VANCOUVER, Dec. 2 /PRNewswire-FirstCall/ -- Mercator Minerals Ltd. ("Mercator") is pleased to announce that its new 25,000 ton per day mill has started producing copper and molybdenum concentrates at its Mineral Park Mine in Arizona, less than two years from completion of its December 29, 2006 Technical Report.
"In less than two years from completion of pre feasibility, Mercator has financed, engineered, procured equipment, and constructed one of the largest and certainly the most modern mill in North America," said Mike Surratt, President & CEO. "It is a real tribute to our operating team, contractors and suppliers that this large scale project was completed in such a short time, in a period of high demand for equipment, goods and services across the mining industry," Surratt added.
Construction of the Phase 1 mill and major components of the Phase 2 expansion commenced in April 2007. Phase 1 of the mill is now complete and is producing copper and molybdenum concentrates. Phase 1 is designed to process at least 25,000 tons per day of ore. The crushing and conveying system, previously considered a potential restriction to throughput, over the past month has operated at rates of more than 50% above design capacity, suggesting that higher than design throughputs may be achievable even before the Phase 2 mill expansion is completed. In addition, approximately 70% of the Phase 2 mill expansion, has been completed, including the second SAG mill foundations and mill reconditioning, reclaim tunnel, ball mill base foundations, cleaner copper circuit, moly circuit, tailings embankment, tailings thickener tank, and water wells.
"Although metal prices have been under a lot of pressure of late, they are still in line with the prices that were used in our technical study economics that were done before the run up in metal prices," said Mike Surratt. "The robust economics for the Mineral Park mine are driven by a number of factors, including lower capital for a brown field project (with significant infrastructure already in place), an exceptionally low strip ratio (0.18 tons of waste for each ton of ore), short haul distances, excellent mining conditions, and an SX-EW facility that has been producing copper and cash flow throughout the entire design and construction period."
Some of the highlights of the December 29, 2006 Technical Report previously announced on January 8, 2007, are set out below (all amounts in US$):
- Life-of-mine average metal prices used in the economic model: $1.53 per pound of copper, $10.16 per pound of molybdenum, $7.50 per oz of silver; - Metal prices used in the reserve model were $1.40 per pound of copper, $7.50 per pound of molybdenum and $7.50 per ounce of silver; - $426 million after-tax net present value at an 8% discount rate; - 51% internal rate of return (IRR), after-tax; - 25 year mine life; - Production averaging 56.4 million pounds of copper, 10.3 million lbs of molybdenum and 0.6 million ounces of silver over the first 10 years of operation; - Strip ratio of only 0.18 tons of waste for 1 ton of ore; - Two stage development with Phase 1 mill throughput of 25,000 tpd of ore and a Phase 2 expansion to 50,000 tpd; - Average of $55 million in operating cash flow per year, after taxes, over the first 10 years of operations at these assumed metal prices; - Proven and probable mill reserves of 437 million tons at a copper equivalent grade of 0.368%, of which 82% is proven, and an additional proven leach reserve of 82.5 million tons at an average grade of 0.07% copper; - Life-of-mine production of 1.1 billion lbs of copper, 257.5 million lbs of molybdenum and 13.7 million ounces of silver;
Mercator Minerals is a TSX listed mining company with only 74.8 million shares issued and an experienced management team that has brought one of the largest and most modern mining projects in North America to production in less than 2 years. Mercator management is dedicated to maximizing profits by making its Mineral Park Mine one of the lowest cost operations in the industry.
Gary Simmerman, P.Eng., Mercator's VP Engineering, a Qualified Person as defined by NI43-101, supervised the preparation of and verified the technical information contained in this release.
Mercator Minerals Ltd.
Mercator is a copper producer that owns and operates the Mineral Park copper/molybdenum mine, 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, President
This press release contains certain forward-looking statements, which include 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. These forward-looking statements involve numerous assumptions, risks and uncertainties and actual results may vary.
Factors that may cause actual results to vary include, but are not limited to, 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 the Annual Information Form of the Company. The Company 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 Company's audited financial statements and MD&A for the year ended December 31, 2007 on the SEDAR website at http://www.sedar.com/.
The Toronto Stock Exchange does not accept responsibility for the
adequacy or accuracy of this press release.
