News Feed Item

Mercator Minerals Reports First Quarter 2014 Results

(All $ amounts in US$ unless otherwise specified)

VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 05/13/14 -- Mercator Minerals Ltd (TSX: ML) ("Mercator" or the "Company") today announced its financial and operating results for the three months ended March 31, 2014. For Q1 2014 the Company produced 16.2 million copper equivalent(ii) pounds, comprised of 7.2 million pounds of copper in concentrates and copper cathode, 2.2 million pounds of molybdenum in concentrates and 89 thousand ounces of silver. For Q1 2014, the Company generated revenues of $41.3 million, incurred an operating loss of $12.8 million and a net loss of $2.4 million (loss of $0.01 per share, basic) or an adjusted net loss(i) of $16.8 million ($0.05 per share).

D. Bruce McLeod, President and CEO of Mercator comments, "Since receipt the bridge loan proceeds commencing in late December 2013, improved working capital levels have allowed operations at Mineral Park to gradually return towards normalized levels. April 2014 mining rates were 83,800 tons per day, or a 44% increase since the start of the year, while April 2014 mill throughput rates averaged 41,470 tons per day, or a 32% increase since the beginning of 2014. As a result of the operational improvements, unit costs are also improving, and when combined with recent improvements in copper and molybdenum prices, the outlook for Mineral Park has improved significantly."


--  Recoveries of 80.1% and 82.5%, for copper and molybdenum, respectively,
    which continue to be above mill design rates.
--  Average mill throughput of 35,984 tons per day ("tpd") was impacted by
    harder than expected ore mined, which had an average ore grind index of
    13.5 kilowatt hour per ton ("kwh/t"), or 9% harder when compared to Q1
--  Production was negatively impacted by a number of operating and
    financial constraints (see "Mineral Park Mine" discussion below), which
    resulted in lower equipment availability and lower working capital
    levels. Throughput rates and production levels are gradually returning
    towards normalized levels with the improvements funded by the draw downs
    of proceeds from the bridge loan agreement entered into with Daselina
    Investments Ltd. ("Daselina") in December 2013.
--  Copper prices realized were negatively impacted by a mark-to-market
    provision of $1.5 million (or $0.23 per pound) adjustment for final
    settlements on copper concentrates sold.


                                                 Three months ended
 $ millions unless otherwise noted                        March 31,
                                                   2014        2013
Revenues                                           41.3        54.5
Operating loss                                   (12.8)       (1.9)
Net (loss) / income                               (2.4)         1.8
(Loss) / income per share (basic)                (0.01)        0.01
Adjusted net loss(i)                             (16.8)       (9.0)
Adjusted loss per share(i) (basic)               (0.05)      (0.03)
Cash flow (used in)/from operations               (9.8)         0.2
Production (million pounds)
 - Copper                                           7.2         9.1
 - Molybdenum                                       2.2         2.4
 - Copper equivalent(ii)                           16.2        20.4
Total tons mined (millions)                         5.7         7.2
Throughput (tons per day)                        35,984      42,738
Ore grind index (kwh/t)                            13.5        12.4
Recoveries (%)
 - Copper                                          80.1        82.5
 - Molybdenum                                      82.5        82.3
On-site operating costs ($/ton milled)            12.76       11.17
Cash costs(i) on a co-product basis ($/lb)
 - Copper                                          3.38        2.72
 - Molybdenum                                     11.58       11.08
Average realized prices ($/lb)
 - Copper (excluding hedges)                       2.90        3.58
 - Molybdenum                                     10.29       11.04
Shipments (million pounds)
 - Copper                                           6.6         7.9
 - Molybdenum                                       2.1         2.3

