Mercator Minerals announces intention to offer to acquire Tyler Resources


    VANCOUVER, Oct. 19 /CNW/ - Mercator Minerals Ltd. ("Mercator") (TSX: ML)
today announced that it intends to make an offer to acquire all of the
outstanding shares of Tyler Resources Inc. ("Tyler") (TSX-V: TYS) in exchange
for shares of Mercator equal to a total consideration of C$1.00 per Tyler
share. Under the offer, Tyler shareholders would receive 0.113 of a Mercator
share for each Tyler share based on Mercator's volume weighted average share
price of C$8.84 on the TSX for the 20 trading days ended October 18, 2007. The
share consideration represents a premium of approximately 35% over Tyler's
closing share price on October 18, 2007 and over Tyler's volume weighted
average share price on the TSX-V for the 20 trading days ended October 18,
    Commenting on the transaction, Mike Surratt, President and Chief
Executive Officer of Mercator said "The strong merits of the proposed
transaction compelled us to announce our intended offer to the shareholders of
Tyler. The combination of Mercator and Tyler makes sense from a strategic and
geographic perspective and we believe that the proposed combination is a
creative way to unlock value for all shareholders involved. Despite
considerable development, mining, and mineral processing risk, we believe
Tyler's Bahuerachi project is an excellent complement to Mercator and one that
we believe our mining and mineral processing teams can see through to
production. We plan to accelerate Bahuerachi to feasibility and bring it on
stream very early in the next decade. Our offer would give Tyler shareholders
an immediate lift, and the opportunity to participate in the upside with an
aggressive, growing mid-tier base metal producer."
    The combined company would offer a solid foundation of Mercator's
operating SX/EW copper mine with expanding near term copper and molybdenum
production and Tyler's pipeline of development and exploration projects.

    Highlights and Strategic Benefits

    Well structured and financed
    -   The combined company would have approximately 89 million basic shares
        issued and approximately 100 million fully diluted shares
        outstanding, assuming Mercator acquires all of the outstanding shares
        of Tyler under the offer and assuming the conversion or exercise only
        of the currently outstanding options, warrants or other convertible
        securities of Tyler that have a conversion or exercise price lower
        than C$1.00 per share
    -   Mercator has a cash balance of approximately US$130.0 million as at
        June 30, 2007 and Tyler had a cash balance of approximately
        C$9.8 million as at April 30, 2007
    -   Current Mercator cash flow from operations of approximately
        US$2.2 million per month
    -   Mercator expects to finance most of the Bahuerachi project from free
        cash flow produced from the Mineral Park mine

    Production growth through to 2009
    -   2007 SX/EW copper production estimated to be approximately 12 million
        pounds from Mercator's Mineral Park mine
    -   Copper - molybdenum expansion project underway at Mercator's Mineral
        Park mine
    -   Full capacity at Mineral Park expected to be reached in 2009;
        estimated average annual production over the first 10 years from
        Mineral Park of approximately 56.4 million pounds of copper,
        10.3 million pounds of molybdenum and 600,000 ounces of silver, based
        on Mercator's Technical Report dated December 29, 2006

    Attractive resource base to underpin future growth
        Mineral Park (as at December 2006)
        Proven reserves of approximately 430.7 million tons grading 0.14%
        copper, 0.040% molybdenum and 0.08 oz per ton silver, and probable
        reserves of approximately 89.7 million tons grading 0.11% copper,
        0.036% molybdenum and 0.07 oz/ton silver, using long term commodity
        prices of US$1.40 per pound copper, US$7.50 per pound molybdenum and
        US$7.50 per ounce silver, for a total of 520 million tons of proven
        and probable reserves, with contained metal of more than:
        -  1.36 billion pounds of copper, from mill reserves and heap leach
        -  343 million pounds of molybdenum, from mill reserves
        -  35 million ounces of silver, from mill reserves

