RSS UpdatesCompany Information for Mercator Gold Plc
Company stock charts - 6 Month chart
 AIM; MCR
View full financial data |
Company Statement
Mercator Gold plc ("Mercator" or "the Company") is a diversified mining investment company with quality assets and the capability to undertake significant, value accretive transactions.
Mercator is dedicated to creating value for its shareholders through a process of finding value, adding value and realising value. In order to achieve this, Mercator is able to access a pipeline of projects sourced from its global network and utilises the expertise of its directors and advisers.
Mercator is incorporated in England and Wales, and listed on the London Stock Exchange's Alternative Investment Market (AIM) with the symbol MCR. Mercator’s American Depositary Receipts (ADRs) are traded in the USA on an over the counter basis with the symbol MTDGY.
Current Operations
Copper Flat Project, New Mexico, USA
Mercator holds an exclusive option over the Copper Flat project, a porphyry copper-molybdenum-gold-silver deposit in the Las Animas mining district of New Mexico, United States and a former producing mine.
It is believed that the Copper Flat project, which has significant infrastructure in place, could be brought back into production within a relatively short timeframe for a relatively low capital outlay.
Mercator has completed a verification of the historic reserves of the Copper Flat deposit and an evaluation of the economics of the project on the basis of current industry costs. Requirements to secure all permits for a return of the project to production are being assessed.
Re-analysis of a statistically significant selection of pulps from historic drill holes completed at Copper Flat is currently underway, and Mercator has commenced a new six-hole programme of confirmatory drilling that will also provide geotechnical data for a planned open pit.
Ongoing work at Copper Flat is oriented around the completion by SRK Consulting of a preliminary economic assessment of the return of the Copper Flat project to production.
About the Copper Flat Project
Much important infrastructure remains in place at Copper Flat, including the tailings pond, 19 miles of power lines, access roads and a major system of diversion dams and channels. Electrical power is available at site from the local grid. In addition, a pre-strip of the ore body has been completed, which along with the infrastructure in place represents a substantial proportion of the capital investment that would be required if the project were to be brought into production from scratch.
The deposit has a low estimated stripping ratio of approximately 0.9:1, based on previous mining plans. Some 181 reverse circulation and core drill holes have previously been completed (equating to approximately 39,000 metres) along with approximately 300m of underground drifting.
Extensive feasibility studies on the restart of production at the project were carried out during the 1980s by reputable technical consultants including Dunn-Behre Dolbear and Pincock, Allen & Holt. Information from actual production in 1982 is also available. In order to restart production, a suitable processing plant would need to be procured and commissioned.
Detailed metallurgical testwork has been completed, with flotation tests performed on drill core and a 6,000 short ton underground bulk sample. These consistently showed a recovery of 92% copper and the production of highly marketable concentrates with an average copper grade of 28%. The results of this testwork were confirmed during actual production.
Much of the groundwork necessary to obtain the permits required for a return of the project to production has been completed. A draft final Environmental Impact Study (EIS) for the project was completed in March 1999 and a Record of Decision was expected by mid 1999. An Air Quality Permit was received in April 1996. New Mexico Mining and Minerals Division permit and New Mexico Ground Water permit applications were pending in 1999 when the then owner of the project entered bankruptcy due to financial problems relating to other assets.
Future Operations at Copper Flat
An open pit mining operation treating up to 6 million short tons of ore per annum to produce 13,000-20,000 metric tons (30-45 million lb) of copper per annum is envisaged at Copper Flat. Copper concentrate would be thickened, filtered and trucked to one of the nearby smelters or to the nearest railhead. Molybdenite concentrate would be filtered, dried and drummed for shipment to customers. Tailings are expected to be thickened to 50% solids and piped by gravity to the existing 370 acre tailings pond.
The most recent Pincock, Allen & Holt plan for a resumption of production at Copper Flat envisaged the mining of 5.8 million short tons of ore and 2 million short tons of waste annually for 11.6 years. The processing plant was to include a gyratory crusher, a single large semi-autogenous (SAG) mill, one or two large ball mills, a single row of large bulk flotation cells, and cleaner and molybdenite flotation circuits. A 35,000 short ton storage pile was to be located between the crusher and SAG mill. Average plant throughput of 16,500 short tons per day, 350 days a year was planned.
Mercator would seek to achieve an increase in the reserves of the Copper Flat deposit prior to the recommencement of production. This would extend the life of the project and ensure robust operating economics.
Previous Operations
In 1982 the Copper Flat project entered production for a period of around three and a half months. During this period, some 7.4 million lbs Cu, 2,306oz Au and 55,966oz Ag was produced. Mining was by open pit and processing took place at a rate of 15,000 short tons per day. The mine ceased production as a result of low prevailing copper prices (less than US$0.65/lb as opposed to a current price well in excess of US$3/lb) and poorly structured financing arrangements on the part of the operator, which had invested a total of approximately US$112 million to bring the project into production.
Copper Flat Project - Preliminary Economic Analysis
Assuming prices of US$2/lb copper, US$10/lb molybdenum, US$900/oz gold and US$13/oz silver, it is estimated that the Copper Flat project has:
– An NPV of US$117m
– An IRR of 24%
Assuming prices of US$3/lb copper, US$10/lb molybdenum, US$900/oz gold and US$13/oz silver, it is estimated that the Copper Flat project has:
– An NPV of US$348m
– An IRR of 45%
This analysis is based on an owner mining scenario, initial capital costs of US$115m and a discount rate of 8%. It is sourced from a preliminary review of the Copper Flat project carried out by SRK Consulting.
