Quadra Mining Ltd.

Quadra Mining Ltd.
Centenario Copper Corporation

Centenario Copper Corporation

March 20, 2009 16:23 ET

Quadra Mining Provides Update on Financing for Centenario Copper Corporation Acquisition and Increase to Bought Deal Financing

VANCOUVER, BRITISH COLUMBIA and TORONTO, ONTARIO--(Marketwire - March 20, 2009) -


Quadra Mining Ltd. ("Quadra" or the "Company") (TSX:QUA) and Centenario Copper Corporation ("Centenario") (TSX:CCT) are pleased to announce receipt of a signed committment letter for $US37.5 million from West LB in connection with a syndicated US$50 million project loan facility to finance the development of Centenario's Franke Mine. Key facility details are;

- Hedging requirements of 43 million pounds of copper at a minimum price of US$1.75 over 2009 and 2010

- Facility consists of an amortising US$40 million project finance facility and a US$10 million working capital both with a final maturity date in March 2014

- Quadra as sponsor and guarantor until Completion

- Other terms and conditions customarily associated with project finance facilities including debt service, loan life and reserve life coverage ratios.

Quadra and West LB are in discussions with the existing lending group and other lenders to complete the syndication. In the event the syndication does not complete, West LB will fund their $37.5 million and Quadra would fund the US$12.5 million difference until the syndication is completed. Quadra will continue to work on finalizing loan documentation as outlined in the Arrangement Agreement with Centenario. Completion of the Facility Documents is subject to Quadra and Centenario board approval.

Based on this Quadra is pleased to announce that one of the critical conditions of the Arrangement Agreement has been met.

In addition Quadra is pleased to announce that, due to the positive response from the market, the common share offering announced earlier today has been increased by an additional 2,200,000 common shares. The syndicate of underwriters led by Macquarie Capital Markets Canada Ltd. and including Raymond James Ltd., BMO Capital Markets, GMP Securities L.P. and Paradigm Capital Inc. will now purchase 16,200,000 common shares ("Common Shares") of the Company at a price of CDN$4.65 per Common Share (the "Offering Price") for gross proceeds of CDN$75,330,000. The Company will grant the Underwriters an over-allotment option, to purchase up to an additional 2,430,000 Common Shares (CDN$11,299,500), exercisable at the Offering Price, at any time up to 5:00 pm (Toronto time) on the day which is 30 days following the Closing Date.

Paul Blythe, President and CEO of Quadra says, "At the time that the Arangement Agreement was agreed between Centenario and Quadra, we were contemplating a restructured project debt facility of $75 million. We have not been able, in the present debt market, to arrange a facility of this magnitude, but have, as noted above, a commitment for $37.5 million and are in negotiation for an overall facility of $50 million. The transaction at this debt level is still accretive to Quadra and enables us to continue our corporate growth strategy. The bank financing combined with the CDN$ 75 million bought deal equity financing earlier today enables Quadra to have in place the funding required for the completion and ramp up of the Centenario project, which will add 70 million of cathode copper production to Quadra."

About Quadra:

Quadra Mining Ltd. is a Vancouver based copper mining company. Quadra was launched as a public company in 2004 with a business plan of becoming a mid-tier base metals development and operating company. Quadra's strategic plan is to grow by acquiring assets, accessing and developing attractive projects held by exploration focused companies and seeking merger opportunities within the small to mid-tier sector. The plan was launched with the acquisition and restart of the Robinson Mine ("Robinson") in Nevada in 2004 and has continued with the purchase and construction of its second producing asset, the Carlota Mine ("Carlota") in Arizona. Robinson produced a record 159.7 million pounds of copper and 137,628 ounces of gold in concentrate during 2008. Quadra also owns Sierra Gorda, an advanced and potentially world class development copper project in Region II, Chile.

About Centenario

The Company was founded in 2004 with the goal of becoming a mid-tier copper producer and consolidator, active in regions of low sovereign risk. Centenario currently operates exclusively in Regions II and III of Chile.

