Quadra driving Franke down the home stretch

Quadra Mining (QUA-T) is banking that it is the right company to finally get the Franke copper project in Chile into gear.

And with the mine slated to go into production in the third quarter of this year, it isn’t far away from doing so.

If it can, it will realize what Centenario Copper couldn’t.

Like many smaller miners the economic downturn and the credit freeze had taken a toll on Centenario and after beginning development of the project in 2007by the beginning of this year the start-up date for the mine was in doubt.

Quadra, with its $897 million market cap, acquired the project in April by taking over Centenario in an all stock transaction that saw it exchange 0.28 of each of its shares for one Centenario share.

The project is now wholly owned by Quadra and when complete will host an open pit that mines oxide copper from a volcanic hosted hydrothermal stockwork. The deposit has 41.7 million tonnes in the proven and probable reserve category with an average grade of 0.75% copper.

Over the estimated 8.6 year mine life cathode copper will be produced on site from a heap leach with an SX/EW plant at a rate of 30,000 tonnes per year.

And while Quadra’s deeper pockets and better operational experience have been a boost to development, one sticking point for the project remains — the massive amounts of sulfuric acid required at the site.

The mine needs 50 kg of sulfuric acid per tonne of ore due to the high levels of carbonates in the rock. That figure is 10 times the amount Quadra uses at its Carlota mine in Arizona.

But an agreement with Chile’s state-owned copper company Codelco to provide 50% of Franke’s acid gave Quadra enough confidence to make the deal with Centenario. The company says it is working on securing the remaining the 50%.

While securing all the sulfuric acid it needs will be challenging, other aspects of the project are much simpler.

Situated in the Altamira district of Chile, near the southern limit of the Antofagasta Region, the project is blessed with access to solid infrastructure.

A 60 km of gravel road links the project to the Pan American highway and it is also connected to the local rail system.

And while water is a scarce commodity in one of the world’s driest regions, the company has secured supply from a Codelco project 70 km away for the entire mine life.