        Bahuerachi Preliminary Economic Assessment (PEA) completed in
        September 2007
        In Tyler's press release dated September 27, 2007, Tyler reported
        that "(t)he total tonnage and grade of the resource base included in
        the PEA at this time consisted of 238,317,000 tonnes of measured and
        indicated resources (91%), and 12,254,000 tonnes of Inferred
        resources (9%) at an average grade of 0.425% copper, 0.926% zinc,
        0.0081% molybdenum, 0.04 g/t gold and 4.95 g/t silver", with metal
        contained in concentrates of approximately (as described in the
        "Technical Report Summary, Bahuerachi Project, Preliminary Economic
        Assessment Report, Chihuahua State, Mexico" prepared by Independent
        Mining Consultants, Inc. dated September 2007 disclosed on Tyler's
        website) (note: information as to the breakdown of applicable grades
        for each of the resource categories separately is not available in
        the press release or the technical report summary):
        -  2.11 billion pounds of copper
        -  163,000 ounces of gold
        -  31.9 million ounces of silver
        -  26.8 million pounds of molybdenum
        -  3.58 billion pounds of zinc

        Bahuerachi, prior to the PEA
        In Tyler's press release dated May 23, 2007, Tyler reported
        524 million tonnes of measured and indicated resources grading 0.4%
        copper, 0.55% zinc, 0.008% molybdenum, 4.03 g/t Ag and 0.03 g/t Au,
        with a 0.2% copper cutoff grade, with contained metal of
        -  4.56 billion pounds of copper
        -  6.30 billion pounds of zinc
        -  96.2 million pounds of molybdenum
        -  68.0 million ounces of silver
        -  551,000 ounces of gold

    Experienced management to build the projects, continue exploration at
    -   Mercator brings strong mine development, mine financing, and
        construction expertise, having successfully started and raised over
        C$145 million to expand Mineral Park
    -   Strong expected cash flows from Mercator and pro-forma financial
        strength to enable the build-out of Tyler's Bahuerachi project
    -   Tyler has identified substantial potential in the Bahuerachi area,
        providing the opportunity for more discoveries

    Mercator Expansion of Moly-Copper Operations, Construction Underway

    -   50,000 tpd two phase expansion at Mineral Park will add milling
        copper - moly ore to the SX/EW copper output
    -   Phase One expected to be complete in Q2, 2008 is expected to bring
        milling ore to 25,000 tpd
    -   Phase Two expected to be complete in Q1, 2009 is expected to bring
        milling ore to 50,000 tpd
    -   Estimated project after tax NPV at an 8% discount rate of
        US$428 million using conservative long term prices of US$1.53 per
        pound copper, US$10.16 per pound molybdenum and US$7.50 per ounce
        silver, based on Mercator's Technical Report dated December 29, 2006
    -   Expected mine life - 25 years
    -   Expansion expected to be fully financed by combining Mercator's
        current cash on hand of US$130 million with cash flow from operations

    Bahuerachi PEA

    -   In Tyler's press release dated September 27, 2007, Tyler reported
        that "(a)t conservative Base-Case long term metal price assumptions
        of US $1.50/lb copper, $0.80/lb zinc, $15.00/lb molybdenum,
        $500.00/Oz gold and $10.00/Oz silver, the project has been estimated
        to be able to produce on a life-of-mine ("LOM") basis a yearly
        average of 183.76 million pounds of copper, 311.26 million pounds of
        zinc, 2.33 million pounds of molybdenum, 2.77 million ounces of
        silver and 14,180 ounces of gold for 12 years on the assumption of a
        60,000 tonne per day milling operation. Total capital costs on a LOM
        basis have been estimated at US$619.25 million, with a Base-Case
        capital payback period occurring during production year 4. Using
        August 2007 three year backward average metal prices of US$2.43/Lb
        copper, $1.10/lb zinc, $30.85 molybdenum, $10.00/Oz silver and
        $544/Oz gold, capital payback period would occur during production
        year 2."

