Vancouver, British Columbia: June 22, 2011 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 (Mercators 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 Crestons 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 Parks 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., Mercators 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, Mercators 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, Crestons 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
