Positive Results From Sierra Gorda Scoping Study

 

VANCOUVER, BC - Quadra Mining Ltd. reported the successful completion of a scoping study for its 100%-owned Sierra Gorda project in Chile, including a preliminary economic assessment and an updated NI 43-101 compliant mineral resource estimate.

The study supports an open pit and concentrator operation processing 111,000 tonnes of mill feed per day and producing between 250 and 400 million pounds of copper per annum over a 25 year mine life at an average cash cost of $0.79 per pound. The project would also have significant molybdenum production, averaging 33 million pounds per year over the first eight years, and declining thereafter. This high level of molybdenum production results in an average cash cost of $0.34 per pound produced during these first eight years. Using a long term copper price of US $2.00 per pound, molybdenum price of US $12 per pound and gold price of US $800 per ounce, the project produces an after-tax net present value (10% discount rate) of US $622 million and an internal rate of return of 16%.

The Sierra Gorda project is located approximately 140km north-east of Antofagasta, Chile in one of the world's most prolific copper mining districts. Based on the preliminary economic assessment and engineering studies, the Sierra Gorda deposit contains approximately one billion total tonnes of sulphide mill feed, representing approximately 74% of total measured and indicated sulphide resources. In addition, there are approximately 456 million tonnes of inferred resources. There are also significant oxide measured and indicated resources that were assumed to be waste for the purposes of this scoping study but will be subject to future economic study. As Quadra's 475 litres per second of water rights are not yet permitted, the study assumes that the water required for Sierra Gorda will be supplied from seawater, a higher capital and operating cost alternative.

Based on the preliminary assessment, Quadra intends to advance the project towards prefeasibility and feasibility studies at a cost of approximately $40 million. The next steps include further metallurgical testwork to better define molybdenum recovery and concentrate grade, progression of the Environmental Impact Study and associated permits, evaluation of all water supply options, infill drilling, and further trade-off and optimization studies to continue to improve project economics.

Paul Blythe, President & CEO comments, "The scoping study demonstrates the positive economics that we need to move the project forward towards development and production. 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. Sierra Gorda represents one of the largest copper development projects of this decade, and could become one of the largest molybdenum mines in the world in its first eight years of production. The project is estimated to double Quadra's annual copper production and significantly lower our unit cash costs."

The company’s address is Suite 2414, Four Bentall Centre, 1055 Dunsmuir Street, P.O. Box 49185, Vancouver, BC V7X 1K8, 604-689-8550, fax: 604-689-8556.