Quadra FNX Mining announced in mid- June its memorandum of understanding with State Grid International Development Ltd. of China regarding formation of a 50:50 strategic joint venture to develop and operate Quadra FNX’s Sierra Gorda project and Franke mine in Chile (E&MJ, April 2010, p. 12) had expired without the parties reaching a definitive joint-venture agreement.
Sierra Gorda feasibility study work had identified a need for significant capital expenditures in advance of receipt of project permits in order to meet the project’s targeted completion date of 2013, Quadra FNX said. These expenditures would be for long-lead-time equipment and detailed engineering studies. State Grid was not prepared to make this financial commitment prior to receipt of all necessary permits.
Quadra FNX said the two parties will remain open to discussions once the feasibility study has been completed and the permitting process is further advanced. In the meantime, Quadra FNX is free to engage in negotiations with other parties that have continued to express interest in the project.
Quadra FNX expects the Sierra Gorda feasibility study to be completed by the end of 2010. The estimated total cost for the project, up to the commencement of production, remains in the $2-billion range.