until 2004 when
the Company sold and issued 1,000,000 Special Warrants at a price of
C$2.00 per Special Warrant for aggregate proceeds of C$2,000. On April
8, 2004 the Company completed an initial public offering ("IPO") and
raised gross proceeds of C$144,936. The Company issued 1,449,360 brokers
warrants as part of the offering. These warrants have an exercise price
of C$6.00 and expire on April 8, 2006. These warrants were valued at
$1,403 using The Black-Scholes method. All of these warrants are
outstanding at December 31, 2004. The Company is in the business of
acquiring mineral properties, with the intention of mine development and
operations.

Quadra is a mine operating and mine development company that acquired
through its subsidiaries one hundred percent of the BHP Billiton
Robinson Mine (the "Mine") in Ely, Nevada for a cash consideration of
$14,763 upon completion of the IPO. In addition to this mine, the
Company secured an option on the Sierra Gorda Project, a group of late
stage contiguous exploration properties near Antofagasta, Chile and is
currently involved in the assessment and evaluation of its several known
deposits. The Company is a reporting issuer in all provinces and
territories of Canada and trades on the Toronto Stock Exchange under the
symbol: QUA.

COMPARABILITY OF RESULTS

During 2003 the Company was private and had no material assets or
transactions and comparisons between the financial results in 2004 or
period to period variations between 2004 and 2003 may not be meaningful
as a result of the significant impact of the Company's IPO and
commencement of operation at the Mine in 2004. Comparative analysis has
been provided where it is considered meaningful.

OVERALL PERFORMANCE

Financial Highlights

- For the twelve months ended December 31, 2004 the Company had a net
loss of $2,375 compared to a net loss of $308 for the twelve months
ended December 31, 2003.

- Net revenues were $11,932 which arose in December 2004. The Company's
realized copper price averaged $1.47 per pound from the sale of 14,343
dry metric tonnes of concentrate. The Company had an operating loss of
$221.

- During 2004 cash used by the Company in operating activities was
$11,081 including the funding of a build up in working capital of
$11,137.

- On April 8, 2004 the Company raised a net $103,879 and used these
proceeds to fund the following matters related to the Mine: the purchase
of $15,707, start up costs of $17,949, security and bonding deposits of
$36,134 and equipment purchases of $7,089. The use of proceeds was in
line with purposes as discussed in the IPO with the exception of
security deposits that were higher than originally anticipated.

Operational Highlights

- The Mine reached commercial production on October 1, and the fourth
quarter ended December 31, 2004, saw the ramp up of production and
resolution of a number of technical start up issues. The Mine produced
23.6 million pounds of copper and 10,490 ounces of gold. The copper head
grade was 0.51% while the gold grade was 0.291 g/tonne. The concentrate
grade averaged 24.7%.

- The average daily mill throughput rate was 30,660 tonnes and the plant
operating time was 92.1%. Copper recoveries for the reporting period
were 74.9% with gold recoveries at 39.8%.

- Ore reserve reconciliations for 2004 have shown excellent agreement
with actual production results. Ore reserve tonnes and copper grade are
within 1.2% and 3.3% of the mill actuals, respectively.

- Direct on site operating costs arising during the fourth quarter of
2004 were $24,041 while the offsite costs were $4,361. Unit mining and
milling costs were $1.04 per tonne mined and $3.36 per tonne milled
respectively while unit general and administrative costs were $1.16 per
tonne milled. The cash operating cost per pound produced was $1.16.

The following table shows the financial performance of the following
business segments: the Mine, the Sierra Gorda project and the corporate
office.



ANNUAL INFORMATION AND OPERATING RESULTS

------------------------------- --------
2002 2003 2004
------------------------------- --------
$ US 000s Total Total Q1 Q2 Q3 Q4 Total

Revenue:
------ ------ ------------------------------- --------
Robinson - - - - - 11,932 11,932
------ ------ ------------------------------- --------
Total - - - - - 11,932 11,932

Costs:
------ ------ ------------------------------- --------
Robinson - - - - - 12,153 12,153
Sierra Gorda - - - 39 55 (199) (105)
Corporate 24 327 743 1,870 1,863 2,366 6,842
------ ------ ------------------------------- --------
Total 24 327 743 1,909 1,918 14,320 18,890

