Mercator Minerals Reports Third Quarter 2012 Results

Mercator Minerals Reports Third Quarter 2012 Results 
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 11/14/12 --   
(All US$ unless otherwise specified) 
Mercator Minerals Ltd (TSX:ML) ("Mercator" or the "Company") today
announced its financial results for the three months and nine months
ended September 30, 2012. During the third quarter 2012, the Company
generated revenues of $58.5 million and gross profit of $4.7 million,
in spite of a buildup of 2.3 million pounds of copper in concentrate
inventory at the port which was subsequently shipped in the first
week of October, cash flow from operations (excluding changes in
non-cash working capital items) of $2.1 million, and a net loss of
$15.1 million ($0.06 per share, basic), or on an adjusted net
earnings(i) basis, a loss of $3.7 million ($0.01 per share, basic).  
"We are pleased with continued production improvements being
achieved, including the record metal recoveries and output this
quarter despite the power interruptions at Mineral Park," stated
Bruce McLeod, President & CEO of Mercator. "In the upcoming quarters,
we expect further optimization will allow us to continue to deliver
higher quarter over quarter metal production while achieving lower
unit costs." 
THIRD QUARTER 2012 HIGHLIGHTS 


 
--  Record copper equivalent production of 22.2 million pounds, comprised of
    10.7 million pounds of copper in concentrates and cathode, 2.5 million
    pounds of molybdenum in concentrates and 154,000 ounces of silver. 
--  Record metal recoveries were achieved, with copper and molybdenum
    recoveries for the quarter of 84.5% and 82.4%, respectively, which is 6%
    and 10% higher, respectively than design. 
--  Throughput averaged 42,042 tons per day ("tpd"), lower than expected due
    to 16 days of unscheduled partial downtime associated with power
    availability. 
--  Total cash costs(i), which is calculated on a co-product basis and
    allocates total cash costs(i) on the percentage of sales revenues by
    each product, were $2.67 per pound of copper produced and $9.49 per
    pound of molybdenum produced. 
--  Revenues in the third quarter 2012, as compared to the same quarter of
    2011, were impacted by lower molybdenum prices realized and lower copper
    sales volumes due primarily to the buildu
p of 2.3 million pounds of
    copper inventory at the port, which was not shipped until the first week
    of October (total copper in concentrate inventory at quarter-end was 3.5
    million pounds, an increase of 2.3 million pounds over last quarter's
    inventory levels of 1.2 million pounds). Revenues were positively
    impacted by higher copper prices realized and higher molybdenum sales
    volumes. 
--  Cash flow from stand-alone Mineral Park operations, after the cost of
    hedging, was $2.5 million in the third quarter of 2012. 

 
Copper equivalent production throughout this press release is
calculated using a molybdenum/copper ratio of 4.53, based on the
Company's estimated 2012 metal prices, including copper hedges. 


 
----------------------------------------------------------------------------
                                     Three months ended,  Nine months ended,
$ millions, unless otherwise noted          September 30        September 30
                                    ----------------------------------------
                                          2012      2011      2012      2011
----------------------------------------------------------------------------
Revenues                                  58.5      64.0     185.1     192.3
----------------------------------------------------------------------------
Gross profit                               4.7      10.9      23.4      48.3
----------------------------------------------------------------------------
Net (loss) income                       (15.1)     106.8    (13.5)     124.6
(Loss) earnings per share, basic       $(0.06)      0.43   $(0.05)      0.57
----------------------------------------------------------------------------
Adjusted net (loss) income (i)           (3.7)       0.8     (5.7)       6.6
Adjusted (loss) earnings per share     
 (i)                                   $(0.01)     $ nil   $(0.02)     $0.03
----------------------------------------------------------------------------
Cash flow from operations                (3.6)      23.2       1.4      53.5
----------------------------------------------------------------------------
Production (million pounds)                                                 
- Copper                                  10.7      10.5      30.1      31.1
- Molybdenum                               2.5       2.0       7.4       4.7
- Copper equivalent basis                 22.2      19.6      63.6      52.4
----------------------------------------------------------------------------
Throughput (tons per day)               42,042    36,151    45,769    32,551
----------------------------------------------------------------------------
Recoveries (%)                                                              
- Copper                                  84.5      77.2      78.8      76.2
- Molybdenum                              82.4      76.6      77.4      68.3
----------------------------------------------------------------------------
On-site operating costs ($/ ton                                             
 milled)                                 11.28     11.38     10.11     11.69
----------------------------------------------------------------------------
Cash costs(i) on a co-product basis                                         
 ($/lb)                                                                     
- Copper                                  2.67      2.37      2.45      2.19
- Molybdenum                              9.49     10.99     10.69     12.21
----------------------------------------------------------------------------
Average realized prices ($/lb)                                              
- Copper (excluding hedges)               3.65      3.32      3.71      4.00
- Molybdenum                             10.71     14.56     12.54     15.65
----------------------------------------------------------------------------

