Quadra surprises with boost in production

Vancouver — Fourth-quarter copper and gold production from Quadra Mining’s (QUA-T, QADMF-O) flagship Robinson mine near Ely, Nev., was up significantly, driving last year’s total metals output above forecasts.

Production for the fourth quarter of 2006 came in at 35.3 million lbs. copper and 27,646 oz. gold from the large open-pit operation. Output for the full year was 121.4 million lbs. copper and 75,074 oz. gold, exceeding the company’s revised production estimates by about 6% and 30%, respectively.

“We made significant progress during the quarter in getting on top of the metallurgical issues confronting us and were able to deliver our best quarter of 2006, as well as exceeding our revised annual guidance,” said Quadra president Paul Blythe.

“We are now out of the supergene zone that contained the non-acid soluble copper that impacted on our recovery,” Blythe continued. “Over the last two weeks of 2006 as we began mining the lower benches, we saw recoveries return to more normal levels of approximately eighty per cent.”

Quadra expects Robinson will post 2007 metal output of about 125 million lbs. copper and 60,000 oz. gold. The company recently added a molybdenum circuit to the operation to recover the metal, but does not report its specific production.

As of early 2006, Robinson hosted proven and probable reserves of 145.5 million tonnes of 0.69% copper and 0.25 gram gold per tonne — sufficient for about 10 years of operation at current mining rates.

The company purchased the mine from BHP Billiton (BHP-N) in 2004 for $14.2 million. BHP spent an estimated US$480 million in the mid-1990s to build the mine, which it operated from 1996 until it was placed on care and maintenance in 1999 due to low metal prices.

Quadra is also proceeding with development of its Carlota copper project in central Arizona. Acquired for US$37.5 million in late 2005 from Cambior, now part of Iamgold (IMG-T, IAG-N), the deposit hosts reserves of about 80 million tonnes grading 0.45% copper and is expected to produce an average of 75 million lbs. copper annually over 11 years.

In northern Chile’s Atacama Desert, the company is evaluating its advanced-stage Sierra Gorda copper project. Previous exploration by Finnish metals giant Outokumpu (OUTKF-O) was extensive, including 63,000 metres of drilling, a 1.4-km decline and metallurgical studies, and led to a historical resource estimate of 110 million tonnes of 0.6% copper and 0.1% molybdenum.

Quadra’s drilling at Sierra Gorda since 2004 has provided enough data for an updated resource estimate on the deposit. Indicated sulphide resources of 215 million tonnes averaging 0.38% copper and 0.066% molybdenum have been tabled.

Additionally, the company has outlined about 181 million tonnes of indicated oxide resources at 0.37% copper.

Recent drilling of deep sulphide targets returned a number of wide copper intercepts. Hole QSG-6-281 in the 281 zone returned 338 metres (from 242 metres down-hole depth) of 1.05% copper, 0.014% molybdenum and 0.2 gram gold, including a 100-metre interval of 1.4% copper.

Trading in Quadra shares rallied over 5% on the production report to close up 44 at $8.74 apiece. The company posts a $333-million market capitalization based on its 38.1 million shares outstanding, and has traded in a 52-week range of $5.40-$13.35.