Its principal asset, the Franke Property, located in Region II, is currently in construction and is projected to produce 30,000 tonnes of cathode copper per year, starting in early 2009. The Company believes that the contiguous Pelusa Property is highly prospective for developing additional leachable copper resources for processing at the Franke plant. The Pan de Azucar Property, located 45 km. from the Franke Property, is currently being evaluated as a possible nucleus for a second property cluster. The Company continues to evaluate other "in region" clustering opportunities which could reinforce its existing property portfolio.

Forward-Looking Information

This Press Release contains "forward-looking information" within the meaning of applicable securities laws. This forward-looking information includes, but is not limited to, the expectations of Quadra and Centenario with respect to the Debt Financing, the satisfaction of the conditions to complete the Debt Financing, the proposed acquisition of Centenario by Quadra, information regarding the business, operations and financial condition of Centenario, statements with respect to the funds required to bring the Frank Project into positive cash flow and statements with respect to future production at the Franke Project that are based on Centerario's published expectations, estimates, forecasts and projections. Quadra has not independently established this forward-looking information regarding Centenario or assessed the assumptions underlying it. Forward-looking information contained in this Press Release also includes the expectations of Quadra with respect to the proposed acquisition of Centenario by Quadra, and information regarding the business, operations and financial condition of Quadra. Centenario has not independently established this forward-looking information regarding Quadra or assessed the assumptions underlying it.

Forward-looking information contained in this Press Release is subject to known and unknown risks, uncertainties and other factors that are not within the control of Quadra or Centenario and which may cause actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including, but are not limited to:

- Uncertainties related to the satisfaction of the conditions required to complete the Centenario Debt Financing.

- Uncertainties related to whether the shareholders of Centenario will approve the Transaction.

- Uncertainties related to whether all required third-party, court, regulatory and governmental approvals to the Transaction will be obtained, or other conditions to the completion of the Transaction will be satisfied or waived.

- Uncertainties with regards to the anticipated synergies and other benefits resulting from the Transaction.

- Uncertainties related to the accuracy of the reserve and resource estimates at the Franke Project and the geotechnical and density factors and diminishing quantities or grades of reserves.

- Uncertainty that there is sufficient water and acid supply to adequately accommodate the amount of mine production estimated.

- Uncertainties related to expected mining production rates, timing of production and the associated metal recoveries in the current heap leach piles and future ore phases.

- 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).

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

- Uncertainties related to judicial or regulatory proceedings.

- Changes in, and the effects of, the laws, regulations and government policies affecting 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 Chile where the Franke Project is located;

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

- mineral rights ownership in Chile, where the Franke Project is located.

- Changes in general economic conditions, the financial markets and in the demand and market price for 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 and Chilean Peso.

- Environmental issues and liabilities associated with mining including processing and stock piling ore and spent ore.

- Labour strikes, work stoppages, or other interruptions to, or difficulties in, the employment of labour in markets in Chile, or extreme weather conditions, environmental hazards, industrial accidents or other events or occurrences, including third party interference that interrupt the production of minerals in Chile.

This list is not exhaustive of the factors that may affect forward-looking information contained in this Press Release. All forward-looking information contained in this Press Release is subject to the assumptions, disclaimers and risks contained in the public disclosure of Centenario and Quadra available at www.sedar.com, including, but not limited to, the Annual Information Form for the year ended December 31, 2007 for each of Centenario and Quadra. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking information. Each of Centenario and 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.

Contact Information

  • Media and Investor Relations Contact:
    Quadra Mining Ltd.
    Paul Blythe, President, CEO and Director
    (604) 689-8550
    Quadra Mining Ltd.
    Sophie Taylor, Manager, Investor Relations
    (604) 689-8550
    Centenario Copper Corporation
    Richard Colterjohn, President, CEO and Director
    (416) 360-0059