Other income:
------ ------ ------------------------------- --------
Robinson - - - - 91 91
Corporate - 19 2,502 148 165 90 2,905
------ ------ ------------------------------- --------

Earnings
before tax (24) (308) 1,759 (1,761) (1,753) (2,207) (3,962)

Earnings
after tax
------ ------ ------------------------------- --------
Robinson - - - - 15 1,457 1,472
Sierra Gorda - - - (39) (55) 199 105
Corporate (24) (308) 1,672 (1,635) (1,713) (2,276) (3,952)
------ ------ ------------------------------- --------
Total (24) (308) 1,672 (1,674) (1,753) (620) (2,375)

Loss and
diluted loss
per share $ (0.02) (0.15) 0.55 (0.06) (0.06) (0.15) (0.11)

Cash
------ ------ ------------------------------- --------
Robinson - - - 160 453 3,567 3,567
Sierra Gorda - - - 120 143 54 54
Corporate 40 - 2,945 53,493 34,134 8,648 8,648
------ ------ ------------------------------- --------
Total 40 - 2,945 53,773 34,730 12,269 12,269

Total Assets
------ ------ ------------------------------- --------
Robinson - - 73,794 94,900 123,756 123,756
Sierra Gorda - - 2,022 2,483 3,376 3,376
Corporate 44 248 4,201 53,945 39,844 13,685 13,685
------ ------ ------------------------------- --------
Total 44 248 4,201 129,761 137,227 140,817 140,817

Total Liabilities
------ ------ ------------------------------- --------
Robinson - - 24,605 32,340 35,046 35,046
Sierra Gorda - - - 34 69 69
Corporate 5 503 1,234 399 1,408 2,583 2,583
------ ------ ------------------------------- --------
Total 5 503 1,234 25,004 33,782 37,698 37,698

LME $ / Lb.
Average 0.71 0.81 1.24 1.27 1.29 1.40 1.30
Copper price


The Robinson Mine

Quadra acquired its one hundred percent interest in the Robinson Mine on
April 8, 2004 for approximately $14,763 in cash and further acquisition
costs of $944. Quadra was also obliged to replace a reclamation letter
of credit of approximately $17,884.

Management believed that in order to re-start mining operations quickly
it was necessary to appoint a mining contractor and the Mine awarded a
five-year target price contract to Washington Group International
("WGI") to mine approximately 67 million tonnes of ore and waste
annually at the Mine. The mining contract runs through mid-2009 and the
contract value is estimated at US$228 million. WGI executed a final
agreement with the Mine in August 2004 to undertake all aspects of the
mining operation including drilling, blasting, loading, and hauling
approximately 200,000 tonnes per day of ore and waste. WGI quickly
mobilised on site and began mining waste in late May of 2004 and now
employs a work force of approximately 184 workers who operate on a two
12 hour shift per day basis, seven days a week. Quadra's employees,
numbering around 159 at year end, perform and manage all mine design,
engineering and production-oversight activities. WGI also mobilised on
site some key pieces of mobile equipment including one Bucyrus 49RIII
blasthole drills, a LeTourneau L-1800 wheel loader, 9 haul trucks and a
reconditioned 35-yd3 P&H 2300 rope shovel.

In addition to the WGI equipment, and to improve tonnage capacity and
operating costs, the Mine arranged operating leases of the following
mobile equipment: sixteen CAT 793 haulage trucks, a new Bucyrus 495HR
rope shovel equipped with a 56-yd3 bucket and a new 35-yd3 Hitachi
EX5500 hydraulic excavator. Despite very tight market conditions for
large mining equipment, the delivery of all equipment was achieved by
December 31, 2004 with the exception of eight 793 haulage trucks and one
blasthole drill that are expected to be delivered between January and
mid March 2006.

The Mine concentrator began processing ore on August 31, 2004
approximately two months ahead of schedule and reached commercial
production on October 1, 2004. The concentrator has conventional
crushing, grinding and flotation circuits that produce a copper
concentrate which is marketed to domestic and offshore smelters. The
gold is recovered in the copper concentrate and as of January 2005, via
a gravity circuit. During the fourth quarter ended December 31, 2004 the
Mine produced 23.6 million pounds of copper and 10,490 ounces of gold.