Comparing Q1 2014 to Q1 2013

Revenues were 24% lower in Q1 2014 than in Q1 2013, primarily due to lower metal prices (copper and molybdenum prices realized were 19% and 7% lower, respectively, as compared to the prior period) and lower shipment volumes (copper and molybdenum shipments were 16% and 9% lower, respectively, as compared to the prior period). The lower realized prices were consistent with lower benchmark prices, while the realized price for copper was also impacted by a mark-to-market provision of $1.5 million (or $0.23 per pound) adjustment for final settlements on copper concentrates sold. The lower shipment volumes were a result of lower production volumes. On-site operating costs were 14% higher in Q1 2014 than in Q1 2013 which, when combined with lower production volumes, resulted in cash costs(i) of production, on a co-product accounting basis, being 24% higher for copper and 5% higher for molybdenum. The higher costs were primarily a result of lower throughput rates, operating challenges and financial constraints that were experienced commencing in the second half of 2013 and into Q1 2014. During Q1 2014, production was impacted by financial constraints causing sub-optimal operating conditions and mining operations being conducted primarily in harder ore sections of the pit, all of which resulted in lower average throughput and lower recovery rates when comparing Q1 2014 to Q1 2013 (see Mineral Park Mine discussion below). As a result of the above noted operating factors and market conditions, the operating loss was $12.8 million in Q1 2014, as compared to an operating loss of $1.9 million in Q1 2013.

Mineral Park Mine

For Q1 2014, Mineral Park Mine ("Mineral Park") produced 7.2 million pounds of copper in concentrates and copper cathode and 2.2 million pounds of molybdenum in concentrates. Production during Q1 2014 at Mineral Park was impacted by a number of factors that were previously disclosed in Q4 2013, including, but not limited to, mining through harder sections of the mineral deposit and financial constraints at Mineral Park, resulting in lower equipment availability, all of which lowered throughput rates by 16% to 35,984 tpd in Q1 2014 when compared to Q1 2013. Metal recovery rates in Q1 2014 were 80.1% and 82.5% for copper and molybdenum, respectively, which were above mill design recovery rates of 80.0% for copper and 75.0% for molybdenum. Ore grades mined in Q1 2014 for copper and molybdenum were 0.13% and 0.041%, respectively as compared to ore grades in Q1 2013 of 0.13% for copper and 0.038% for molybdenum.

Given the financial constraints at Mineral Park, significant emphasis in the quarter was placed on prudently managing working capital levels. Lower working capital levels negatively impacted production levels in the second half of 2013 and into Q1 2014 as the focus has been to pay suppliers in a timely manner and to lower spare part inventory levels. The lower spare part inventory levels caused increased downtime due to lower mining and milling equipment availability and lower levels of grinding media, reagents and lower blasting materials available.

Since receiving funds under the bridge loan agreement entered into in December 2013, throughput rates, equipment availability and production levels through Q1 2014 are gradually returning towards normalized levels.

Intergeo Transaction Update

As announced on December 12, 2013, Mercator entered into an arrangement agreement ("Arrangement") with Intergeo MMC Ltd ("Intergeo") pursuant to which the parties will effect a business combination. As part of the transaction, Daselina, Intergeo's largest shareholder, has agreed to invest $100.0 million, including any bridge loan proceeds, by way of a private placement in the new combined company, which is to be called Intergeo Mining Ltd. Also on December 12, 2013, Mercator announced that Mineral Park's lenders have agreed to an amended and restated credit facility enhancing the Company's financial flexibility.

Since the announcement of the Arrangement, the Company has:

--  Received shareholder approval of the Arrangement (see April 7, 2014
    press release);
--  Received Supreme Court of British Columbia and all necessary Canadian
    and US governmental regulatory approvals, and has responded to a request
    for information regarding the terms and conditions of the Arrangement
    from the Russian Federal Anti-Monopoly Services ("FAS"), the federal
    executive body responsible for foreign investments in the Russian
    Federation (see April 17, 2014 press release);
--  Agreed with Intergeo and Daselina for additional interim funding by up
    to an additional $4.0 million under the bridge loan agreements with
    Daselina and to extend the completion deadline up to August 1, 2014. The
    extension of the completion deadline provides FAS with additional time
    to complete its review of the response provided by Mercator and Intergeo
    to its request for additional information regarding the terms and
    conditions of the Arrangement (see April 29, 2014 press release); and
--  Received $12.0 million of bridge loan financing from Daselina.

