Quadra Mining Ltd.

Quadra Mining Ltd.

October 23, 2006 09:00 ET

Quadra Updates Production Guidance and Hedge Position for Remainder of 2006

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 23, 2006) - (All figures in US$ unless otherwise noted)

Quadra Mining Ltd. ("Quadra" or "Company") (TSX:QUA) announces that the recoveries achieved at the Robinson Mine in Nevada are expected to be significantly below forecast for the balance of 2006 and that as a consequence, copper production for the year is now expected to be approximately 115 million pounds of copper in concentrate. This compares to previous guidance of 125 to 130 million pounds. Gold production is expected to remain unchanged at 55,000 to 60,000 ounces.

The lower than expected recovery is due to the presence of high levels of oxide copper contained within the ore in the supergene zone currently being mined. A portion of this oxide copper is soluble in acid and was recognized in the resource data base with appropriate discounts made to forecast recovery. The new forecast is based on the presence of non-acid soluble oxide which is not recoverable by flotation. Previous planning and forecasting procedures regarded all copper that is not acid soluble as sulphide and therefore amenable to recovery by flotation. The difference was therefore not predicted. Total production in the third quarter was 33.3 million pounds, representing a shortfall of 3.7 million pounds compared to expectations, due to a recovery in September of 56% compared to an expected recovery of 71%. The non-acid soluble oxide material is expected to impact recoveries for the next two months as the operation mines through the remainder of the supergene zone. Once below this zone, recoveries are expected to return to more typical levels.

As a result of this shortfall and product shipment delays encountered at the end of the third quarter that caused a concentrate inventory build up at the mine, approximately 11,000 tonnes of existing hedges will have to be rolled forward into 2007.

In order to be able to continue to draw on the Company's working capital facility which provides liquidity protection between the cost of production and the receipt of sales, Quadra's Board has approved management to hedge up to 16,000 tonnes of the remaining 2006 copper metal production. To date the Company has hedged approximately 3,200 tonnes of Q4 copper production at a weighted average price of $3.36 per pound.

Quadra's President Paul Blythe says, "As a skarn deposit, Robinson is metallurgically complex and while we are disappointed to have encountered more recovery issues in the Veteran pit, the operating team is rapidly developing a greater understanding of the deposit and an expertise in optimizing the mineralogy. We've been building on the knowledge gained through the drill program earlier in the year and actual results and are comfortable that we know what is ahead of us in the next several push backs in the Veteran pit."

The Company will release its third quarter 2006 financials on Wednesday, November 8th. A conference call to discuss the financial results and elaborate further on production results will be held at 8.00 am PST (11.00 am ET) on the same day.

This press release has been reviewed by and received the approval of the Board of Directors.

About Quadra Mining Ltd. (TSX:QUA)

Quadra is a British Columbia corporation based in Vancouver and is a copper producing 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. This forward-looking information includes, among other things, statements with respect to future recovery levels and future production levels. 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" 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, including but not limited to:

- 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.

- The Company sells concentrate material which is subject to provisional payments; uncertainty in the final metal prices used for the computation of final settlement exists such that final settlement could be less than the cost of production plus other liquidity requirements.

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

- Changes in, and the effects of, the laws, regulations and government policies affecting our mining operations.

- 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 and Canadian dollar, concentrate and transportation charges.

- The effects of forward selling instruments to protect against fluctuations in copper, gold, molybdenum and other metal prices and exchange rate movements and the risks of counterparty defaults, and mark to market risk.

- 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).

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

- Labour strikes, work stoppages, or other interruptions to, or difficulties in, the employment of labour in markets in which we operate mines, 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.

- Quadra's reliance on a single producing property.

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.

Contact Information

  • Quadra Mining Ltd.
    Sophie Taylor
    Manager, Investor Relations
    (604) 689-8550
    Quadra Mining Ltd.
    Paul Blythe
    (705) 444-1316
    Website: www.quadramining.com