NICKEL-PGM MINING: Quadra FNX and Xstrata strike deal on Craig mine

ONTARIO - Quadra FNX Mining of Vancouver and Xstrata Nickel have struck a deal whereby Quadra FNX may use the Craig mine shaft and underground workings to develop and operate the Levack nickel-gold-PGM mine, including the Morrison deposit, near Sudbury. Quadra FNX will make a payment of US$10 million during the first year of operation and US$2 million per plus a sliding scale payment based on the tonnage hoisted in each of the following years.

The Craig shaft is about 1,525 metres deep and is connected to the Morrison deposit on the 4000 level. The deposit is also accessible from a ramp from the Levack No.2 shaft on 2650 level. The changeover from the Levack No.2 to the Craig shaft is to begin immediately.

The advantages of using the Craig shaft are several. Quadra FNX will be able to increase hoisting capacity to 450,000 t/y. The development timeline for the Morrison deposit will be shorted and drill access improved by using existing infrastructure. Cost savings will be realized when the company terminates the rehabilitation program at the Levack No.2 shaft.

An operational overview of Quadra FNX's projects in the Sudbury Basin is posted at www.QuadraFNX.com.