Completion of the Arrangement remains subject to final acceptance by the Toronto Stock Exchange ("TSX") and the satisfaction or waiver of all remaining conditions precedent, all of which are expected on a timely basis.

Due to the ongoing nature of the Intergeo Transaction, Mercator management will not be hosting a webcast/conference call to discuss Q1 2014 operating and financial results.

Financial Statements and Management Discussion & Analysis (MD&A)

This press release should be read in conjunction with the MD&A and Financial Statements for the three months ended March 31, 2014. These documents will be posted on SEDAR (sedar.com) under the Company's profile and on the Company's website (mercatorminerals.com).

(i) Alternative Performance Measures

This press release refers to "cash costs" and "adjusted loss" which are not performance measures recognized as having a standardized meaning under IFRS. The Company discloses these performance measures, which have been derived from the financial statements on a consistent basis, because the Company believes they are of assistance in understanding the results of Mercator's operations and financial position, and are meant to provide further information about the Company's financial results to the investors. These performance measures may not be comparable to similar data presented by other mining companies. This information should not be considered in isolation or as a substitute for measure of performance prepared in accordance with IFRS. Readers should refer to "Alternative Performance Measures" section in the March 31, 2014 MD&A for additional information.

(ii) Copper equivalent production

All references to copper equivalent production for 2013 are calculated using a molybdenum/copper ratio of 4.65, based on the Company's beginning of year estimated 2013 metals prices, including adjustments for copper hedging. All references to copper equivalent production for 2014 are calculated using a molybdenum/copper ratio of 4.15, based on the Company's beginning of year estimated 2014 metals prices, including adjustments for copper hedging.

Quality Assurance/Quality Control

The Technical Information contained in this press release has been prepared under the supervision of, and its disclosure has been reviewed by, Gary Simmerman, BSC, Mining Eng., FAusIMM, a consultant to Mercator, a Qualified Person under NI 43-101.

About Mercator Minerals Ltd.

Mercator Minerals Ltd., a TSX listed base metals mining company, operates the wholly-owned copper/molybdenum/silver Mineral Park Mine in Arizona, USA. Mercator also wholly-owns two development projects in Sonora, Mexico: the copper heap leach El Pilar project and the molybdenum/copper El Creston project.

For further information please visit www.mercatorminerals.com.

On Behalf of the Board of Directors


D. Bruce McLeod, P.Eng, President and CEO

National Instrument 43-101 Compliance

Unless otherwise indicated, Mercator has prepared the technical information in this press release ("Technical Information") based on information contained in the current technical reports, annual information form, press releases, material change reports and quarterly and annual consolidated financial statements and management discussion and analysis (collectively the "Disclosure Documents") available under Mercator Minerals Ltd.'s company profile on SEDAR at www.sedar.com. Each Disclosure Document was prepared by or under the supervision of a qualified person (a "Qualified Person") as defined in National Instrument 43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities Administration ("NI 43-101"). Readers are encouraged to review the full text of the Disclosure Documents which qualifies the Technical Information. Readers are advised that mineral resources that are not mineral reserves do not have demonstrated economic viability. The Disclosure Documents are each intended to be read as a whole, and sections should not be read or relied upon out of context. The Technical Information is subject to the assumptions and qualifications contained in the Disclosure Documents.

