Mercator Minerals Completes Acquisition of Creston Moly
VANCOUVER, June 22, 2011 /CNW/ --
TRADING SYMBOL: TSX - ML
VANCOUVER, June 22, 2011 /CNW/ - Mercator Minerals Ltd. ('Mercator' or
the 'Company') is pleased to announce that it has completed the
previously announced arrangement with Creston Moly Corp. ('Creston'),
pursuant to which Mercator has acquired all of the issued and
outstanding shares of Creston, which is now a wholly owned subsidiary
of Mercator.
Mercator is also pleased to welcome Bruce McLeod (President and Chief
Executive Officer of Creston) as the new President and Chief Executive
Officer of Mercator. Michael Surratt (Mercator's former President and
Chief Executive Officer) will continue to work with the Company, on a
consultancy basis, as technical advisor to the President and Chief
Executive Officer. Mercator would also like to welcome Bruce McLeod
and Colin K. Benner to the Mercator board of directors, and announce
the retirement of Michael L. Surratt and Raymond R. Lee as directors of
the Company.
The transaction was approved by 99.3% of the eligible votes cast at the
meeting of Creston shareholders, representing 63.3% of Creston's
outstanding shares that were eligible to vote. Pursuant to the Plan of
Arrangement, each Creston shareholder has received 0.15 of a common
share of Mercator and $0.08 in cash in respect of each common share of
Creston.
'The addition of the world-class El Creston project to our asset
portfolio establishes an attractive and continuous growth pipeline for
Mercator. With Mineral Park's Phase II expansion to be completed next
month, the Company can now turn its focus to the development of El
Pilar in 2012 and then El Creston in 2013,' said Michael Surratt.
'I look forward to working with all of the Mercator employees in my role
as President and CEO of Mercator' stated Bruce McLeod. 'The combination
of our cornerstone asset, the Mineral Park Mine along with our two
development projects, creates a platform with one of the best growth
profiles in our peer group.'
Transaction Highlights:
-- El Creston is an advanced development-stage moly-copper project
located in Sonora, Mexico with a recently completed preliminary
economic assessment demonstrating robust economics based on
US$15/lb Mo and US$2.60/lb Cu;
o After-tax NPV8% of US$561.9M and an IRR of 22.3%;
o Forecasted annual production of 23.9Mlbs of molybdenum and 15.9
Mlbs of copper over a 13 year mine life;
-- With the completion of the Mineral Park Phase II expansion, the
El Pilar copper project and the El Creston molybdenum/copper
project Mercator will become an intermediate copper-moly
producer with annual production of over 130M lbs of copper and
30M lbs of molybdenum by 2015;
-- Meaningful synergy through geographic proximity and the
integration of complementary expertise in exploration, mine
development and operations;
Corporate Update:
-- Mineral Park
o Production of 7.5M pounds of copper and 1.1M pounds of molybdenum
through the months of April and May;
o Mineral Park capacity expansion to 50,000 tons per day is expected
to be complete during the third quarter.
-- El Pilar
o Completed two, approximately 300-tonne crib tests to determine
run-of-mine ore leachability demonstrating copper recoveries of
67.9% and 63.7% over 120 days;
o Optimized bankable feasibility study to be completed this July.
-- El Creston
o Current exploration program, consisting of both infill and resource
expansion drilling, has yielded intercepts of 125 metres averaging
0.072% Mo and 132 metres averaging 0.068% Mo;
o Bankable feasibility study in progress.
The Board of Directors of Mercator would like to recognize and express
its gratitude to Mr. Surratt for his years of service to Mercator.
Under Mr. Surratt's leadership, Mercator has assembled one of the most
experienced operating teams in the industry, completed the acquisition
of a major copper development project in El Pilar and grown the Mineral
Park mine from a small copper heap leach operation in 2003 into one of
the largest new mines in North America. While Mr. Surratt has decided
to retire from the position of President and Chief Executive Officer,
the Board is pleased that he has agreed to continue on as technical
advisor to the President and Chief Executive Officer where his strong
operating experience will continue to benefit the operations at Mineral
Park as well as the development activities at Mercator's two Mexican
projects.
