TRADING SYMBOL: TSX - ML
VANCOUVER, March 17 /CNW/ - Mercator Minerals Ltd. ("Mercator") is
pleased to announce today that it and its wholly-owned affiliate have signed
an agreement with an affiliate ("Silver Wheaton") of Silver Wheaton Corp. for
the sale of the life-of-mine silver production from Mercator's Mineral Park
copper/molybdenum mine in Arizona. Under the agreement, Silver Wheaton will
make an up-front payment of US$42 million in cash to Mercator's affiliate.
Upon delivery of the silver, Silver Wheaton will then also pay Mercator's
affiliate in cash the lesser of the silver spot price or US$3.90 per ounce of
silver (escalated by 1% per annum starting in the fourth year of silver
The up-front payment will be used for the completion of the second phase
of the Mineral Park mill expansion to a 50,000 ton-per-day milling operation
with production of copper and molybdenum concentrates expected, as previously
disclosed, to average 56.4 million pounds of copper, 10.3 million lbs of
molybdenum and 0.6 million ounces of silver per year over the first 10 years
Commenting on the announcement, Michael L. Surratt, President and Chief
Executive Officer of Mercator, said: "We are delighted to have completed this
important transaction with Silver Wheaton. Silver at Mineral Park is a
by-product of the copper and molybdenum operation, and represents less than 2%
of our payable revenue at Mineral Park. By monetizing most of our silver
revenue now, we will obtain funds that can be used to pay for the second stage
of the construction of the Mineral Park milling facilities, expected to
increase the operation to 50,000 tons per day. By having the funds now rather
than waiting on phase one cash flow, we can save money completing many
construction activities now while we have construction workers on site, rather
than needing to remobilize after phase one. In addition, we will have the
opportunity to accelerate phase two equipment deliveries. Every day we can
speed up Phase Two is very important to our bottom line."
The transaction and the up-front payment of US$42 million are subject to
completion of documentation, normal to this type of transaction and the
receipt of all necessary approvals of the holders of Mercator's secured notes.
Mercator Minerals Ltd.
Mercator is a copper producer that owns and operates the Mineral Park
copper/molybdenum mine in Arizona, with a corporate strategy focused on
maximizing the production potential of the Mineral Park copper-molybdenum
deposit and growing through mergers and acquisitions. Mercator is in an
advanced stage of construction of the molybdenum-copper expansion at Mineral
Park. At full capacity, the Mineral Park mine average annual production during
the first 10 years is forecast to be approximately 56.4 million pounds of
copper, 10.3 million pounds of molybdenum and 0.6 million ounces of silver.
On Behalf of the Board of Directors
MERCATOR MINERALS LTD.
Per: "Michael L. Surratt"
Michael L. Surratt,
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 completion of the transaction with Silver Wheaton,
the potential benefits thereof and discussions of future plans, projections,
objectives and expected operating results. There can be no assurance that such
statements will prove accurate. Such statements are necessarily based upon a
number of estimates and assumptions that are subject to numerous risks and
uncertainties that could cause actual results and future events to differ
materially from those anticipated or projected. Important factors that could
cause actual results to differ materially from Mercator's expectation include
the failure to obtain the necessary noteholder approvals and are otherwise
described in the documents filed by Mercator from time to time with the
Toronto Stock Exchange and provincial securities regulators, most of which are
available at www.sedar.com. Mercator disclaims any intention or obligation to
revise or update such statements.
The Toronto Stock Exchange does not accept responsibility for the
adequacy or accuracy of this press release.
For further information:
For further information: Marc LeBlanc, VP Corporate Development and
Corporate Secretary, Tel: (604) 981-9661 or (604) 716-5582, Fax: (604)
960-9661, Email: firstname.lastname@example.org.