Forward-Looking Information

This press release contains certain forward-looking information within the meaning of Canadian securities legislation and forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to future events or future performance and reflect the expectations or believes regarding future events of management of Mercator. When used in this document, the words "anticipates", "may", "can", "believes", "expects", "projects", "intends", "likely", "will", "to be" or the negative of these terms and any similar expressions and any other statements that are not historical facts, in each case as they relate to Mercator, the Intergeo Transaction or the combined company are intended to identify those assertions as forward-looking information and statements. In making such statements, the Company believes that its expectations are based on reasonable assumptions. However, any such statement may be influenced by factors that could cause actual outcomes and results to be materially different from those projected or anticipated. This information and these statements, referred to herein as "forward-looking statements", are not historical facts, are made as of the date of this press release and include without limitation, statements regarding discussions of future plans, guidance, projections, objectives, estimates and forecasts and statements as to management's expectations with respect to, among other things, the receipt of any and all necessary regulatory approvals, third party consents and authorizations may constitute forward looking statements. These forward-looking statements involve numerous risks and uncertainties and actual results may vary. Important factors that may cause actual results to vary include without limitation, certain transactions, the successful completion of the Intergeo Transaction, and the ability to meet obligations under certain credit facilities and other debt instruments, the timing and receipt of certain approvals, changes in commodity and power prices, changes in interest and currency exchange rates, risks inherent in exploration results, timing and success, 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, equipment and third-party contractors, 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. In making the forward-looking statements in this press release, the Company has applied several material assumptions, including without limitation, the assumptions that: (1) the receipt of necessary consents and approvals and satisfaction of all conditions precedent for the completion of the Intergeo Transaction in a timely manner; (2) market fundamentals will result in sustained copper, molybdenum and nickel demand and prices; (3) the current copper leach operations at Mineral Park remain viable, operationally and economically; (4) the milling operations at Mineral Park will continue to be viable, operationally and economically; (5) the receipt of any necessary approvals and consents in connection with the development of any new properties; (6) the availability of financing on suitable terms for the development, construction and continued operation of any mineral properties; (7) the presence of and continuity of metals at Mineral Park and at the Company's other properties at modelled grades; (8) the capacities of various machinery and equipment; (9) the availability of personnel, machinery and equipment at estimated prices; (10) exchange rates; (11) tax rates applicable to the mining operations; (12) cash costs; (13) anticipated mining profits; (14) metals recovery rates; (15) reasonable contingency requirements; and (16) sustained commodity prices such that any properties in or put into operation remain economically viable. Information concerning mineral reserve and mineral resource estimates also may be considered forward-looking statements, as such information constitutes a prediction of what mineralization might be found to be present if and when a project is actually developed. Certain of the risks and assumptions are described in more detail in the Mercator's Annual Information Form, Audited Financial Statements and MD&A for the year ended December 31, 2013 on the SEDAR website at www.sedar.com. The actual results or performance by Mercator could differ materially from those expressed in, or implied by, any forward-looking statements relating to those matters. Accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on the results of operations or financial condition of Mercator. Except as required by law, the Company is under no obligation, and expressly disclaims any obligation, to update, alter or otherwise revise any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
For basic one-to-one voice or video calling solutions, WebRTC has proven to be a very powerful technology. Although WebRTC’s core functionality is to provide secure, real-time p2p media streaming, leveraging native platform features and server-side components brings up new communication capabilities for web and native mobile applications, allowing for advanced multi-user use cases such as video broadcasting, conferencing, and media recording.
Kubernetes, Docker and containers are changing the world, and how companies are deploying their software and running their infrastructure. With the shift in how applications are built and deployed, new challenges must be solved. In his session at @DevOpsSummit at19th Cloud Expo, Sebastian Scheele, co-founder of Loodse, will discuss the implications of containerized applications/infrastructures and their impact on the enterprise. In a real world example based on Kubernetes, he will show how to ...
Without lifecycle traceability and visibility across the tool chain, stakeholders from Planning-to-Ops have limited insight and answers to who, what, when, why and how across the DevOps lifecycle. This impacts the ability to deliver high quality software at the needed velocity to drive positive business outcomes. In his general session at @DevOpsSummit at 19th Cloud Expo, Eric Robertson, General Manager at CollabNet, will discuss how customers are able to achieve a level of transparency that e...
