UPDATE 2-Quadra outlines resource at Victoria project

Tue Apr 19, 2011 9:06am EDT

* Outlines 3.4 bln lb copper resource at Victoria

* Q1 copper output declines due to operational issues

* Sees C$60 mln pre-tax gain from sale of Far West stake (Adds details on first-quarter production, Far West sale)

By Euan Rocha

TORONTO, April 19 (Reuters) - Quadra FNX Mining Ltd QUX.TO outlined a resource at its Victoria copper-nickel project in Ontario that is equivalent to about 3.4 billion pounds of contained copper, the company said on Thursday.

The resource estimate for the project located in Sudbury, Ontario, is compliant with regulatory requirements and grades at the site are well above those historically found in the region, the company said.

Sudbury, in northern Ontario, has a century-long mining history. The region is home to some of the world's most prolific nickel mines. Most of giant Brazilian mining company Vale's (VALE5.SA) nickel operations are located in the area.

Quadra, which already owns operating mines in Sudbury, along with operations in Chile and the United States, said the underground development of the Victoria project is expected to begin in 2012.

The company has completed an internal study on the project and estimates that production at the site could begin by 2017.

OUTPUT SLIPS

Copper output in the first-quarter of 2011 fell more than 16 percent from a year ago to 46 million pounds, as the company continues to work through operational issues at its Robinson mine in Nevada.

The company said 2011 production from Robinson, its largest producing asset, is expected to be weighted toward the back end of the year.

Copper production from the Sudbury operations was slightly better than planned, with production at Morrison continuing to ramp up as scheduled, the company said. Quadra began commercial production at Morrison in September last year.

Quadra expects to complete a financing study on the Sierra Gorda project by the end of the first quarter.

Sierra Gorda, in Chile, is expected to produce more than 300 million pounds of copper a year over a 25-year mine life. It is also expected to produce about 16 million pounds of molybdenum and 36,000 ounces of gold annually.

The company is seeking a new partner to help develop the large copper project after it failed to reach an agreement with State Grid International Development Ltd, a wholly owned subsidiary of State Grid Corp of China. (Reporting by Euan Rocha, editing by Gerald E. McCormick and Derek Caney)

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