 
Operating Highlights 
Mineral Park Mine 
In the third quarter of 2012, the Mineral Park operations performed
well, with record quarterly copper equivalent production of 22.2
million pounds, which was 10% and 4% higher than the first and second
quarters of 2012, respectively. Mineral Park produced 10.7 million
pounds of copper (9.8 million pounds in concentrates and 0.9 million
pounds in cathode) and 2.5 million pounds of molybdenum. Despite the
strong production, the quarter was impacted by 16 days of unexpected
partial power availability resulting from the necessity of having to
take the on-site gas turbine out of service. A scheduled maintenance
inspection of the turbine in August 2012 revealed some damaged
components and resulted in a leased turbine unit being installed
while the original unit undergoes repairs. The unexpected change-out
resulted in 68% less power being available to the mill for seven days
during the quarter. A further nine days of power supply disruptions
during the quarter was experienced due to turbine downtime for
follow-up inspections of the leased turbine and seasonal weather
disruptions at both the utility provider and the mine site. The
reduced power available negatively impacted metal production,
throughput rates and on-site operating unit costs for the quarter. 
Copper and molybd
enum recoveries continue to be above target levels,
averaging 84.5% and 82.4% for the quarter respectively, or 6% and
10%, respectively, better than target recovery rates of 80% and 75%.
The Company believes the improved recovery rates are sustainable and
are due in part to improved flotation practices, optimized use of
reagents, and ore mineralogy.  
Fourth Quarter 2012 Mineral Park Outlook 
The Company expects to produce approximately 22.8 million copper
equivalent pounds of copper in the fourth quarter 2012, comprised of
10.4 million pounds of copper (9.5 million pounds copper in
concentrate and 0.9 million pounds of cathode copper) and 2.8 million
pounds of molybdenum in concentrate.  
The Company is in the process of updating Mineral Park resource and
reserve estimate which it expects will be released in early 2013,
along with the Company's production expectations for fiscal 2013. 
El Pilar Project 
On October 19, 2012, the Company filed on SEDAR (www.sedar.com) an
updated El Pilar Feasibility Study ("Study"), a National Instrument
43-101 ("NI 43-101") compliant technical report for the El Pilar
Project. The Study, which provides an update to the Feasibility Study
issued in November 2011, continues to support the case for the
development of a robust, economically feasible copper project at the
Company's wholly-owned El Pilar Project in northern Mexico. The
Study, using a average life-of-mine copper price of $2.82 per pound,
indicated a net present value ("NPV") after-tax, discounted at 8%, of
$416.0 million; internal rate of return ("IRR"), after-tax, of 36.6%;
and payback period of 1.8 years. The project has an expected average
life of mine total cash costs(i) are $1.34 per pound of payable
copper, offers low capital intensity with initial capital of $280.0
million to produce life-of-mine ("LOM") average annual production of
79.3 million pounds of copper cathode. The 13-year mine life is
expected to produce 998.3 million pounds of copper.  
The Study highlights various opportunities to increase the value of
the El Pilar 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 Study's 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% in
total copper recovered to 1,142 billion pounds; an increase of 13% 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 to
43.3%; and payback improves to 1.7 years.  
The El Pilar 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.  
For readers to fully understand the El Pilar Project, they should
read the Study in its entirety, including all qualifications,
assumptions and exclusions that relate to the information set out in
this news release. The Study 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 Study is subject to the assumptions and
qualifications contained therein.  
Financial Statements and Management Discussion & Analysis (MD&A) 
This news release should be read in conjunction with the MD&A and
Financial Statements for the three and nine month period ended
September 30, 2012 which will be posted on Mercator's website
(www.mercatorminerals.com/s/FinancialStatements.asp) and on SEDAR
(www.sedar.com) under the Company's profile.  
(i) Alternative Performance Measures 
This press release refers to "cash costs" and "adjusted net income
(loss)" which are not performance measures recognized as having a
standardized meaning under IFRS. The Company discloses these
performance measures (marked with an (i)), which have been derived
from our financial statements on a consistent basis, because we
believe they are of assistance in understanding our results of
operations and financial position and are meant to provide further
information about our financial results. These performance measures
may not be comparable to similar data presented by other mining
companies. This information should not be considered in isolation or
