Results And 2010 Production Guidance

 

 

VANCOUVER, BC - Paul Blythe, President and CEO of Quadra Mining said, "Third quarter production results at Robinson, Carlota and Franke mines were in line with our expectations as previously announced [See Press Release: October 13th 2009] with 44 million pounds of copper produced from the three operations, including the first 4 million pounds of copper produced at our new Franke mine which will be sold in the fourth quarter."

"Third quarter earnings were impacted by the previously reported lower than planned sales volumes at the Robinson mine in White Pine County, Nevada, as well as by the copper price, which, although much improved from the first and second quarters, is still below levels of a year ago. Earnings were also impacted by a $13.8 million accounting loss on derivatives primarily related to the collar contracts which were a requirement of the Franke project loan.

"At Robinson, we had gained full access to the hypogene ore in the Veteran pit required for our blending strategy by mid August and the mine produced 33.6 million pounds of copper and 21 thousand ounces of gold during the third quarter of 2009 at a cash cost of $1.27 per pound of copper produced. We continued to struggle with supergene ore from the Kimberly/Wedge pit, primarily as a result of chalcocite coated pyrite, although we were able to achieve our concentrate grade target of 24% copper at the expense of a lower overall recovery. Due to the performance of this ore, we are now forecasting production of 120 to 125 million pounds of copper and 90,000 ounces of gold in 2009, compared to guidance of 130 million pounds of copper and 100,000 ounces of gold.

Concentrate from the quarter that had to be stockpiled due to low grade has now been blended back into the system and augmented sales volumes are expected for the fourth quarter. In 2010 mining will continue in the Veteran Pit and mining moves from the Kimberly/Wedge pits to areas in the Ruth pit. We are expecting ongoing metallurgical issues as we work through the higher elevations at Ruth and are increasing drill density to improve our understanding of what we will be dealing with over the next two years, following lessons learned from Kimberly / Wedge and the higher benches of Veteran. Quarterly variability will certainly continue and lower gold head grades will result in lower gold production than previous years. Taking all of this into account, we estimate production of 135 million pounds of copper and 80,000 ounces of gold in 2010."

Blythe said, "At the Carlota, located in Pinal and Gila counties, Arizona, the mine produced 6.6 million pounds of cathode copper, levels similar to previous quarters. The production rate continues to be affected by lower than scheduled ore mined as well as lower than planned leaching rates. Additional bench development work has been necessary for the ultimate pit wall above the Pinto Creek diversion channel, requiring the reallocation of mining equipment. Development of this channel is required to access the higher grade and larger volumes of ore beneath the existing creek bed. The channel is now substantially complete, allowing the operation to focus all of the equipment on the normal mining sequence. Leaching rates have been 25% lower than anticipated due to the fines content of the ore and the segregation of fines during the ore stacking process. We expect the fourth quarter to look very similar to previous quarters and are estimating cathode production of approximately 26 million lbs for the year. The percolation issue is being evaluated on a number of fronts including definition drilling within the pit, column testing, pad construction, ripping strategies and fines agglomeration. However, these approaches may or may not allow the irrigation rate to be increased and until we have completed this work, we are basing guidance for 2010 on the percolation rates achieved to date. With that, the expected production from Carlota in 2010 is 50 million pounds of cathode copper."

"We continued to ramp up production at the Franke mine, in Chile, during the quarter with a total of 4.1 million pounds of copper cathode produced and are expecting to produce 6 -- 8 million pounds in the fourth quarter when we also expect to begin revenue recognition. The residual design and construction issues that affected start up are now mainly resolved and modifications to the primary crusher feed system are expected to result in the operation reaching design capacity by year end. With that, we are targeting production of approximately 65 million pounds of cathode copper for 2010."

Blythe concluded, "During the quarter we reported positive results of a scoping study at our Sierra Gorda project in Chile [See Press Release July 23rd]. The substantial scale make it one of the larger copper development projects discovered in this decade and potentially one of the world's largest molybdenum mines in the first eight years of its at least 25 year mine life. The strong economics support moving forward to pre and full feasibility studies with a view to moving the project through to production. Our team is mobilised and we plan on expending approximately $40 million through to the end of 2010 on the study itself. Discussions with potential partners continue."

"While our production ramp-up has not been as rapid as we had anticipated at Carlota, we are expecting improvement by year end and going forward into 2010. We have made good progress resolving start-up issues at Franke and are confident in our team at Robinson to manage the variability inherent in the deposit."

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.