Between June and November 2004, the Mine entered sales agreements
regarding the future sales of copper concentrate at fixed terms with
four companies for a two year period ending December 2006. Under these
arrangements the Mine will sell 205,000 dry metric tonnes of copper
concentrate in 2005 and 180,000 metric tonnes of copper concentrate in
2006. Terms are negotiated annually. Additional concentrate will be
produced and sold in the spot market.

The consolidated financial statements of the Company record the costs
associated with the restart period as a deferred start-up cost. During
the restart period from April 8, 2004 to September 30, 2004 the
operation incurred $17,949 of start-up costs that were deferred. These
costs will be amortized on a unit of production basis over the life of
the Mine with a balance of $17,557 as of December 31, 2004.

Net Revenues in 2004 were $11,932 resulting from the sale of 14,343 dry
metric tonnes of copper concentrate sold in December 2004. The operation
experienced a temporary shortage of rail cars during the fourth quarter
which delayed the shipment of concentrate to Quadra's customers and
resulted in a build up to 34,807 dry metric tonnes of concentrate
inventory. During the fourth quarter the operation temporarily utilized
a manifest train service and expects to start hauling concentrate on a
unit train basis in March, 2005.

Operating costs after the start-up period ended September 30, 2004 were
$12,153. The cost of sales included all the cash operating costs of the
Mine site and the freight and storage costs associated with transporting
concentrate to customers. During the year the company incurred an
operating loss of $221.

Increased Mineral Reserves:

Quadra revised and updated the mineral reserves in accordance with
National Instrument 43-101 on June 30th, 2004. Mr. Scott Hardy, P. Eng
(Mining) of Mine Development Associates, Inc. of Reno, Nevada updated
the Mineral Reserve and is a Qualified Person as defined in National
Instrument, 43-101.

The Tripp-Veteran proven and probable reserves are based on a $0.95 per
pound copper and $350 per ounce gold price and a complete review and
update of the parameters used for the design. The reserves in the Ruth
Pit, which will be mined after the Tripp Veteran pit, were not
recalculated. Production from 2004 was subtracted from these reserves to
generate the following reserve statement.



------------------------------------------------------------------------
Proven & Probable Reserves as of December 31, 2004
------------------------------------------------------------------------
Material Above Cutoff
-------------------------------------- Mater-
Contained Metal ial
Resource Cop- Gold --------------- Below Total
Classi- Tonnes per (g/ Copper Gold Cutoff Material Strip
fication (000) (%) tonne) (tonnes) (ounces) (tonnes) (tonnes) Ratio
(000) (000) (000) (000)
------------------------------------------------------------------------
Proven 125,144 0.69% 0.29 863 1,156
Probable 4,282 0.70% 0.23 30 31
------------------------------------------------------------------------
Proven &
Probable 129,426 0.69% 0.29 893 1,187 422,356 551,780 3.3
------------------------------------------------------------------------


The Mineral reserves were estimated by Jack Henris, Technical Services
Superintendent of Robinson Nevada Mining Company under the direction of
Jack Miller, Vice President of Operations an employee of Quadra Mining
Ltd. Mr Miller is a Professional Engineer and is a Qualified Person as
defined by National Instrument 43-101. Reserves are based on a net value
calculation that includes all cash mining costs. Measured and indicated
material with a net value greater than zero are called Proven and
Probable Reserves.

Sierra Gorda:

Following negotiations in 2003, Quadra optioned six contiguous
properties in Region II of Chile, collectively the "Sierra Gorda"
project, in January 2004. Sierra Gorda is located in the Atacama Desert,
140 km northeast of the port city of Antofagasta, and 4 km north of the
town of Sierra Gorda, which lies on the highway and rail line connecting
Antofagasta and Calama. The project covers an area of approximately 19
km2 in a region that has significant copper mines and resources
including BHP Billiton's Spence project 10 km to the northeast,
Antofagasta Holdings PLC's El Tesoro mine approximately 15 km to the
southeast and the Lomas Bayas and Mantos Blancos mines to the southwest.

One of Quadra's properties, the Santa Catalina project, was previously
held by Outokumpu Oyj ("Outokumpu"), which carried out extensive
exploration in the 1990's. Work included 63,000 meters of drilling, a
1,400 meter decline and metallurgical studies. Chevron and Rio Tinto
also carried out exploration on the properties. A number of copper and
mineralized intrusives have been identified.

