Mercator Gold

Full Mercator Gold profile here

Mercator Gold plc 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 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 Gold to sell exclusive Copper Flat option to Canada's THEMAC Resources

Tuesday, March 16, 2010 by Sergei Balashov
company news image

Mercator Gold (AIM: MCR, OTC: MTGDY) has entered into a binding heads of agreement with THEMAC Resources Group (TSX-V: MAC.H) to sell its entire interest in New Mexico Copper Company Inc (NMCC), whose main asset is an exclusive option over the Copper Flat copper-gold-molybdenum-silver project in New Mexico.

Mercator will receive 10.5 million fully paid shares in THEMAC and 10.5 five-year warrants exercisable at C$0.28 per share. THEMAC will also fund all expenditure by Mercator or NMCC over the Copper Flat project from the date of the agreement until the completion of the transaction and place 5.5 million shares at C$0.15 per share with attached one-year warrants exercisable at C$0.28 per share. A second placing of shares to raise C$5 million with one year warrants at a price sufficient to raise C$10 million will be undertaken prior to the completion of the transaction.

The closing price of shares in THEMAC Resources on 12 March 2010 was C$0.24 with 12.6 million shares in issue.

Proactiveinvestors recommends

“The Copper Flat project is an exceptionally promising asset in the present copper market, and vending NMCC and its exclusive option over the project into a dedicated North American listed company with highly capable and experienced management will ensure that the project becomes well placed to obtain the funding required for the timely recommencement of production,” said managing Director of Mercator Gold Patrick Harford.

Mercator noted that it is no longer responsible for the purchase and development costs of Copper Flat, while retaining substantial interest in the project. The company said its interest in THEMAC could generate “extraordinary” returns.

Copper Flat is a former producing mine with substantial infrastructure still in place. The Copper Flat deposit has historic reserves of 50.21 million short tons at an average grade of 0.45% Cu (copper), 0.1244 g/t Au (gold), 2.053 g/t Ag (silver) and 0.015% Mo (molybdenum), based on a cut-off grade of 0.23% Cu.

On the basis of current historic reserves and assuming metal prices of US$3/lb copper, US$10/lb molybdenum, US$900/oz gold and US$13/oz silver, the Copper Flat project is estimated to have an NPV (net present value) of US$348 million and an IRR (internal rate of return) of 45%, assuming initial capital costs of US$115 million for the recommencement of production and a discount rate of 8%. The current price of copper is US$3.33/lb.

In a separate statement today, Mercator announced it placed a further 2 million new ordinary shares at a price of 2.5 pence per share to raise £50,000 before expenses, only a day after saying it has raised £422,500 through a placing of 16.9 million new shares at 2.5p each. Both placings were carried out by Old Park Lane Capital.


Register here to be notified of future Mercator Gold articles.

Investors interested in Mercator Gold recently viewed

Additional Information

Market:AIM
Sector:General Mining - Gold
EPIC:MCR
Latest Price: 0.77p  (0.00%)
52-week High:3.75p
52-week Low:0.68p
Market Cap:2.54M

1 year chart

digital-look imported chart image

1 day chart

digital-look imported chart image

No investment advice

The Company is a publisher and is not registered with or authorised by the Financial Services Authority (FSA). You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.