Exercise of Mercator’s Option
In order to exercise its option over the Copper Flat project, Mercator would make payments to the vendors as follows: US$1m by 14 February 2010; US$1.85m by 14 August 2010; and US$7m by 14 February 2011. All the payments are discretionary, and Mercator can elect not to proceed with the exercise of the option at any stage. The final payment may be deferred until 16 May 2011 for an additional payment of US$150,000. The vendors would retain a net smelter return (NSR) of 3.25%.
ACS Asia, an Asia Pacific Focused Metal Products Business
Mercator holds a 70% economic interest in ACS Asia, an Asia Pacific focused metal products business formerly part of the US industrial conglomerate Tyco International. ACS Asia’s product range principally consists of Unistrut metal construction products, which are manufactured by ACS Asia in a modern facility in Rayong, Thailand.
Unistrut is a well known brand in construction products. Its core product lines are electrical and mechanical support systems, for use with cables and pipes etc. within major structures. Significant buyers include the mining, infrastructure and general large commercial construction sectors.
ACS Asia has the exclusive right to sell Unistrut products in eight Asian countries, and Mercator believes the business of ACS Asia to have considerable potential for expansion. www.acscablesupports.com
Board of Directors and Key Management
| Michael Bernard Silver, BSc Eng (Hons) - Executive Chairman |
| Michael Silver was appointed as Chairman on 28 July 2008. He has broad and detailed experience in civil engineering including thirty years experience in the mining industry. He is a Member of the Institution of Engineers of Australia. Mr Silver founded Highlands Mining Ltd in 1968 bought in 1970 by Quest Mining and Exploration. He was involved in starting the Telfer gold mine for Newmont Australia and numerous other operations. Subsequently was involved in developing mines as a Principal and in conjunction with other Public Companies and was involved in numerous capital raisings. |
| His operational experience in the mining sector in Australia and Overseas encompasses most of the minerals mined in Australia. As a direct result of developing these projects Michael Silver gained broad ranging management experience and involvement in many businesses associated with the resource industries gaining corporate experience in the development and funding of six public companies, Quest Mining and Exploration Ltd, Southern Goldfields NL, Regent Mining Limited, Marino Ltd, Dome Resources Ltd and Harrington Group Ltd. His oil industry experience was acquired during his tenure as the Chairman of Drillsearch Oil Limited. |
| Public Company Board positions have been held in over ten publicly listed companies over the last thirty years. These have ranged from non-executive to executive roles and included chief executive and chair positions in both Australian and Canadian companies. |
| Patrick Aloysius Harford, BSc (Hons) - Managing Director |
| Patrick Harford was appointed Managing Director on 22 March 2004. He graduated with Honours in Geomorphology from Melbourne University in 1973. |
| He has experience in gold and diamond exploration and production in Australia and southern Africa. |
| His past roles have seen Patrick involved with Grants Patch Mining Limited (Managing Director) - a gold mine operator |
| in Western Australia and the Northern Territory, Zapopan NL - (Managing Director) - locating and developing Mt Todd and Tanami mines, also in the Northern Territory and Auridiam Consolidated NL - successful construction of a 2 million tonne |
| per annum diamond mine in Zimbabwe. |
| Michael John de Villiers, B Comm CPA (SA) - Finance Director |
| Michael de Villiers was appointed Finance Director on 22 March 2004. He qualified as a Certified Public Accountant(SA) with Ernst & Young in Cape Town. |
| Michael gained his experience as financial manager at mining and chemicals operations in Namibia, Botswana, Ghana and Bulgaria. |
| He was previously the Finance Director of Oxus Gold plc and Navan Mining plc. |
| Michael Elias, Non-Executive Director |
| Michael Elias was appointed a Non-Executive Director on 7 July 2004. He is a geologist with over 30 years of experience in the mining industry. He has worked with WMC (mainly in nickel projects, as Chief Geologist Resource Development, Nickel Division) and Geological Survey of Western Australia. He is currently a director of CSA Australia. |
Company AddressPeek House, 3rd Floor, 20 Eastcheap
|
CapitalAUTHORISED 1,000,000,000
|
Nominated BrokersDaniel Stewart & Company Ltd | Nominated AdvisorsDaniel Stewart & Company Ltd |
Major Shareholders
| As as 21 December 2009 | |
| Lynchwood Nominees Ltd | 17.07% |
| JIM Nominees Ltd | 8.39% |
| Barclayshare Nominees Ltd | 6.30% |
| TD Waterhouse Nominees (Europe) Ltd | 4.36% |
| Pershing Nominees Ltd | 4.07% |
| L R Nominees Ltd | 3.74% |
| Credit Suisse Securities (Europe) Ltd | 3.43% |
Related News
21/06/10 - Mercator Gold Hopes To Use Solar Energy To Power Mining And Processing Work At Its Copper Flat Copper-Gold Project In New Mexico18/03/10 - Mercator Gold Bounces Back To Life With A Series Of Subtle Deals
Most Recent Statement
15/06/10 - Renewable Energy Partnership07/06/10 - Issue of Equity
03/06/10 - Directorate Change
25/05/10 - Copper Flat Resource Estimate
21/05/10 - Holding(s) in Company
17/05/10 - Placing of 42.5 Million New Ordinary Shares