Robinson mine reopens in eastern Nevada; Quadra

Vancouver — Quadra Mining (QUA-T) has made its debut as a metals producer with the recent start-up of the concentrator at its Robinson open-pit copper-gold mine, situated 11 km west of Ely in eastern Nevada.

The mine had been shut down since 1999 owing to low copper and gold prices, but now the concentrator is operating at about 23,000 tonnes per day, or 60% of capacity.

Vancouver-based Quadra Mining formed two years ago with a goal of becoming a mid-tier base metals producer. The company raised an impressive $145 million in its initial public offering, and late last year the company bought a 33.6% interest in the Highland Valley Copper mine in British Columbia and a 100% interest in Robinson for US$73 million and US$14.8 million, respectively.

As part of the latter deal, Quadra replaced a reclamation letter of credit for US$18.1 million with Nevada’s Bureau of Land Management.

BHP Billiton (BHP-N) had completed construction of the Robinson mine in 1996 at a cost of US$480 million, and the mine’s facilities are said to have been well-maintained during the shut-down period.

“We are pleased with the initial performance of the concentrator and are glad to have formalized a long-term working relationship with mining contractor Washington Group International,” says Jack Miller, Quadra’s vice-president of operations.

Washington Group’s US$228-million contract, which runs through to 2009, will allow it to mine about 67 million tonnes of ore and waste per year at Robinson.

Currently the mining rate is now at about 80,000 tonnes per day but it is expected to ramp up to 200,000 tonnes per day by January, when the remainder of the mining fleet is commissioned.

Geologically, the Robinson property comprises 50 sq. km underlain by Paleozoic limestones, sandstones and shales that are intruded by Cretaceous quartz-monzonite porphyries and locally metamorphosed near contacts. The porphyry and metamorphosed rocks are highly shattered, hydrothermally-altered and mineralized.

Copper-gold mineralization is found near surface and in replacement-type bodies. Deposits occur as jasperoid replacements in Permian calcareous sandstone, as massive pyritic replacement bodies within metamorphosed Mississippian shale, and as silver-rich jasperoid-pyrite replacement bodies in Mississippian limestone.

The principal sulphide minerals at Robinson are pyrite and chalcopyrite. The copper and gold mineralization occurs as primary hypogene mineralization in the quartz-monzonite porphyry and as skarn mineralization in the adjacent sedimentary rocks.

Two pits are slated for mining, starting with the Tripp-Veteran pit and moving to the Ruth pit once Tripp-Veteran is mined out. Ore will be processed in the concentrator, which has a conventional crushing, grinding and flotation process that produces a copper concentrate to be marketed to both domestic and offshore smelters. Gold will report to the copper concentrate.

According to an independent technical report prepared to NI-43-101 standards in January 2004, the reserve base at Robinson is 104.6 million tonnes grading 0.72% copper and 0.29 gram gold per tonne. The stripping ratio is 3.9-to-1.

Combined resources (including the reserves) for the Tripp-Veteran and Ruth pits at a 0.6% cutoff grade, are: 101 million tonnes grading 1.10% copper and 0.009 gram gold per tonne (for a contained 1.1 million tonnes copper and 854,000 oz. gold) in the measured category; 12.3 million tonnes grading 1.08% copper and 0.005 gram gold in the indicated category (1.3 million tonnes contained copper and 669,000 oz. contained gold); and 2.3 million tonnes grading 1.05% copper and 0.12 gram gold in the inferred category.

During the four years the mine was in production, copper recoveries ranged from 60% to 86% and gold recoveries were between 37% and 63%. For the next three quarters, copper recoveries are expected to be on the low end because material in the pits has been oxidizing since the last shut down.

Quadra is also considering installing a gravity concentrator in the grinding circuit to improve gold recovery.

History

The Robinson district had seen activity for more than a century, with several underground gold and silver mines built in the district following the discovery of gold and silver in 1867.

By the early 1900s, copper-gold-molybdenum ores were being mined, with the first copper production in 1908. The majority of production came from five large open pits, with lesser production from underground mines and smaller pits.

Kennecott closed the mines in 1978, but from 1908 to 1978, more than 4 billion lbs. of copper and 2.7 million oz. gold had been produced.

Mining resumed in 1986, and through 1991 gold and silver were recovered with carbon-in-pulp technology and heap leaching. Some 300,000 oz. gold and 200,000 oz. silver were produced through 1986-91, and another 77,000 oz. gold were produced between 1991 and 1993.

A detailed feasibility study completed in January 1992 indicated the property could still produce another 125 million lbs. copper, 86,500 oz. gold and 300,000 oz. silver per year at a net cash cost of US57 cents per lb. of copper over a mine life of 16 years.

In 1994, BHP began building a modern mining and sulphide-concentrating facility, and commissioned the concentrator in early 1996 to process copper-sulphide ore from the open pits to produce copper concentrate.

In June 1999, the facilities were put on care and maintenance as metal prices sank to US64 per lb. copper and US$261 per oz. gold.