Brenda Bouw
RTGAM



Quadra Mining Ltd. and FNX Mining Company Inc. have announced a "merger of equals" to create an intermediate Canadian copper producer with a market capitalization of $3.5-billion.

The merged company will create enough clout to become a "leading industry consolidator," the two companies said Tuesday.

The proposed new company, Quadra FNX Mining Ltd., will have assets in Canada, the United States and Chile, with estimated revenues of $1.5-billion in 2011, as well as $580-million in cash and investments and $50-million in bank debt.

"This merger of equals will result in the establishment of a new, mid-cap, Canadian mining company with existing mining operations ... and the opportunity to grow into a leading mining company," said FNX chairman Terry MacGibbon, who will become non-executive chairman of the new company. Quadra CEO Paul Blythe will be the CEO of the new company.

"The merger of Quadra and FNX is a springboard transaction that creates a leading intermediate copper producer with financial strength, a solid asset base, and an experienced and entrepreneurial management team," Mr. Blythe said.

"Consistent with our longstanding strategy of growth through a combination of organic and M&A strategies, Quadra FNX will build on the strong foundation of both companies to continue growing and delivering value for Quadra FNX's existing and new shareholders."

The announcement comes two weeks after Vancouver-based Quadra struck a $1-billion joint-venture deal with a Chinese state-owned utility company to develop Quadra's Sierra Gorda project and Franke mine in Chile.

Quadra's other assets include the Robinson copper-gold mine in Nevada, the Carlota copper mine in Arizona and the Malmbjerg molybdenum development project in Greenland.

Toronto-based FNX is a diversified metals producer in the Sudbury mining camp in northern Ontario, Canada.

More to come