Concurrent with the closing of the acquisition of Creston, the Company
has entered into a loan agreement with unrelated third parties, to
provide a term loan in the amount of CDN$25 million. The term loan
matures on January 3, 2013 and carries an interest rate of 6.5% per
annum for the first six months, 7.0% for the second six months and,
thereafter, 8.0% per annum. Subject to payment of a prepayment fee,
the Company may prepay the term loan in whole or in part at any time at
the option of the Company and must prepay the term loan in the event of
any public debt or equity offering of the Company in the amount of the
net proceeds of any such offering.
NI-43-101 Qualified Persons
Gary Simmerman, BSc., Mercator's VP Engineering, a NI 43-101 Qualified
Person, supervised the preparation of and verified the Mineral Park
technical information contained in this release.
Mike Broch, BSc, Geology, Msc, Economic Geology, FAusIMM, Mercator's VP
Exploration, a NI 43-101 Qualified Person, supervised the preparation
of and verified the El Pilar technical information contained in this
release.
Dave Visagie, BSc. Geology, P. Geo, Creston's Exploration Manager, a NI
43-101 Qualified Person, supervised the preparation of and verified the
El Creston technical information contained in this release.
About Mercator Minerals Ltd.
Mercator Minerals Ltd. is a TSX listed mining company with an
experienced management team that has brought the mill expansion at the
Mineral Park Mine, one of the largest and most modern copper-moly
mining-milling operations in North America, to production in less than
2 years. Mercator management is dedicated to maximizing profits at the
Mineral Park Mine, the development of the El Pilar copper project in
Mexico and the exploration and development of the El Creston Property
in Sonora, Mexico, of which the Company holds a 100% interest.
On Behalf of the Board of Directors
MERCATOR MINERALS LTD.
Per: 'D. Bruce McLeod'
D. Bruce McLeod,
President
Cautionary Statements
The Toronto Stock Exchange does not accept responsibility for the
adequacy or accuracy of this press release.
None of the securities issued under the plan of arrangement have been or
will be registered under the Securities Act of 1933, as amended, or any
state securities laws, and such securities are anticipated to be issued
in the United States pursuant to exemptions from such registration
requirements. This press release shall not constitute an offer to sell
or solicitation of an offer to buy any securities in any jurisdiction
where such an offer or sale would be unlawful.
Information Concerning Mineralization and Resources
Unless otherwise indicated, all resource estimates contained in this
news release have been prepared in accordance with National Instrument
43-101 Standards of Disclosure for Mineral Projects and the Canadian
Institute of Mining, Metallurgy and Petroleum Classification System in
compliance with Canadian securities laws, which differ from the
requirements of United States securities laws. Without limiting the
foregoing, this news release uses the terms 'measured resources',
'indicated resources' and 'inferred resources'. United States investors
are advised that, while such terms are recognized and required by
Canadian securities laws, the United States Securities and Exchange
Commission ('SEC') does not recognize them. Under United States
standards, mineralization may not be classified as a 'reserve' unless
the determination has been made that the mineralization could be
economically and legally produced or extracted at the time the reserve
determination is made. United States investors are cautioned not to
assume that all or any part of measured or indicated resources will
ever be converted into reserves. Further, inferred resources have a
great amount of uncertainty as to their existence and as to whether
they can be mined legally or economically. It cannot be assumed that
all or any part of the inferred resources will ever be upgraded to a
higher category. Therefore, United States investors are also cautioned
not to assume that all or any part of the inferred resources exist, or
that they can be mined legally or economically. Disclosure of contained
ounces is permitted disclosure under Canadian regulations; however, the
SEC normally only permits issuers to report resources as in place
tonnage and grade without reference to unit measures. Accordingly,
information concerning descriptions of mineralization and resources
contained in this news release may not be comparable to information
made public by United States companies subject to the reporting and
disclosure requirements of the SEC.
