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VANCOUVER, BRITISH COLUMBIA–(Marketwire – Oct. 14, 2011) – Quadra FNX Mining Ltd. (“Quadra FNX” or the “Company”) (TSX:QUX) announces that consolidated payable production for the three months ended September 30 increased 9% compared to Q2 2011 and 30% compared to Q1 2011 and totaled 60 million pounds of copper, 26 thousand ounces of total precious metals (“TPMs”) and 3 million pounds of nickel.
Paul Blythe, President & CEO comments; “This is our strongest quarter since 2009, driven by Robinson and continuing strong performance from our Sudbury operations. We are seeing continuing and significant improvements in production at Robinson. The various measures that we have taken are delivering increased flexibility and productivity. The result is that in September we broke both the daily mining record and monthly milling record. However, we did experience slope stability issues that required remediation and adjustments to the mine plan that have affected our ability to reach a portion of the higher grade material at the bottom of the pit.
“With approximately US$1.0 billion dollars in cash we remain comfortably positioned to weather the current downturn in the copper price. We will continue to develop Sierra Gorda and Victoria and to increase operating flexibility, so that we are well positioned to take advantage of the higher copper prices that we believe will inevitably return.”
| Production | Sales | ||||||
| Q1 2011 | Q2 2011 | Q3 2011 | YTD 2011 | Q3 2011 | |||
| Copper (Million lbs) | |||||||
| Robinson (1) | 20 | 21 | 27 | 68 | 28 | ||
| Carlota (2) | 4 | 6 | 7 | 17 | 7 | ||
| Franke (2) | 7 | 9 | 9 | 25 | 10 | ||
| Morrison (3) | 9 | 10 | 10 | 29 | 10 | ||
| Podolsky (3) | 5 | 7 | 6 | 18 | 6 | ||
| McCreedy West (3) | 1 | 2 | 1 | 4 | 1 | ||
| Total | 46 | 55 | 60 | 161 | 62 | ||
| Copper price at beginning of period ($/lb)(4) | $ | 4.22 | |||||
| Copper price at end of period ($/lb) (4) | $ | 3.24 | |||||
| TPM (kozs) | |||||||
| Robinson (1) | 6 | 7 | 9 | 22 | 9 | ||
| Morrison (3) | 6 | 8 | 8 | 22 | 8 | ||
| Podolsky (3) | 7 | 6 | 7 | 20 | 7 | ||
| McCreedy West (3) | 7 | 6 | 2 | 15 | 2 | ||
| Total | 26 | 27 | 26 | 79 | 26 | ||
| Total Nickel (Million lbs) (3) | 2 | 2 | 3 | 7 | 3 | ||
| Total Copper Equivalent (Million lbs)(5) | 62 | 73 | 78 | 213 | |||
| 1. | Payable Cu and Au produced in concentrate |
| 2. | Payable Cu produced in cathode |
| 3. | Shipped payable metal |
| 4. | The average price used to value provisionally priced copper |
| 5. | Cu Equivalent amo unts are based on previously announced LOM commodity prices: Cu at $2.50/lb, Ni at $7/lb, Pt at $1500/oz, Pd at US$400/oz, Au at $1000/oz and Mo at $12/lb and excludes the impact of the Franco Nevada Agreement |
| Note: All amounts are in US dollars. | |
THIRD QUARTER OVERVIEW:
Production from the Robinson operation was impacted by localized slope stability issues but continued to improve as mining transitioned into the lower benches of the Ruth pit and begun to access higher grade ores. The five trucks that were moved from Carlota to Robinson are now fully operational. In September the mine achieved a one day record ex-pit mining rate of 257 thousand tonnes (284 thousand tons) and a record monthly average milling rate of approximately 44,000 tonnes (48,500 tons) per day.
In Sudbury, copper production at all three operations continues to be at or above expectations. The Company delivered approximately 55,000 tonnes of contact nickel ore from McCreedy West to Xstrata, which was milled in August as a trial lot. Discussions with Xstrata for the treatment of additional ore are ongoing. The Company continues to mine this material and the 2012 business plan includes the mining and shipment of McCreedy West nickel ores, providing nickel prices are favourable.
Mining volumes at Franke have returned to planned levels and the new stacker is on site and currently undergoing dry commissioning. Recovery optimization programs and metallurgical testing of lower acid consuming ore from the nearby the China deposit are also progressing. At Carlota, the planned changes to improve the cost structure (i.e., reduced mining rate, reduced manpower, conveyor stacking) are in place.
2011 PRODUCTION GUIDANCE:
The Company expects 2011 consolidated copper production to be at the lower end of its previously stated guidance range of 240 million pounds +/- 10%.
Annual production from Robinson is now estimated to total approximately 95 – 100 million pounds of payable copper, below the previous guidance range of 105 to 120 million pounds due to the slope stability issues experience in Q3 2011 which resulted in a re-sequencing of the mine plan and delays in accessing a portion of the higher grade material originally expected to be mined in Q4 2011.
PROVISIONAL PRICING ADJUSTMENTS:
As a result of declining metals prices, the Company estimates a pricing adjustment related to prior quarter shipments will decrease Q3 2011 revenue by approximately US$6 million. Based on the Q3 2011 quarter end copper price of US$3.24/lb, Quadra FNX estimates a cash repayment of approximately US$20 million for provisional payments received from customers for the Q3 2011 shipments.
CONFERENCE CALL DETAILS:
A conference call to discuss the Craig Access Arrangement (see separate Press Release) and Q3 2011 operating results has been scheduled for Friday, October 14 2011, at 11:30am ET (8:30am PDT). The North American toll free number for this conference call is 1-800-355-4959; all other participants please call 1-416-695-6616. The playback version of the call will be available October 21, 2011 at 1-905-694-9451 or North American toll free 1-800-408-3053 and using the pass code: 3086132.
The Q3 2011 financials will be issued on November 10, 2011 prior to market open. A conference call to discuss the second financial results has been scheduled for November 10, 2011, at 10am ET (7am PDT). Dial in details of the accompanying conference call will be issued under separate press release.
ABOUT QUADRA FNX 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, nickel and precious metals from its operating mines: Robinson in Nevada, Carlota in Arizona, Franke in northern Chile, and Levack, which includes the Morrison Deposit, Podolsky and McCreedy West in Sudbury, Ontario. The Company has two key development projects: the Sierra Gorda project, a copper-molybdenum project in Chile, and the Victoria project, a polymetallic project in Sudbury, Ontario. Quadra FNX employs approximately 2,500 people in North and South America.
FORWARD-LOOKING INFORMATION
This Press Release contains “forward-looking information” that is based on Quadra FNX’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 the Company’s future recovery levels, future production levels, cash and total costs of production of copper, gold and other minerals, timing of expected sales and final pricing of concentrate sales. 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 FNX’s actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, and developed based on assumptions about such risks, uncertainties and other factors set out herein, including but not limited to:
A discussion of these and other factors that may affect Quadra FNX’s actual results, performance, achievements or financial position is contained in the filings by Quadra FNX with the Canadian provincial securities regulatory authorities, including Quadra FNX’s Annual Information Form. Forward-looking statements are based on assumptions management believes to be reasonable. Although Quadra FNX has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate. Accordingly, readers should not place undue reliance on forward-looking statements. Quadra FNX 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, unless required to do so by law.
