NEW YORK Mercator Minerals Ltd. is considering a merger or sale of the company as part of a strategic review triggered by challenges in the copper and molybdenum markets.
The Vancouver, British Columbia-based mining company said it initiated the review "in light of the commodity price environment, capital market conditions and the challenges these pose for the company."
"The strategic alternatives being considered include, but are not limited to, a sale of the company, a business combination with another entity, a sale of all or a portion of the assets of the company, a strategic investment in the company or any combination thereof," Mercator said. "The company has conducted discussions with, executed confidentiality agreements with, and received nonbinding proposals from a number of interested parties. At present, there can be no assurance as to what, if any, strategic alternatives might be pursued by the company."
The review is being conducted by a special committee of the board of directors, while BMO Capital Markets Corp. also has been engaged as a financial advisor.
Mercators second-quarter earnings fell 60.5 percent from a year earlier due to lower realized copper and molybdenum prices (amm.com, Aug. 15). The average copper price was down 11 percent to $3.05 per pound in the same comparison, and the average molybdenum price was 18.4-percent lower at $10.64 per pound.
Molybdic oxide is trading in a range of $9.20 to $9.40 per pound, according to AMMs most recent assessment.
Mercator operates the wholly owned Mineral Park copper-molybdenum-silver mine in Arizona, and is developing the El Pilar copper heap leach project and the El Creston molybdenum-copper property, both in Mexico.