CRU/CESCO-Quadra Mining says to seek more M&A targets

TORONTO, March 30 (Reuters) - Quadra Mining QUA.TO sees opportunities for rapid expansion in the cash-strapped junior mining sector, and hopes to buy up smaller players to take advantage of a copper supply crunch that could be coming down the line, the company's chief executive said on Monday.

In an interview ahead of the CRU/CESCO copper conference in Santiago, Chile, Quadra CEO Paul Blythe said tough market conditions have changed the tune of smaller players that a year ago were quick to delay talks of potential mergers in the hopes of cashing in on rising stock prices.

"Now there's much more interest. People have got liquidity issues and other issues," said Blythe, whose company is in the process of taking over small-fry Centenario Copper CCT.TO in order to acquire Centenario's Franke copper project in Chile.

"It's a much better time (now) to put something together and roll up some of those junior players into Quadra."

Last year's plunge of metal prices combined with a freeze-up of credit markets prompted many producers to go into capital preservation mode and put some juniors in danger of insolvency.

Quadra's agreement to take over Centenario came as the junior was struggling to fund its main project.

Copper prices, meanwhile, have begun to rise following a 50 percent drop last year. The red metal had climbed 17 percent in March, before dropping 4 percent on Monday.

"Certaintly, in my best expectation scenario, I wasn't expecting to see the kind of prices we're seeing now, for quite a while yet," he said.

Blythe said the company was on the lookout for a strategic partner for its Sierra Gorda project in Chile. He said he expects project costs for Sierra Gorda could be in a range of $2 billion to $2.5 billion. (Reporting by Cameron French; editing by Peter Galloway)