Quadra FNX posts record earnings in 2010 (March 21, 2011)

Quadra Mining successfully completed its merger with FNX Mining in May 2010 and judging by the combined company’s earnings last year, the blend into Quadra FNX Mining (QUX-T) has been a success so far, with a little help from surging copper prices.

The new, mid-cap Canadian mining company posted full-year earnings in 2010 of US$173 million, or $1.11 per share. Adjusted earnings reached US$225 million, or $1.45 per share for the year.

The company turned out 224 million lbs. copper and 148,000 oz. of total precious metals (TPMs) at cash costs of US$1.57 per lb. copper. 

Production in the fourth quarter added up to 57 million lbs. copper and 39,000 oz. TPMs, while cash costs were US$1.55 per lb. copper. 

Quadra FNX ended the year with US$320 million in cash. 

Tom Meyer of Raymond James has a “strong buy” rating on Quadra FNX stock with a 12-month target price of $35 per share. At presstime, the company was trading at $14.10 per share and over the last year has traded between $8.98 per share (July 5) and $18.57 (March 10, 2010).

Highlights from Quadra FNX’s financial results included operating income from its Robinson mine in Nevada, which jumped 36% to US$193 million from US$143 million in 2009. 

The Morrison deposit in Sudbury, Ont., moved into commercial production on Sept. 1, 2010, and produced 7.1 million lbs. of payable copper in the fourth quarter and 19 million lbs. of payable copper for the year. 

At the Victoria property, where a scoping study is underway, exploration uncovered the Zone 4 sulphide mineralized system, which president and chief executive Paul Blythe describes as “one of the most important discoveries in the Sudbury district in recent history.” 

Finally at Sierra Gorda in Chile, a financing study is expected to be completed by the end of March, followed by a National Instrument 43-101-compliant feasibility study in the second quarter. The company also anticipates completing its environmental permit process in June.

In January 2011, Quadra FNX also closed the sale of its shares in Gold Wheaton Gold (GLW-T) for initial cash proceeds of $263 million, which increased the company’s cash balance to roughly $600 million.