@DevOpsSummit has been named the ‘Top DevOps Influencer' by iTrend. iTrend processes millions of conversations, tweets, interactions, news articles, press releases, blog posts - and extract meaning form them and analyzes mobile and desktop software platforms used to communicate, various metadata (such as geo location), and automation tools. In overall placement, @DevOpsSummit ranked as the number one ‘DevOps Influencer' followed by @CloudExpo at third, and @MicroservicesE at 24th.
24Notion is full-service global creative digital marketing, technology and lifestyle agency that combines strategic ideas with customized tactical execution. With a broad understand of the art of traditional marketing, new media, communications and social influence, 24Notion uniquely understands how to connect your brand strategy with the right consumer. 24Notion ranked #12 on Corporate Social Responsibility - Book of List.
Established in 1998, Calsoft is a leading software product engineering Services Company specializing in Storage, Networking, Virtualization and Cloud business verticals. Calsoft provides End-to-End Product Development, Quality Assurance Sustenance, Solution Engineering and Professional Services expertise to assist customers in achieving their product development and business goals. The company's deep domain knowledge of Storage, Virtualization, Networking and Cloud verticals helps in delivering ...
In his session at @DevOpsSummit at 19th Cloud Expo, Robert Doyle, lead architect at eCube Systems, will examine the issues and need for an agile infrastructure and show the advantages of capturing developer knowledge in an exportable file for migration into production. He will introduce the use of NXTmonitor, a next-generation DevOps tool that captures application environments, dependencies and start/stop procedures in a portable configuration file with an easy-to-use GUI. In addition to captu...
Most of us already know that adopting new cloud applications can boost a business’s productivity by enabling organizations to be more agile and ready to change course in our fast-moving and connected digital world. But the rapid adoption of cloud apps and services also brings with it profound security threats, including visibility and control challenges that aren’t present in traditional on-premises environments. At the same time, the cloud – because of its interconnected, flexible and adaptable...
SYS-CON Events announced today that SoftNet Solutions will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. SoftNet Solutions specializes in Enterprise Solutions for Hadoop and Big Data. It offers customers the most open, robust, and value-conscious portfolio of solutions, services, and tools for the shortest route to success with Big Data. The unique differentiator is the ability to architect and...
In past @ThingsExpo presentations, Joseph di Paolantonio has explored how various Internet of Things (IoT) and data management and analytics (DMA) solution spaces will come together as sensor analytics ecosystems. This year, in his session at @ThingsExpo, Joseph di Paolantonio from DataArchon, will be adding the numerous Transportation areas, from autonomous vehicles to “Uber for containers.” While IoT data in any one area of Transportation will have a huge impact in that area, combining senso...
More and more brands have jumped on the IoT bandwagon. We have an excess of wearables – activity trackers, smartwatches, smart glasses and sneakers, and more that track seemingly endless datapoints. However, most consumers have no idea what “IoT” means. Creating more wearables that track data shouldn't be the aim of brands; delivering meaningful, tangible relevance to their users should be. We're in a period in which the IoT pendulum is still swinging. Initially, it swung toward "smart for smar...
Cognitive Computing is becoming the foundation for a new generation of solutions that have the potential to transform business. Unlike traditional approaches to building solutions, a cognitive computing approach allows the data to help determine the way applications are designed. This contrasts with conventional software development that begins with defining logic based on the current way a business operates. In her session at 18th Cloud Expo, Judith S. Hurwitz, President and CEO of Hurwitz & ...
@ThingsExpo has been named the Top 5 Most Influential M2M Brand by Onalytica in the ‘Machine to Machine: Top 100 Influencers and Brands.' Onalytica analyzed the online debate on M2M by looking at over 85,000 tweets to provide the most influential individuals and brands that drive the discussion. According to Onalytica the "analysis showed a very engaged community with a lot of interactive tweets. The M2M discussion seems to be more fragmented and driven by some of the major brands present in the...
In the next five to ten years, millions, if not billions of things will become smarter. This smartness goes beyond connected things in our homes like the fridge, thermostat and fancy lighting, and into heavily regulated industries including aerospace, pharmaceutical/medical devices and energy. “Smartness” will embed itself within individual products that are part of our daily lives. We will engage with smart products - learning from them, informing them, and communicating with them. Smart produc...
As ridesharing competitors and enhanced services increase, notable changes are occurring in the transportation model. Despite the cost-effective means and flexibility of ridesharing, both drivers and users will need to be aware of the connected environment and how it will impact the ridesharing experience. In his session at @ThingsExpo, Timothy Evavold, Executive Director Automotive at Covisint, will discuss key challenges and solutions to powering a ride sharing and/or multimodal model in the a...