Quadra Mining and FNX Mining announced on March 23 a definitive agreement to merge the two companies. The merger has the approval of the boards of directors of both companies and is conditional upon FNX and Quadra shareholders approving the merger by 66-2/3% and 50%+1 of voting shareholders, respectively. Special shareholder meetings for each company to vote on the merger are expected to be held in May 2010, with closing expected shortly thereafter.

Assuming realization of the merger, the combined company will be named Quadra FNX Mining Ltd. and will have a market capitalization of about $3.5 billion. A strong balance sheet will include approximately $580 million in cash and investments and $50 million in bank debt. Revenues for 2011 are estimated at $1.5 billion based on forecast production of about 300 million lb of copper and 150,000 oz of precious metals, plus byproducts.

Quadra is based in Vancouver, British Columbia. Its principal assets are the Robinson copper-gold mine in Nevada, the Carlota copper mine in Arizona, the Franke copper mine in northern Chile, the Malmbjerg molybdenum development project in Greenland, and the Sierra Gorda copper-molybdenum development project in northern Chile. The Sierra Gorda project is the subject of a proposed joint venture between Quadra and SIGD, of China, announced on March 8, 2010. This proposed joint venture is reported in greater detail in the Latin America regional news section of this issue.

FNX is headquartered in Toronto, Ontario. The company produces, develops and explores for copper, nickel, cobalt, platinum, palladium and gold at its mining properties in the Sudbury district of Ontario. FNX produces ore from its McCreedy West, Levack and Podolsky mines, crushes and samples the ore on surface, and trucks it to third-party facilities to be milled, smelted, refined and marketed. The company has imminent production growth plans focused on higher-margin copper-precious metal ores, including the emerging high-grade Levack Footwall Deposit.

The merged company will continue to operate offices in both Vancouver and Toronto.

Terry MacGibbon, chairman and CEO of FNX, will become non-executive chairman of Quadra FNX. Paul Blythe, president and CEO of Quadra, will retain those positions with the merged company. Commenting on the attributes the merged company, MacGibbon said, “Quadra’s operating skills and expertise in large-tonnage, open-pit copper-gold mines and FNX’s proven performance in underground mining of lower-tonnage, high-value copper-nickel-precious metal ore provide a unique combination of skill sets that will enable Quadra FNX to operate a variety of mines around the world.”