With the mining industry’s current peak metal prices, copper
and gold enjoying some of the highest increases, and the
tremendous amount of consolidation occurring within the
industry, many of the large companies have assimilated the
smaller ones resulting in a distribution that tends towards
either extreme. And it was in this milieu that William H.
Myckatyn, CEO and director, and Paul M. Blythe, president
and director, created Quadra Mining Ltd. in May 2002.
Quadra was forged specifically to fit an emerging niche
opportunity. With only around a dozen junior to mid-tier,
small cap companies in existence, Myckatyn and Blythe
formed Quadra in an effort to take advantage of the paucity
of companies in that range and, at the same time, make the
most of the available opportunities out there for that sector.
“There are assets out there that just don’t fit the profile for
the huge companies,” explained Myckatyn. “These projects
appear to be perfectly good businesses but they just don’t
fit the bill.” It’s a niche with many opportunities and a different
level of competition for these properties that fly below
the radar of the majors. For Quadra, it seems like it’s about
finding that optimal fit.
Myckatyn and Blythe initially became friends working
together at Gibraltar and a number of other projects. “In
2002,” Myckatyn reminisced, “we sat around and looked at
the mining scene. Copper was hovering at the 75 to 85 cent
range when we started. We also saw a lack of projects on the
drawing board. That’s when we started Quadra and, working
from our homes, went looking for a mine to buy.”
Becoming a mid-tier player was an intrinsic part of their business
plan. They planned to focus their attention on North
America, South America, and Australia, the geographic areas
they have had the most experience with. “We had a good
match of skill sets and combination of technical expertise and
market exposure,” said Myckatyn. Whether it was due to their
complementary talents or Quadra’s fit with the industry, they
raised CAN$145 million in 2004, one of the largest financings
in the resource sector that year.
The Robinson mine in eastern
Nevada was the property Quadra
was founded on. That area has
known mining since the early
1900s, having produced in the area
of four billion pounds of copper and
2.7 million ounces of gold between
1908 and 1978. Initially,
Magma Copper started construction
of the project in the mid-1990s
when copper was at $1.20. BHP
Copper Inc. subsequently acquired
Magma during the construction.
Three years later when the mine
was shut down, copper and gold
prices were $0.64 per pound and
$261.00 per ounce, respectively.
The facility, reportedly, cost $480
million to build. BHP kept it on care
and maintenance for five years until it was acquired by
Quadra for $14 million in 2004.
“We got the mine restarted in record time. We began with
a contractor to help us start and were mining within six
weeks of acquiring the asset,” said Myckatyn. “We went
from zero to 100 miles an hour in about nine months.”
Starting in April with 10 people on site and growing to 400
employees by the end of August, Quadra started the mill
and produced their first load of concentrate in October, and
got paid for their first shipment in December. In 2005, their
first full year of production, they produced 126 million
pounds of copper and 81,000 ounces of gold.
Myckatyn describes that period as a time of huge achievements.
“We had been able to secure basically a new mining
fleet – trucks, shovels, and drills – in the very competitive
market. We scrambled to get people and took over mining
from the contractor in August 2005. When we started producing
our first concentrate in 2004, we realized there was molybdenum
in the concentrate and on top of it all the other startup
activities, we launched into a feasibility study.”
A molybdenum recovery circuit was designed, permitted, and
constructed by the end of 2005 at a cost of just under $8 million.
This year, based on rough estimates, they could recover
up to 1.6 million pounds of molybdenum with 30 per cent less
in the following years.
Recent recalculations have increased the Robinson mine’s expected mine life to 10.3 years based on reasonably conservative costs of copper and gold of $1.15 a pound and
$425.00 an ounce. Quadra is currently operating at 200 million
pounds a year of copper equivalent with their Robinson
mine, and with their outlined aggressive growth plan expect to
more than double that in the next couple years.