FNX evolved from a junior resource company into a well-financed, well-managed profitable mining company, stated FNX vice president Vern Baker at an April 27 presentation to members of the Sudbury Area Mining Supply and Service Association. Despite the global recession and market downturn in 2008, FNX recovered and had a profitable year in 2009.
CEO and chairman Terry MacGibbon attributed its success to the hard work and dedication of its employees and improved commodity prices. The company advanced the development of its high-grade Levack Footwall deposit toward scheduled commencement of production in mid-2010 and increased exploration efforts resulted in a promising discovery at the Victoria property, he said.
FNX’s consolidated revenues in the 2009 fourth quarter were $108.6 million and $238.2 million for the full year. Production from the company’s Sudbury mining operations generated revenues of $94.9 million in the fourth quarter and $185.2 million for the year.
Quadra, a Vancouver-based multi-asset copper and base-metal producer, owns and operates three mines: the Robinson Mine in Nevada, the Carlota Mine in Arizona and the Franke Mine in northern Chile. It is advancing two other projects: Sierra Gorda, a copper-molybdenum project in northern Chile and the Malmbjerg molybdenum project in Greenland.
The asset portfolio includes five operating mines in three low-risk jurisdictions and offers the company exposure to Sudbury Basin copper-nickel-PGM production and long-term growth potential from the high-grade Levack Footwall deposit and the large-scale Sierra Gorda development project in Chile.
With a market capitalization of $3.5 billion and $580 million in cash, the new company will reap the benefits of Quadra’s open-pit mining and metallurgical expertise and FNX’s underground mining and exploration prowess.
The bigger company will have more resources to accelerate mine development in the Sudbury Basin, said Baker.
Sudbury and area suppliers with innovative solutions will also benefit through potential sales to company operations in other jurisdictions.
FNXQuadra is expected to generate 2011 revenues of $1.5 billion and EBITDA (earnings before interest, taxes, depreciation and amortization) of approximately $765 million.
The new board of directors will have five representatives from each company. It will also include a representative of China’s State Grid International Development Limited.
MacGibbon will become non-executive chairman of Quadra FNX and Quadra’s CEO and president Paul Blythe will retain his position. The company will continue to maintain offices in Toronto and Vancouver.