    Additional Details of the Offer

    Mercator expects to mail a formal offer and take over bid circular to the
shareholders of Tyler in accordance with applicable securities laws. The
formal offer and takeover bid circular will include full details regarding the
Tyler offer, including a complete description of the conditions to the offer.
The offer is expected to remain open for acceptance for 35 days following the
mailing date.
    To complete the transaction, Mercator would issue approximately
15 million new common shares to Tyler shareholders, assuming all of the
outstanding shares of Tyler are tendered to the offer and assuming the
conversion or exercise only of the currently outstanding options, warrants or
other convertible securities of Tyler that have a conversion or exercise price
lower than C$1.00 per share. On an issued basis, the pro rata shareholdings
are anticipated to be approximately: 84% existing Mercator shareholders, 16%
existing Tyler shareholders.
    No Mercator shares will be delivered in the United States or to or for
the account or for the benefit of a person in the United States, unless
Mercator is satisfied that such Mercator shares may be delivered in the
relevant jurisdiction in reliance upon available exemptions from the
registration requirements of the U.S. Securities Act of 1933, as amended, and
the securities laws of the relevant U.S. state or other local jurisdiction, or
on a basis otherwise determined to be acceptable to Mercator in its sole
discretion. Ineligible Tyler shareholders who would otherwise receive Mercator
shares in exchange for their Tyler shares may, at the sole discretion of
Mercator, have such Mercator shares issued on their behalf to a selling agent,
which shall, as agent for such Tyler shareholders, sell such Mercator shares
on their behalf over the facilities of the TSX and have the net proceeds of
such sale, less any applicable withholding taxes, delivered to such Tyler
    The offer will be subject to a number of conditions, including without
limitation absence of adverse material changes, receipt of all necessary
regulatory approvals and a minimum of 66 2/3% of Tyler shares being tendered.

    Investor and Analyst Conference Call

    The investment community is invited to participate in Mercator's
conference call as follows:

    Friday, October 19, 2007 at 11 a.m. (PDT)
    Toll Free (North America): (866) 249-1964
    Local/International: (604) 677-8677

    The presentation that corresponds with the conference call is available
via the Internet by visiting

    The conference call and all questions and answers will be recorded and
made available until October 26, 2007. To listen to the recording, call (877)
289-8525 or (416) 640-1917 and enter pass code 21250979 followed by the number
    The conference call will be web cast live as well as for on-demand
listening at the
Company's website. Listeners may access the call through the "conference
calls" link in the investor relations section of the site.

    About Mercator Minerals Ltd.

    Mercator is a copper producer that owns and operates the Mineral Park
copper 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. The Company has filed a technical report
supporting the expansion of increased copper production plus molybdenum and
silver production. Jim Tompkins, P.Eng., Mercator's independent mining
engineer, a Qualified Person as defined by National Instrument 43-101,
supervised the preparation of and verified the Mercator technical information
contained in this release.

    About Tyler Resources Inc.

    Tyler is a Canadian junior exploration company focused on base and
precious metals exploration in Mexico. Tyler's primary project is the
Bahuerachi property in Northwestern Mexico, in the state of Chihuahua. As part
of its ongoing drill program, Tyler has now drilled in excess of 51,000 meters
of combined diamond and reverse circulation drilling since 2004.

    On Behalf of the Board of Directors


    Per: "Michael L. Surratt"
    Michael L. Surratt, President

    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.

