TRADING SYMBOL: TSX - ML
VANCOUVER, June 12 /CNW/ - Mercator Minerals Ltd. ("Mercator") is pleased
to announce today that its wholly-owned affiliate has closed the previously
announced 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's affiliate has made an up-front payment of US$42 million in cash to
Mercator's affiliate. Upon delivery of the silver, Silver Wheaton's affiliate
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 production).
Commenting on the closing, 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."
Surratt also stated: "It was a pleasure dealing with the Silver Wheaton
team and we look forward to a long term relationship with them."
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
Additionally, the Company has declared and will be making a special pro
rata payment to the Noteholders equal to 1% of the issued and outstanding
principal amount of Notes on June 26, 2008, to Noteholders of record on June
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, payments of funds 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 are 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: email@example.com