During the fourth quarter ended December 31, 2004, Quadra completed a
reverse-circulation ("RC") drill program with approximately 10,712
metres drilled in 50 holes on this breccia, porphyry-style
copper-molybdenum property and two new significant zones of copper oxide
mineralization were discovered. The objective of the RC drill campaign
was to extend and explore for additional oxide copper resources outside
of the Catalina deposit defined by the previous owner/operator,
Outokumpu. The holes were stopped when sulphide material was encountered
and will be available for deeper drilling in the future.

During the year ended December 31, 2004 Quadra also surveyed underground
workings, completed a ground magnetics and IP geophysical survey,
conducted a geochemical soil survey over the property and completed the
drill program. All work will provide the basis for an NI43-101 compliant
resource model estimate to be completed by April 2005. Mine and Quarry
Engineering Services Inc. of San Mateo, California ("MQes") completed a
preliminary assessment of the geological models for the Catalina and
Salvadora Cu-Mo deposits. MQes believes the geological models for
Catalina and Salvadora deposits can be improved substantially by
implementing a comprehensive program of data compilation, drill core
re-logging, re-assaying, data verification and geological modeling.

Field work is being supervised by Mr. John (Jack) Currie, a Canadian
geologist with several years experience in Chilean copper exploration,
including working at the nearby Spence deposit for Rio Algom. Brian P.
Fowler, P.Geo is Manager, Exploration for Quadra and is the Qualified
Person for the project.

Quadra spent $1,800 in option payments and $1,400 on direct project
costs on the Sierra Gorda project in 2004. These costs have been
capitalised in mineral properties during the period.

Corporate:

The corporate office activities include: management services, business
development and general administration. Corporate costs during the
twelve months ended December 31, 2004 amounted to $6,842 as compared to
a cost of $327 in 2003. Corporate costs include non cash items of
employee stock options valued at $1,870 and an unrealised loss of $1,899
related to the accounting for forward gold sales. The corporate head
office is located in Vancouver, Canada and opened in mid May of 2004.
During the year the management completed an IPO raising gross proceeds
of C$144,936 and with the incomplete purchase of an interest in the
Highland Valley Copper Partnership ("HVC") received a break fee of
$2,500 in connection with a non-completed purchase of an interest in the
Highland Valley Copper Partnership.

LIQUIDITY AND FINANCIAL RESOURCES

At December 31, 2004 the Company had consolidated working capital of
$26,439 and cash on hand of $12,269 as compared to nominal amounts in
2003. At the year end the Company had no debt and had a current ratio of
3.5:1. The following table shows the sources and uses of cash during the
fourth quarter and for the twelve months ended December 31, 2004 by
business segment.



Sources and uses of cash and cash position for the fourth Quarter and
Year ended Dec. 31 2004

-------------------------------------
Fourth quarter Year ended
-------------------------------------
2004 2003 2004 2003

Cash provided by (used in)
Operating activities
Robinson
-------------------------------------
(12,013) - (10,062) -
-------------------------------------

Sierra Gorda
-------------------------------------
155 - 45 -
-------------------------------------

Corporate
-------------------------------------
(62) 20 (1,064) (25)
-------------------------------------

-------------------------------------
Total Operating activities (11,920) 20 (11,081) (25)
-------------------------------------


Cash provided by (used in)
Investing and financing activities
-------------------------------------
Increase in security deposits
and environmental bond (3,214) - (36,134) -
Acquisition of Robinson Mine - - (15,707) -
Additions to property, plant
and equipment (3,621) (1) (8,691) (1)
Additions to mineral properties (4,068) (26) (20,671) (26)
Shares issued - - 111,549 -
Share issue costs - - (7,670) -
-------------------------------------

Cash provided/used (22,823) (8) 11,595 (52)
Effect of foreign exchange rates
on cash and cash equivalents 379 - 674 9
Cash balance beginning of
the period 34,712 8 - 43
Cash balance end of the period 12,269 - 12,269 -


The Company's year end cash resources will be largely utilised to
finance the costs of the corporate office and exploration activities
relating to the Sierra Gorda project and other exploration and
development projects. The Mine is expected to generate sufficient funds
from operations to finance its operations and capital requirements
during 2005. Subsequent to the year end, the Company is negotiating a
Credit Facility to finance the timing differences between production and
shipment of concentrate inventory and provide additional working capital
liquidity.

