Mercator Minerals Ltd. (TSX:ML) ("Mercator" or "Company") is
pleased to announce today, further to the September 4, 2012 press
release, it has filed an updated El Pilar National Instrument
43-101 ("NI 43-101") compliant Feasibility Study Technical Report
("2012 FS") on SEDAR (www.sedar.com). The 2012 FS is an update to
the Feasibility Study completed November 2011 ("2011 FS"), which
further enhances the potential development of a robust,
large-scale, low-cost copper mine at the El Pilar project
("Project"), located in the mining friendly jurisdiction of the
northern Mexican state of Sonora.
2012 FS Base Case(1) Highlights
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Net present value ("NPV"), after tax, discounted at 8% ($ millions) $ 416.0
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Internal rate of return ("IRR"), after tax 36.6%
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Payback period, after tax (years) 1.8
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Life-of-mine ("LOM"), average annual production (m lbs) 79.3
First five years, average annual production (m lbs) 85.4
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Average LOM total cash operating costs ($/lb) $ 1.34
First five years, average annual cash operating costs(i) ($/lb) $ 1.22
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Initial capital costs ($ millions) $ 279.9
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Mine life (years) 13
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Total copper production (m lbs) 998.3
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(1) Base Case at $3.83/lb copper price per pound Years 0 and 1, $3.44/lb
Year 2, $3.14/lb Year 3 and $2.60/lb for the remaining life of mine,
averaging $2.82/lb copper over the life of mine. All calculations are Base
Case except where otherwise specified.
The 2012 FS includes a new base case ("Base Case")
utilizing:
-- enhanced copper recoveries based on heap leaching in three meter lift
heights (as compared to the six meter lift heights used in the 2011 FS);
-- the same copper price assumptions as the 2011 FS;
-- updated mineral reserve, metal recoveries and mine plan;
-- capital and operating cost assumptions based on the 2011 FS study with
no escalation added other than an increase in the initial capital based
on an increased leach pad area in the first year of operations;
-- the purchase of a shovel in Year 3 as compared to Year 5 in the 2011 FS
(this minor change adjusts the NPV from $417.0 million to $416.0 million
and the IRR from to 37.0% to 36.6%, while all other project economics
remain the same).
Further Opportunities for Enhancement
The 2012 FS highlights various opportunities to increase the
value of the Project, as additional metallurgical tests show that,
using three meter lift heights may provide greater copper
extraction over a 360 day leach cycle as compared to the 180 day
leach cycle used in the Base Case. This is due to continued copper
extraction over time in the multi-lift heap configuration. If
realized, this opportunity could result in:
-- An increase of 14% over the Base Case in total copper recovered, to
1,142 billion pounds;
-- An increase of 13% over the Base Case in the average life of mine
recoveries to 64.9%;
-- A 36% increase in after-tax NPV8% to $565.6 million;
-- A 18% increase in the IRR from 36.6% to 43.3%; and
-- A payback of 1.7 years as compared to 1.8 years in the Base Case.
"We are very encouraged with the continued improvements in and
upside potential of the El Pilar Project. The recently completed
360-day leach results from 11 three meter high mini-columns (tested
on the same ore sample as used in the Base Case of the 2012 FS)
indicate increased copper recoveries could be achieved," commented
D. Bruce McLeod, President & CEO. "The results also show that
higher acid pre-cure amounts, combined with reduced acid
application rates, can increase copper recoveries by as much as 9%
over the 180 days of leaching, thereby indicating even better
project economics may be achievable."
For readers to fully understand the information in this news
release, they should read the 2012 FS in its entirety, including
all qualifications, assumptions and exclusions that relate to the
information set out in this news release. The 2012 FS is intended
to be read as a whole, and sections should not be read or relied
upon out of context. The technical information in the 2012 FS is
subject to the assumptions and qualifications contained
therein.
El Pilar Permitting Update
The Project is construction-ready, with approval for all
environmental permits needed for construction having been received
and the acquisition of all required surface land rights having been
completed. Important permits received recently include Notice of
Approval of the Change of Land Use (CUS) Permit on August 23, 2012
and the MIA Study Approval Resolution for the access road and
railroad spur on September 21, 2012.
