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Sierra Gorda is a late-stage copper exploration project located in the Atacama Desert, Region II of Chile with recent results indicating the potential for a large porphyry deposit. The project comprises a land package that was consolidated for the first time by Quadra in 2004 and is in an area that contains a number of significant copper mines and resources including BHP Billiton's Spence project 10 km to the northeast and the El Tesoro mine approximately 15 km to the southeast. The property consists of eight contiguous properties that cover an area of approximately 23 km2. The Company previously had a number of options to acquire the interest in the Sierra Gorda project and recently agreed to accelerate payments totalling $22.5 million to exercise the core eight of such options. As a result the Company now has a 100% ownership in the project. History and Recenty Developments: The Sierra Gorda property has been explored by numerous companies who defined modest molybdenum and copper, breccia-controlled, stockwork mineralization. In 2005 Quadra produced a NI 43-101 Technical Report which defined 5 billion pounds of copper equivalent in the indicated and inferred categories. In 2006, Quadra's drill hole QSG06-281 changed the perspective of the property by interesecting long intervals of significant copper, gold and minor molybdenum mineralization. This drilll hole intiated a large exploration program resulting in the substantial resource reported in the Updated NI 43-101 Technical Report in May 2008. The project is essentially composed of four centres of mineralization: Catalina, Salvadora and two newly discovered areas, 281 Zone and 285 Zone. The mineralization is best described as porphyry style. From the surface down to approximately 150 metres, the oxidized rock contains remnant and enriched oxide copper mineralization and a weakly developed zone of supergene-enriched copper. The principal metal is copper, occcuring throughout the mineralized area, while molybdenum occurs dominantly at Catalina and Salvadora and gold in low but potentially economic quantities with the higher grades of copper. Based on the NI 43-101 Tehcnical Report dated May 16, 2008, the project has an indicted mineral resource estimate of 10.6 billion pounds of copper and 474 million pounds of molybdenum and an additional inferred mineral resource of 5.5 billion pounds of copper and 211 million pounds of molybdenum. Acquisition of Water Rights: On May 8, 2008 the Company acquired the premitted water rights to 319 litres per second ("lps") of water capacity located in Pampa Llalqui, Calama in Region II, norther Chile. As of the end of March 2008, Quadra had acquired the pumping rights to 129.5 lps of water from various sellers so now holds water rights totalling 448 lps. This represents a significant portion of the estimated overall water requirments for the project and its potential development. Health and Saftey There have been no Lost Time Accidents or Reportable Incidents at the Sierra Gorda project since the Company commenced work there in 2004. Outlook: As a result of exploration results and the associated substantial resource, the Board of Directors has approved a $37 million development program through to mid 2009. The program will include infill definition drilling aimed at moving additional resources into the measured and indicated category, together with the metallurgical, geotechnical, environmental, infrstructure and engineering studes required for the pre-feasibility and feasibility stages of the project. NI 43-101 Compliant Resource Estimate: The Sierra Gorda resource, which adheres to the 2000 Classification of Mineral Resources and Mineral Reserves of the Canadian Institute of Mining, Metallurgy and Petroleum, and in accordance with the standards set out in NI 43-101, is classified as Indicated or Inferred. The Updated Technical Report reflects the work undertaken by Mine Development Associates Inc. ("MDA") and was prepared by Steven Ristorcelli, P. Geo of MDA, assisted by Peter A. Ronning, P. Eng of New Caledonian Geological Consulting, Gary Lustig, P. Geo of G.N. Lustig Consulting Ltd. and Pat Fahey, P. Geo., Vice President, Exploration of Quadra, which of whom is a 'qualified person' as such term is defined in NI 43-101. The Updated Tehcnical Report recalculates the resource estimate for the property, taking into account the drilling work undertaken by the Company since the date of the previous technical report dated August 3, 2005 which was also pepared by MDA. Copper and molybdenum were estimated separately; gold has not been assayed sufficiently for reporting although it was estimated. The Technical Report describing the estimate is available below as well as on SEDAR.
Estimated Sulphide & Supergene Resource
Notes:
(1) The minimum cutoff grades were determined using the operating costs for similar operations in Chile.
Estimated Oxide Resource
The supergene copper is reported wih the sulphide, alhough it could be processed with the oxide or hypogene sulphide. The above resource table does not include all of the most recent drilling reesults which are designed to confirm the continuity of mineralization through much of the resource area. A summary of those additional holes with Cu results over 0.20% are published in the press release dated May 12, 2008.
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