Quadra FNX Mining and Xstrata team up – by Star Staff (Sudbury Star – October 15, 2011)

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

Quadra FNX Mining Ltd. announced Friday it has an agreement to use a mine shaft owned by Xstrata Nickel, saving Quadra millions and helping to increase production at its Levack Mine.

The company said the 1,500- metre shaft at the nearby Craig Mine, owned by Xstrata Nickel, will significantly improve flexibility and provide more access to the ore.

“The access arrangement with Xstrata Nickel provides mutual benefits to both parties going forward,” Quadra FNX president and CEO Paul Blythe said in a release. “We will be advancing the implementation plan in order to shift operations from the Levack number two shaft to the Craig shaft immediately. This will be a significant step forward in the optimization of our (nearby) high-grade Morrison deposit.”

Quadra FNX’s Levack mine complex produces nickel, copper, platinum, palladium and gold.

For Xstrata Nickel, the deal with Quadra FNX allows it to keep the infrastructure at its former Craig mine, which closed in 2009, in working order.

Quadra FNX will operate the Craig shaft and underground infrastructure, but will not undertake mining from Xstrata Nickel’s Craig property. The Craig shaft, which is about 5,000-feet deep, is connected to Quadra FNX’s Morrison deposit by an access drift on the 4,000- level that represents a second access point to its operations. The first access point is a ramp from the Levack number two shaft on the 2650 level.

Under the deal, Quadra FNX will pay US$10 million during the first year of operation and $2 million a year after that.

As well, Quadra FNX will pay a sliding scale amount for each ton of ore hoisted to the surface using the shaft.

Quadra FNX said using the shaft at Craig Mine, which is already connected to the Morrison deposit, will save the company about $20 million in capital costs and allow it to increase the rate of ore produced from the Morrison deposit by up to 25%.

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