The Company's issued and outstanding shares at December 31, 2004 were
27,156,000 and that remains unchanged at the date of this analysis.

For the year ended December 31, 2004, the Company granted 1,737,500
stock options to directors, contractors and employees with an estimated
weighted-average fair value of C$1.53 per stock option for a total of
$1,870 for the year. The fair value of each option is estimated as at
the date of grant using the Black-Scholes option-pricing model with the
following weighted-average assumptions:



Expected volatility 30%
Risk-free interest rate 5%
Expected lives (year) 5
Dividend yield Nil


Option pricing models require the input of highly subjective assumptions
including the expected price volatility. Changes in these assumptions
can materially affect the estimated fair value of options granted.

CONTRACTUAL OBLIGATIONS

During the year ended December 31, 2004 the Company entered a number of
contractual commitments which are summarized in the following table:



Mining Promissory
Equipment Notes
2005 5,783 353
2006 5,742 530
2007 5,661 1,264
2008 5,661 288
2009 5,661 -
---------------------------
28,510 2,435
---------------------------


The operating leases relate to mobile mining equipment. The lease
arrangement is with Caterpillar Financial Services Corporation and Wells
Fargo Equipment Finance Inc. The lease costs are approximately $700 per
month and are recorded as part of mining cost. The term of the leases
ranges from 72 - 84 months and provides Robinson the option to purchase
the equipment at fair market value at the end of the lease.

On August 31, 2004, the Mine entered into an agreement with Mt. Wheeler
Power, Inc. to purchase electrical power until May 31, 2006. Under the
terms of the agreement, the maximum liability is up to $9,000 for the
entire contractual period. The agreement required a security deposit of
$2,000 and the Company has guaranteed, on an unsecured basis, the
payment obligations of the Mine.

Production at the Robinson Mine is subject to a three percent net
smelter return royalty (the "Kennecott Royalty"). The proceeds of the
Kennecott Royalty are required to be contributed to the Robinson
Restoration Trust until a total of $20,000 in principal, interest and
credits has been accumulated after which the royalty will be charged to
expense.

In addition to the Kennecott Royalty, Newmont Mining Corporation of
Canada Limited is entitled to receive royalties from the production of
the Robinson Mine. The royalties payable consist of:

(1) A 10% royalty on net smelter returns on 51% of the production of
gold from the Mine in excess of 60,000 troy ounces per calendar year;

(2) A royalty on 51% of copper production in excess of 130 million
pounds of copper, payable in any calendar year in which the price of
copper exceeds US$1.00 at the end of the year (adjusted for inflation
from 1990, estimated at US$1.50 at December 31, 2004) (the "Trigger
Price"), in an amount equal to US$0.05 per pound plus an incremental
amount equal to 40% of the amount by which the price of copper exceeds
the Trigger Price; and

(3) A 0.225% royalty on net smelter returns of all minerals extracted
from the Mine.

The Bureau of Land Management (BLM) requires that companies recalculate
the amount of the Environmental Bond at least every three years and
submit the recalculation to the BLM for approval. Initial estimates,
which have not been approved by the BLM, indicate that the amount of the
bond may have to increase by some $1,500 to $3,000 and this amount is
expected to be funded by operating cash flow at the Mine.

On April 15, 2004, Quadra entered into six agreements (the "Option
Agreements") with six separate vendors under which Quadra could elect to
purchase six contiguous mining properties in Chile. The Options
Agreements have differing terms, conditions and adjustments. The total
purchase price of all six properties is $24,975. The payment schedules
are structured so that there are initial payments, further payments upon
entering into the Option Agreements and annual and semi-annual payments
thereafter until the full purchase price is paid. The initial amount
paid upon entering into the Option Agreements was $1,675, with an
additional $994 payable to the vendors during the first two years of the
Option Agreements. Quadra would provide the additional funding to meet
these obligations either from the issue of equity or from internal cash
flow.