Qualified Person
This news release has been prepared under the supervision of
Michael Broch, BSc. Geology, MSc Economic Geology, FAusIMM, the
Company's Vice President, Exploration and Evaluations, a Qualified
Person as defined in National Instrument 43-101. Mr. Broch was the
author of the 2012 FS and has read and approved the relevant
technical portions of this news release.
About Mercator Minerals Ltd.
Mercator Minerals Ltd., a TSX listed Canadian mining company
with the potential to have one of the fastest growing base metal
profiles in its peer group, is a copper, molybdenum and silver
producer with a diversified portfolio of high quality assets in the
USA and Mexico. Mercator provides investors exposure to current
copper, molybdenum and silver production from the large tonnage
long life Mineral Park Mine in Arizona, as well as mid-term
exposure to potential copper production from its El Pilar deposit
in the State of Sonora in northern Mexico and longer term exposure
of molybdenum and copper through the potential development of the
El Creston deposit also in the State of Sonora in northern
Mexico.
For further information please visit
www.mercatorminerals.com.
On Behalf of the Board of Directors
MERCATOR MINERALS LTD.
D. Bruce McLeod, P.Eng., President and CEO
Forward-Looking Information
This news 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. 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 the Company's business strategy, future
plans, projections, objectives, estimates and forecasts and
statements as to management's expectations with respect to, among
other things, financing plans, future production, mine development,
mine operations, mine and power costs, estimating grade levels,
future recovery levels, future production levels, capital costs,
costs savings, cash and total costs of production of copper,
projected mine life, completion dates for the development of the El
Pilar Project, future copper prices (including the long-term
estimated prices used in calculating the Company's El Pilar mineral
reserves), end-use demand for copper, and anticipated timing of
production at the El Pilar Project and discussions of future plans,
projections and objectives. In addition, estimates of mineral
reserves and mineral resources may constitute forward looking
statements to the extent they involve estimates of the
mineralization that will be encountered if a property is developed.
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, 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 news release, the Company has
applied several material assumptions, including without limitation,
the assumptions that: (1) market fundamentals will result in
sustained copper demand and prices; (2) the construction and
operation of the El Pilar Project will continue to be viable
operationally and economically and will proceed as expected; and
(3) any financing needed will be available on reasonable terms. The
risks and assumptions are described in more detail in the Company's
Annual Information Form, audited financial statements and MD&A
for the year ended December 31, 2011 on the SEDAR website at
www.sedar.com. The Company does not assume the obligation to revise
or update these forward-looking statements after the date of this
news release or to revise them to reflect the occurrence of future
unanticipated events, except as may be required under applicable
securities laws.
Note to US Investors
This news release has been prepared in accordance with the
requirements of the securities laws in effect in Canada, which
differ from the requirements of United States securities laws.
Information contained in this news release may contain descriptions
of the Company's mineral deposits that may not be comparable to
similar information made public by U.S. companies subject to the
reporting and disclosure requirements under the United States
federal securities laws and the rules and regulations
thereunder.
(i) Cash Operating Costs
"Cash Operating Costs" is a non-IFRS Performance Measure. This
performance measure is included because this statistic is a key
performance measure that management uses to monitor performance.
Management uses this statistic to assess how the Company is
performing to plan and to assess the overall effectiveness and
efficiency of mining operations. This performance measure does not
have a meaning within IFRS and, therefore, amounts presented may
not be comparable to similar data presented by other mining
companies. This performance measure should not be considered in
isolation as a substitute for measures of performance in accordance
with IFRS.
Contacts: Mercator Minerals Ltd. D. Bruce McLeod, P.Eng.
President & CEO 778.330.1290bmcleod@mercatorminerals.com
Mercator Minerals Ltd. David Jan, CA Head of Investor Relations
& Communications 778.330.1295djan@mercatorminerals.com
www.mercatorminerals.com