    Information Concerning Tyler

    Except as otherwise indicated, information concerning Tyler contained in
this news release has been taken from or is based upon publicly available
documents and records on file with the Canadian securities regulatory
authorities and other public sources. Tyler has not reviewed this news release
and has not confirmed the accuracy and completeness of the information in
respect of Tyler contained herein. Although Mercator has no knowledge that
would indicate that any statements contained herein concerning Tyler taken
from or based upon such documents and records are untrue or incomplete,
neither Mercator nor any of its directors or officers assumes any
responsibility for the accuracy or completeness of such information, including
any of Tyler's financial statements, or for any failure by Tyler to disclose
events or facts which may have occurred or which may affect the significance
or accuracy of any such information but which are unknown to Tyler.
    In Tyler's September 27, 2007 press release, Tyler advised that "(a) copy
of the (Independent Mining Consultants) PEA executive summary will be
available on the Tyler website shortly outlining the details of the pricing
and cost assumptions inputs, calculations, metal recovery assumptions and
mining phases used in this first economic evaluation of the Bahuerachi
Deposit's potential. A full report of the PEA study as per the requirements of
National Instrument 43-101 is expected to be filed on SEDAR within 45 days."
Tyler further advised that "(t)he PEA study was based on the latest resource
calculation as released by Tyler in May 2007. The minimum required for the
reclassification of mineral resources to the reserve category being the
completion of a pre-feasibility level study, the reader is cautioned that
under National Instrument 43-101, the mineral resources that are not mineral
reserves are not considered to have demonstrated economic viability. The
purpose of the PEA is to perform an economic analysis of the potential
viability of a mineral resource taken at an early stage of the project, prior
to the completion of a preliminary feasibility study."

    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 Tyler by Mercator, the
potential benefits thereof and discussions of future plans, projections and
objectives. In addition, estimates of mineral reserves and resources may
constitute forward looking statements to the extent they involve estimates of
the mineralization that will be encountered if a property is developed. This
news release also contains forward looking statements of Tyler, which are
derived from publicly available documents. 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 or Tyler's
expectation are in the documents filed by Mercator and Tyler, respectively,
from time to time with the Toronto Stock Exchange, the TSX Venture Exchange
and provincial securities regulators, most of which are available at Mercator disclaims any intention or obligation to revise or
update such statements.
    The following factors, among others, related to the proposed acquisition
of Tyler, the potential benefits thereof and future plans, projections and
objectives could cause actual results of developments to differ materially
from the results or developments expressed or implied by forward looking
statements: the Mercator shares issued in connection with the offer may have a
market value lower than expected; the businesses of Mercator and Tyler may not
be integrated successfully or such integration may be more difficult,
time-consuming or costly than expected; the expected combination benefits from
the acquisition of Tyler may not be fully realized by Mercator or may not be
realized within the expected time frame; Mercator cannot determine the number
of Tyler shareholders who may accept the Tyler offer; Mercator may not acquire
one-hundred percent of the shares of Tyler; and the possible delay in the
completion of the steps required to be taken for the acquisition of Tyler and
the ultimate combination of Mercator and Tyler.

    Notice to U.S. Shareholders of Tyler

    The offer, if and when made, will be made for the securities of a
Canadian issuer and by a Canadian issuer that is permitted to prepare the
offer and circular in accordance with the disclosure requirements of Canada.
Shareholders should be aware that such requirements are different from those
of the United States. The financial statements to be included or incorporated
by reference in the offer and circular will be prepared in accordance with
Canadian generally accepted accounting principles, and may be subject to
Canadian auditing and auditor independence standards, and thus may not be
comparable to financial statements of United States companies.
    The enforcement by shareholders of civil liabilities under the United
States federal securities laws may be affected adversely by the fact that
Mercator is incorporated under the laws of Canada, that some or all of its
officers and directors may be residents of jurisdictions outside the United
States, that some or all of the dealer managers for the offer and some or all
of the experts named in the offer and circular may be residents of
jurisdictions outside the United States and that all or a substantial portion
of the assets of Mercator and said persons may be located outside the United
    You should be aware Mercator may purchase securities otherwise than under
the offer, such as in open market or privately negotiated purchases.

    The Toronto Stock Exchange does not accept responsibility for the
    adequacy or accuracy of this press release.

For further information:

For further information: MERCATOR MINERALS LTD., Marc LeBlanc, VP
Corporate Development & Corporate Secretary, Tel: (604) 981-9661 or (604)
716-5582, Fax: (604) 960-9661, Email:

Organization Profile

Mercator Minerals Ltd.

More on this organization

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890