Stan Sudol is a Toronto-based communications consultant, who writes extensively about mining issues.([email protected])
Michael Winship is a familiar name in Northern Ontario’s hard-rock fraternity
“It’s all about copper at Quadra FNX,” chief operating officer Michael Winship told a packed audience at a lunch presentation hosted by the CIM Toronto branch January 20th.
The red metal, a key indicator of global economic strength, has soared over the past few months from a low of US$2.85/pound in July 2010 to around US$4.35 in January. (It hit an all time low of about US$1.25 in December 2008 during the last recession.)
Winship provided an overview of future investments that the newly merged company will be making in the next few years to take advantage of the booming demand for copper.
In March of 2010, Vancouver-based Quadra Mining Ltd. and Sudbury-based FNX Mining Company Inc. announced a friendly merger that combined Quadra’s open pit and metallurgical expertise and FNX’s underground mining and exploration prowess.
Quadra FNX operates three open pit copper mines in Nevada, Arizona and northern Chile, while its three underground mines, Podelsky, Levack and McCreedy West, are located in the northern range of the Sudbury Basin.
The company has two major projects in the pipeline, Sierra Gorda, an open pit copper development in northern Chile and the Victoria underground deposit on the western side of the Sudbury Basin.
Michael Winship, a familiar name in the Northern Ontario hard-rock fraternity, has more than 30 years experience in mine development and operations. He has been involved in the development or operation of more than 20 mines in diverse jurisdictions around the world, including Australia, Papua New Guinea, the U.S. and Indonesia, as well as northern Canada and the Sudbury Basin. Between 2000 and 2007, Winship worked at Vale Inco where, in his last position as vice president, mining and milling, he was responsible for seven nickel/copper/PGM mines and central milling operations in Sudbury.
Flipping a copper penny for emphasis, Winship noted that it probably costs the government roughly 1.5 cents to make every penny at the current price of copper and that not many companies would be operating on those economic principles. He also highlighted the geological potential of the Sudbury Basin as a “world-class location.” Quadra FNX presentations always point out that Sudbury is a trillion-dollar mining camp at 2007 metal prices and that copper, cobalt, gold, silver, and PGMs contribute enormously to the profitability of the mines alongside nickel.
Quadra FNX’s polymetallic deposits on the northern rim of the Sudbury Basin have higher concentrations of copper and PGMs than nickel. During 2010, in Quadra FNX’s Sudbury mines, approximately 61 per cent of revenue came from copper, 26 per cent from nickel and 13 per cent from gold, silver and PGMs.
Historically, the Sudbury mineral discovery was thought to be copper, not nickel. Copper Cliff was named after the red metal.
One of the best examples of the region’s mineral wealth is the Levack Mine’s high-grade, copper-precious metal Morrison deposit discovered in 2005. “The average grade is 7.5 per cent,” said Winship. “We have been using very selective mining techniques and the average mine grades have been in the double digits, for example 11.2 per cent Cu in Q3/10.”
As of December 2009, the Morrison deposit had a Measured and Indicated resource of 1.35 million tons at 8.66% Cu, 1.75% Ni, and 0.24 ounces per ton Pt-Pd-Au.
Drill results at depth indicate that this resource could grow significantly once the company is able to access the lower part of the orebody and complete sufficient drilling to NI 43-101 standards.
By comparison, an average large open-pit copper operation with a one per cent grade would be considered a significant world-class mine.
Victoria’s Geological Secrets May Be Very Rich
Even though copper and PGMs are making a significant contribution to the company’s bottom line in the Sudbury Basin, Quadra FNX is not ignoring nickel.
“In the Sudbury Basin, we have been very fortunate to have significant exploration success in Cu/PGM rich orebodies,” said Winship. “However, we have also continued to explore for and discover significant volumes of contact nickel ores at our McCreedy West and Levack Mines, and we are also targeting polymetallic Ni-Cu-Pt-Pd-Au deposits (such as Victoria) in our exploration programs.”
In 2011, Quadra FNX has budgeted US$5 million for infill exploration at Victoria, an offset dyke deposit, and a further US$12 million for its other properties.
Many industry observers are becoming increasingly impressed with the Victoria property as it reveals its geological secrets. The exploration results are “significantly higher than average Sudbury camp grades” and both copper and total precious metal grades seem to be increasing with depth. In a September 2010 news release, Quadra FNX reported an intersection of 71 feet of 4.1% copper and 2.0% nickel, with an impressive 60.1 g/t of TPMs (total precious metals) at 6,200 feet. They have still not found the bottom of the orebody and both copper and TPM grades appear to be increasing with depth.
“From a geological point of view, we believe that Victoria has a lot of the same characteristics as Frood, but we have not yet completed the drilling to fully understand the size of this deposit,” said Winship.
The Frood Mine is one of the legendary deposits in the Sudbury Basin – for many years it held the title as the greatest nickel-copper orebody in the world – and any comparisons with the Victoria property indicate a potentially important discovery. Environmental studies, permitting and discussions with community stakeholders are underway.
Stan Sudol is a Toronto-based communications consultant and mining columnist. [email protected]