SUBSEQUENT EVENTS

The Company and some of its subsidiaries are negotiating a working
capital facility and hedge line of credit arrangement with Macquarie
Bank Ltd. (the "Lender"). As part of these arrangements the Mine is
expecting to provide a fixed and floating charge over the assets of the
Mine, and a pledge of the shares of Robinson Nevada Mining Company.

On March 3, 2005, the Company, Inca Pacific Resources Inc. ("Inca") and
Minera Ancash Cobre SA ("Ancash") entered into an Investment and
Operating Agreement. Under the terms of the agreement, the Company paid
$1,833 and issued 183,264 shares and two special warrants each of which
can be exercised for the greater of 183,264 Company shares or the
Company shares with a value of $1,000 to Inca in exchange for 1 million
Inca shares and a vested 50.1% interest in the Magistral copper -
molybdenum project in Central Peru by completing a pre-feasibility study
by February 28, 2006 and a "bankable" feasibility study by November 30,
2006. On the completion of the arrangement of project financing by June
30, 2007, the Company will earn a further 14.9% interest in the project
and Inca will have a one-time right to put their remaining 35% interest
to the Company based on a net present value formula. In accordance with
the underlying agreement with Minera Peru, the project must be in
production by June 30, 2009 and each party shall be responsible for its
share of the project development costs.

TRANSACTIONS WITH RELATED PARTIES

Of the Directors of the Company, one is a Partner of an affiliate of
Blake, Cassels & Graydon LLP and one is a partner of Chancellor Partners
Management Consultants Inc. During the year ended December 31, 2004 the
Company paid legal fees of $733 which includes $7 in payables and
recruiting and human resources consulting fees of $211 respectively to
those entities (2003: nil).

FINANCIAL INSTRUMENTS - HEDGING

Quadra's hedging strategy is to enter a hedge when it is required to
preserve financial liquidity and, when appropriate, to offsetting the
commodity price risk volatility. In circumstances when the company uses
financial leverage for financing expansion or material business
transaction hedging may be required. Management is concerned with the
significant backwardation curve often associated with future copper
prices contracts and considers shorter term hedging arrangements when
possible. At December 31, 2004 no copper production was hedged.

On July 22, 2004 the Company bought gold forward sales contracts for a
total of 60,000 oz. in conjunction with a potential commodity linked
financing of a material transaction. This transaction did not proceed
and management has been rolling over the position on a monthly basis. As
at December 31, 2004, the weighted-average price on the forward
contracts was $404/oz. The unrealized loss resulting from the
mark-to-market of the contracts was $1,899 based on the gold price of
$435.60/oz.

CRITICAL ACCOUNTING ESTIMATES

Revenue recognition and inventory valuation

Metal concentrate production is subject to long-term contracts for sale,
and revenue is recognized when title passes and collectibility is
reasonably assured. Final metal prices for determining revenue are
generally three months after the point of recognition and price change
subsequent to December 31, 2004 could have a material impact on final
settlement. In addition, net realizable value for the purposes of
inventory valuation is also based on estimated metal price and future
change could have an impact of the inventory valuation.

Economic life

Management's estimate of the economic life of the Mine is ten years
based on the updated resource statement provided in accordance with
National Instrument 43-101. Based on Management's view of future metal
prices the carrying value of the assets was not impaired at year end.

Asset retirement obligations, reclamation and mine closure

The Company has adopted the new recommendations of The Canadian
Institute of Chartered Accountants for the accounting for asset
retirement obligations. The recommendation requires that the fair value
of a liability for an asset retirement obligation be recognized in the
period in which it is incurred or acquired. Also, when a liability is
initially recorded, a corresponding increase to the carrying amount of
the related asset is recorded.

Due to uncertainties concerning environmental remediation, the ultimate
cost to the Company of future site restoration could differ from the
amounts provided. The estimate of the total liability of future site
restoration costs is subject to change based on amendments to laws and
regulations and as new information concerning the Company's operations
becomes available.

The Company is not able to determine the impact on its financial
position, if any, of environmental laws and regulations that may be
enacted in the future.

Net future income taxes and resource tax asset and liabilities

The Company has recognized $1,587 as future tax asset. Management
estimates that, using long term copper price in line with management
life of mine plan estimates, that future taxable income will be
sufficient to utilize estimated tax assets.

