Mercator tools up Mineral Park mine (July 20, 2005)

Vancouver – With an eye to expand copper production at its Mineral Park mine in northwestern Arizona, Mercator Minerals (ML-V) has purchased a used milling circuit.

The 18,000-tonne-per-day process mill cost US$6 million and comes with a significant spare parts inventory. Mercator partially funded the acquisition by collateralizing existing mining equipment through a US$3-million lease back arrangement.

The company is midway through a feasibility study examining resumption of milling at Mineral Park, to produce copper-molybdenum concentrates, in addition to ongoing expansion of the heap leach and SX-EW operations. The "mine-for-leach" operations recommenced in 2004 and produced about 3.6 million pounds of cathode copper last year. First quarter 2005 copper production came in at 1.3 million pounds.

The milling circuit addition forms the backbone of the company’s goal of attaining annual copper production of 20 million pounds by 2006.

Mercator believes the throughput of the mill can be boosted up to 35,000-tonnes-per-day with minor modifications. The processing rate increase is achievable due to Mineral Park ore being significantly softer than that previously run through the mill. A molybdenum circuit is also proposed.

The company recently raised $15 million earmarked for expansion of its SX-EW operation. The funds were used in the acquisition of a mining fleet, debt repayment and the current feasibility study.

Proven and probable oxide reserves at Mineral Park stand at 77 million tonnes grading 0.24% copper. Almost 181,000 tonnes (about 400 million pounds) of copper has been outlined using a 0.44-to-1 strip ratio, 0.12% copper cut-off grade and US$1.00 per pound metal price.

The open pit Mineral Park mine has produced copper since the mid-1960s under a number of operators. Mineralization is typical copper-molybdenum porphyry, with a quartz-monzonite stock intruding a schist and granitic basement complex.

Mercator purchased the producing Mineral Park copper mine from Aussie-listed Equatorial Mining in mid-2003 for 4.6 million shares plus 5% of net operating proceeds capped at US$2.72 million.

With 44 million shares outstanding, the company posts a $29-million market capitalization at its recent trading level of 65 per share.