FNX Mining Company Inc. Quadra Fnx Mining Ltd. Announces 2010 Second Quarter Financial Results by 24hgold

Mots clés associés : Canada | Copper | Dollar | Precious Metals |

News Release - Thursday, August 12, 2010
Quadra Fnx Mining Ltd. Announces 2010 Second Quarter Financial Results

(All figures, except per share amounts, are in $ US thousands unless otherwise stated or unless context requires otherwise)

Vancouver, Canada - August 12, 2010, Quadra FNX Mining Ltd. (the "Company" or "Quadra FNX") (TSX: QUX) announces net earnings of $21.7 million or $0.16 per share (basic) for the three months ended June 30, 2010 compared to a loss of $7.3 million or ($0.08) per share (basic) for the three months ended June 30, 2009. Earnings in the quarter benefited from a higher average copper price in the current year, and the increased earnings contributed from the Carlota and Franke Mines, as well as the earnings from the Sudbury operations since May 21, 2010 (the date after the closing of the merger with FNX Mining Ltd.). Second quarter adjusted earnings, which exclude the impact of derivative gains, gains and losses on marketable securities and investments, merger costs and related tax adjustments, were $20.6 million or $0.15 per share (basic). Operating cash flow before working capital of $43.4 million or $0.31 per share in the second quarter 2010 compares to $24.4 million or $0.26 per share in the same period of 2009. During the second quarter 2010, Quadra recorded revenues of $169.1 million from the sale of 46.5 million pounds of copper and 28,133 ounces of total precious metals (TPM).

Revenues, cashflows and earnings from the former FNX operations are reported only for the period commencing May 21, 2010 (the date after the closing of the merger with FNX Mining Ltd.).

Paul Blythe, President and CEO of Quadra comments; "In the second quarter of 2010, we successfully completed the merger with FNX Mining Company Inc. and with this transaction, established a new, mid-cap Canadian mining company with considerable financial strength and a diverse asset base. The immediate focus following the merger has been the integration of the two companies and the optimisation of the various projects and operations that are ramping up. Our second quarter financial results, while solid, reflect some of the production issues we experienced in the first half of the year, particularly at our two heap leach operations -- the Carlota and Franke mines. As reported in the Press Release dated June 19, 2010, production has been affected at Carlota, by the one in 300 year rain event in January, and at Franke, by equipment availability and recovery issues. There has been good progress at both operations in dealing with these issues and we expect to see continuing improvements in the second half of the year.

The Robinson Mine continued to generate the majority of our overall revenues and operating income during the quarter, however, as we have mined further into the Ruth pit, which will be the only production pit by the fourth quarter, an area of underground workings from the 1950's has proven to be larger than expected. These workings were block caves where higher grade ore was extracted, with lower grade material then caving in to fill the voids. While we continue to understand and evaluate the impact of this block caving, we feel it prudent to lower Robinson's copper production expectation to 115 -- 125 million pounds of copper and 75,000 ounces of gold for the year (previously 135 million pounds of copper and 80,000 ounces of gold). We were aware of the underground workings at Ruth and have relied on historical records to understand these. Now that we are well along with dewatering the pit, we have the drill access required to drill from the bottom of the pit to confirm the full extent of these workings, and this work is in progress."

Paul Blythe continued; "Looking at the Sudbury assets, the Morrison deposit is still on track to achieve commercial production in the third quarter, building up through the fourth quarter to full production in 2011. The Morrison deposit is expected to meet its 2010 payable metal objectives. A deliberate decision has been made to maximise mined grade, delivering the same metal production in fewer tons, to provide the best overall cost structure taking into account processing and smelting charges. At the Podolsky Mine, the second quarter was a significant improvement over the first and we expect this trend to continue and for this asset to achieve its production target for the year.

We continue to make progress at our development assets, in particular at Sierra Gorda where we are on schedule to have the financing study completed by year end. Following the withdrawal of State Grid as a potential development partner, discussions with other interested parties commenced immediately. We plan to wait until some key milestones are reached in the study before entering into definitive negotiations. At the Victoria property in Sudbury, we have continued our exploration success and to date have discovered four different sulphide-mineralized zones to a depth of approximately 6,050 feet."

Paul Blythe concludes; "In conclusion, this quarter certainly had some challenges, but, as a result of the merger, the combined company is stronger both financially and with respect to operational expertise. Our immediate focus is on our existing operations and on integration, but our overall objective remains unchanged, to continue to grow the Company organically and through M&A."

A summary of the financial statements together with the Management Discussion and Analysis ("MD&A") are provided below. The complete financial statements and the MD&A will be available at www.quadramining.com and www.sedar.com.

The following Management Discussion and Analysis ("MD&A") of Quadra FNX Mining Ltd. and its subsidiaries ("Quadra FNX" or the "Company") has been prepared as at August 11, 2010 and is intended to be read in conjunction with the accompanying unaudited consolidated financial statements for the three and six month periods ended June 30, 2010. This MD&A contains 'forward looking information' and reference to the cautionary statement at the end of this MD&A is advised. Additional information relating to the Company, including its Annual Information Form, is available on the SEDAR website at www.sedar.com. The Company is a reporting issuer in all provinces and territories of Canada and its common shares are traded on the Toronto Stock Exchange under the symbol: QUX.

All financial information in this MD&A is prepared in accordance with the Canadian Generally Accepted Accounting Principles and all dollar amounts are expressed in thousands of United States dollars unless otherwise indicated.

To view 2010 Second Quarter MD&A, please click here.

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