CHANGES IN REPORTING CURRENCY

During the quarter ended June 30, 2004, the Company changed its
reporting currency from the Canadian dollar to the United States dollar.
This was done because management now considers the United States dollar
to be the functional currency of the Company as the Company's primary
assets are based in the United States, the Company's products will be
sold in United States dollars and the majority of the Company's
transactions will be denominated in the United States dollar.

FUTURE PROSPECTS

Outlook:

The copper price has historically been both cyclical and volatile
trading with a range of $0.60 - $1.60 per pound with an 8 - 10 year
cycle through the 1980's and 1990's. The copper industry is expected to
remain strong over the near term as current and future demand growth
exceeds supply. Smelting and freight costs have increased significantly
over the last year. They are not expected to decrease during the
duration of the current commodities boom.

Mining:

Robinson Mine

The anticipated cash operating costs for 2005 are $1.09 per pound
produced and the expected production is 150 million lbs of copper and
50,000 ounces of gold. The expected strip ratio for 2005 is 4.4:1. The
anticipated life of mine costs remain unchanged at $0.79 per pound of
copper produced.

The reserves are currently expected to sustain production for the next
10 years and will vary from year to year based upon metal prices and as
ore is mined out or added as a result of definition drilling and
exploration work.

Mineral reserves in the current mine plan total 129,426 million tonnes
grading 0.69% copper and 0.29 grams per tonne gold with over 97% of the
mineral reserves in the proven category. The reserves in the Ruth Pit
were not recalculated under the revised mine plan but as the reserve
increases substantially based on copper prices above $0.95 per pound,
Quadra is planning to review and update the design parameters of the pit
shell.

There is significant potential for additional reserves and leachable
copper and gold resources at the Mine. This potential is being evaluated.

A study has been initiated to investigate the economic feasibility of
adding a molybdenum flotation circuit to the plant and, if positive, the
Mine could be producing molybdenum by year end, 2005. Initial estimates
indicate capital is in the range of $10,000

Initiatives are being implemented to attain optimal mill performance and
optimize throughput, recovery and concentrate grades. In these
activities Quadra will manage its mining operations with the emphasis on
reducing operating costs by containing energy costs, controlling
consumable costs, establishing material and transport contracts and
initiating unit train rails shipment to lower transportation costs of
the copper concentrate.

Exploration and Development:

Sierra Gorda

Quadra is planning to spend a minimum of $5,000 during 2005 advancing
the Sierra Gorda project by completing a work program to complete the
re-logging the entire Sierra Gorda drill core inventory, undertake a
substantial drilling program, perform metallurgical test work and other
scoping studies.. The Company expects to complete a NI 43-101 compliant
resource estimate by the end of April, 2005.

Magistral

Previously disclosed Measured and Indicated Resources at the Magistral
project were 76 Million Tonnes at 0.76% Cu and 0.055% Mo and Inferred
Resources were 39 Million Tonnes at 0.71% Cu and 0.039% Mo using a 0.5%
Cu cut off.

Quadra can earn a 50.1% interest in Ancash Cobre S.A., the 100% owner of
the Magistral project, by completing a bankable feasibility study for a
minimum 15,000 tonnes per day operation by November 30, 2006. Quadra can
increase its ownership from 50.1% to 65% by arranging project financing
on or before 30th June 2007. Once Quadra has met its obligations with
respect to the feasibility study and financing, and has reached 65%
ownership, each party will be responsible for its share of the project
development costs.

Quadra expects to expend $5,000 during 2005 on infill drilling,
metallurgical testing, geological modeling, resource estimation,
environmental studies, community relations and development of
infrastructure strategies.

The above Management and Discussion analysis may contain some
forward-looking statements that are subject to risks and uncertainties
that may cause actual results to differ from those expressed or implied
by such statements. Statements relating to revenues, growth profits,
operating expenses depend on future market conditions and risks, and are
considered forward-looking thereby providing no guarantee that they will
be realized. The corporation disclaims any intention or obligation to
update or revise forward looking information, whether as a result of new
information, future events or otherwise.

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 may contain some forward-looking statements that are
subject to risks and uncertainties that may cause actual results to
differ from those expressed or implied by such statements. Statements
relating to revenues, growth, profits and operating expenses depend on
future market conditions and risks, and are considered forward-looking
thereby providing no guarantee that they will be realized.

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