as a substitute for measure of performance prepared in accordance
with IFRS. Readers should refer to "Alternative Performance Measures"
section on page 27 of the MD&A for additional information on these
measures. 
Webcast/Conference Call 
Mercator's senior management will hold a conference call and a live
audio webcast on November 15, 2012 at 8:30 a.m. Pacific time to
discuss results for the third quarter 2012. To participate in the
call, dial 877-240-9772 (North America) and 800-2787-2090
(International). To listen to the live webcast, visit
www.gowebcasting.com/3844. A presentation will accompany the call and
will be available on the company's website under
www.mercatorminerals.com/s/Presentations.asp.  
An archived recording of the conference call will be available for
playback after the event until November 29, 2012 by dialling
1-800-408-3053 (North America), 800-3366-3052 (International) with
conference pass code 8809732#. 
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 
National Instrument 43-101 Compliance 
Unless otherwise indicated, Mercator has prepared the technical
information in this news release ("Technical Information") based on
information contained in the technical reports, news releases,
material change reports and quarterly and annual consolidated
financial statements and management discussion and analysis
(collectively the "Disclosure Documents") available under Mercator
Minerals Ltd.'s company profile on SEDAR at www.sedar.com. Each
Disclosure Document was prepared by or under the supervision of a
qualified person (a "Qualified Person") as defined in National
Instrument 43-101 Standards of Disclosure for Mineral Projects of the
Canadian Securities Administration ("NI 43-101"). Readers are
encouraged to review the full text of the Disclosure Documents which
qualifies the Technical Information. Readers are advised that mineral
resources that are n
ot mineral reserves do not have demonstrated
economic viability. The Disclosure Documents are each intended to be
read as a whole, and sections should not be read or relied upon out
of context. The Technical Information is subject to the assumptions
and qualifications contained in the Disclosure Documents.  
The Technical Information contained in this news release of has been
prepared under the supervision of, and its disclosure has been
reviewed by the following who are deemed to be Qualified Persons
under NI 43-101: Gary Simmerman, BSC, Mining Eng., FAusIMM,
Mercator's Vice President, Mineral Park Mine and Mike Broch, BSC
Geology, MSSC Economic Geology, FAusIMM, the Company's
Vice-President, Exploration and Evaluations. 
Forward-Looking Information 
This press 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 future plans, guidance, projections,
objectives, estimates and forecasts and statements as to management's
expectations with respect to, among other things, the size, grade and
quality of the Company's mineral reserves and mineral resources,
potential mineralization, and possible extensions of zones. 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 press release, the Company has applied several material
assumptions, including without limitation, the assumptions that:
(1) market fundamentals will result in sustained copper and
molybdenum demand and prices; (2) the current copper leach operations
at Mineral Park remain viable, operationally and economically; (3)
the milling operations at Mineral Park will continue to be viable,
operationally and economically; (4) the financing, construction and
operation of the El Pilar Project will proceed as expected; and (5)
any additional financing needed will be available on reasonable
terms. The Company's ability to progress the El Pilar and El Creston
projects towards a construction decision and eventually into
production is dependent on the Company's ability to arrange for
sufficient funds to cover the capital and start-up related costs.
There can be no assurance that the Company will be successful in
arranging such funding. Statements concerning mineral reserves and
mineral resource estimates may also be deemed to constitute
forward-looking statements to the extent that they involve estimates
of the mineralization that may be encountered during current or
future operations. The words "guidance", "expect," "anticipate,"
"estimate," "may," "will," "should," "intend," "believe," "target,"
"budget," "plan," "projection" and similar expressions are intended
to identify forward-looking statements. Information concerning
mineral reserve and mineral resource estimates also may be considered
forward-looking statements, as such information constitutes a
prediction of what mineralization might be found to be present if and
when a project is actually developed. 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. 
Contacts:
Mercator Minerals Ltd.
D. Bruce McLeod, P.Eng.
President & CEO
778.330.1290
bmcleod@mercatorminerals.com 
Mercator Minerals Ltd.
David Jan, CA
Head of Investor Relations & Communications
778.330.1295
djan@mercatorminerals.com
www.mercatorminerals.com
 
 
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