Forward Looking Information
This news release contains forward looking statements of Mercator ,
being statements which are not historical facts, including, without
limitation, statements regarding the proposed acquisition of Creston by
Mercator, the potential benefits thereof, discussions of future plans,
projections and objectives, estimates, forecasts, and statements as to
management's expectations with respect to, among other things, the size
and quality of the Company's mineral reserves and mineral resources,
future production, capital and mine production costs, demand and market
outlook for commodities, and the financial results of the Company and
discussions of future plans, projections and objectives. In addition,
estimates of mineral reserves and mineral resources may constitute
forward looking statements to the extent they involve estimates of the
mineralization that will be encountered if a property is developed.
Important factors that may cause actual results to vary include, but
are not limited to, certain transactions, certain approvals, changes in
commodity and power prices, changes in interest and currency exchange
rates, inaccurate geological and metallurgical assumptions (including
with respect to the size, grade and recoverability of mineral reserves
and resources), unanticipated operational difficulties (including
failure of plant, equipment or processes to operate in accordance with
specifications, cost escalation, unavailability of materials and
equipment, delays in the receipt of government approvals, industrial
disturbances or other job action, and unanticipated events related to
health, safety and environmental matters), political risk, social
unrest, and changes in general economic conditions or conditions in the
financial markets. These risks are described in more detail in
Mercator's Annual Information Form. Mercator does not assume the
obligation to revise or update these forward-looking statements after
the date of this report or to revise them to reflect the occurrence of
future unanticipated events, except as may be required under applicable
securities laws. For a more complete discussion, please refer to the
Mercator's Annual Information Form and audited financial statements and
MD&A for the year ended December 31, 2010 on the SEDAR website at www.sedar.com.
This news release also contains forward looking statements of Creston.
Forward looking statements relate to future events or future
performance and include, but are not limited to, statements with
respect to the completion of the proposed transaction, estimation of
mineral reserves and resources, the realization of mineral reserve
estimates, the timing and amount of estimated future production, costs
of production, capital expenditures, success of mining operations,
environmental risks, unanticipated reclamation expenses, title disputes
or claims and limitations on insurance coverage. In certain cases,
forward-looking statements can be identified by the use of words such
as 'plans', 'expects' or 'does not expect', 'is expected', 'budget',
'scheduled', 'estimates', 'forecasts', 'intends', 'anticipates' or
'does not anticipate', or 'believes', or variations of such words and
phrases or statements that certain actions, events or results 'may',
'could', 'would', 'might' or 'will be taken', 'occur' or 'be achieved'
or the negative of these terms or comparable terminology.
Forward-looking statements reflect Creston management's expectations or
beliefs regarding future events and are based on the assumptions that
the proposed transaction will complete and that Creston's exploration
and development properties will achieve anticipated milestones and
results, and rely on Mercator's public disclosure regarding its mineral
projects. By their very nature, forward-looking statements involve
known and unknown risks, uncertainties and other factors which may
cause the actual events, results, performance or achievements of
Creston to be materially different from any future events, results,
performance or achievements expressed or implied by the forward-looking
statements. Such factors include, among others, risks related to
completion of the proposed transaction, actual results of current
exploration activities; changes in project parameters as plans continue
to be refined; future prices of resources; possible variations in ore
reserves, grade or recovery rates; accidents, labour disputes and other
risks of the mining industry; delays in obtaining governmental
approvals or financing or in the completion of development or
construction activities; as well as those factors detailed from time to
time in Creston's interim and annual financial statements and
management's discussion and analysis of those statements, all of which
are filed and available for review on SEDAR at www.sedar.com. Although Creston has attempted to identify important factors that
could cause actual actions, events or results to differ materially from
those described in forward-looking statements, there may be other
factors that cause actions, events or results not to be as anticipated,
estimated or intended. There can be no assurance that forward-looking
statements will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
statements. These forward-looking statements are made as of the date
of this news release and Creston does not intend, and does not assume
any obligation, to update these forward-looking statements, except as
required by applicable law. Accordingly, readers should not place undue
reliance on forward-looking statements.
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Bruce McLeod, President and CEO, Tel: 604 331-2254 or Marc LeBlanc, VP Corporate Development and Corporate Secretary, Tel: (604) 981-9661; Fax: (604) 960-9661; Email: mleblanc@mercatorminerals.com