VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 04/10/13 -- Mercator Minerals Ltd. (TSX: ML) ("Mercator" or the "Company") is pleased to provide an update on on-going recent activities at its wholly-owned Mineral Park Mine ("Mineral Park"), including production results for the three months ended March 31, 2013. Most importantly, recent changes to the grinding circuit have resulted in sustained throughput increases of approximately 20% to average 54,700 tons per day ("tpd").
"We are very encouraged with the grinding circuit optimizations made in the mill late in the first quarter," stated Bruce McLeod, Mercator's President and CEO. "The improvements have increased grinding efficiency by passing grinding load from the SAG mills to the previously underutilized ball mills and by optimizing the internal configuration of the SAG mills. Early results indicate average throughput rates have increased by approximately 20% over the expected ore grind index assumed in our 2013 mine plan, while maintaining metal recovery rates at above design rates."
"Our strategy of working safely, increasing productivity, and reducing costs throughout the entire Company is starting to deliver benefits as our financial position stabilizes," continues Mr. McLeod. "Productivity improvements and cost reductions are positioning us to unlock shareholder value."
Mineral Park Activities Update
Productivity Improvement Initiatives
At Mineral Park, average mill throughput rates have recently increased due to the optimization of the internal configuration of the two SAG mills and the changing of the pebble handling processes by feeding a higher proportion of the recycled pebbles directly into the four ball mills. As a result of these optimizations (refer to chart below), since March 21, 2013, average throughput rates, as measured by tons per hour ("tph"), when compared to harder ore blends (as measured by ore grind index) have increased significantly. Over this period, mill throughput rates, on a sustained basis, at an average ore grind index of 11.3, have averaged 54,700 tpd, which is 9% above the stated design capacity of 50,000 tpd.
Chart: Increased throughput rates
Click on the following link to the chart: http://media3.marketwire.com/docs/ml-0410-chart.pdf
As a result of the recent throughput improvements, the Company is reviewing the scope and requirement for the $5 million pebble crusher included in the previously announced $13.7 million capital expenditures program for 2013.
Other optimization initiatives that have contributed to the increase in average mill throughput include: (1) implementing a hard ore and zinc modelling program that has increased ore blending options to manage hardness and zinc content, and (2) implementing a blasting optimization program that has reduced oversize ore going to the primary crusher and entering the mill. Two additional haul trucks, with a third expected to arrive in June 2013, were commissioned late in the first quarter of 2013 and have helped increase flexibility in ore blending options.
Metal Recovery Initiatives
Since the commissioning of the Phase II expansion late in 2011, considerable progress has been made in improving copper and molybdenum recoveries, to the point they now exceed design parameters. During the first quarter of 2013, recoveries for copper and molybdenum were 82.5% and 82.3%, respectively, compared to 72.6% and 70.9% in the first quarter of 2012, and design parameters of 80% and 75% for copper and molybdenum, respectively.
With the improved safety culture arising from the "Safe Production" program implemented a year ago at Mineral Park, year-over-year safety incident rates, as measured by total reportable incident rates ("TRIR") have decreased significantly to rates that are now below those for comparable open pit mines in Arizona, while employee turnover has decreased by 10% over the same period.
Cost Reduction Initiatives
Cost reduction initiatives continue to be implemented throughout the organization with reduced costs at the operations and reduced spending on administration. Comparing 2011 to 2012, onsite costs (on a per ton milled basis) have been lowered by 7% from $11.04 per ton milled in 2011 to $10.29 in 2012. The Company's goal is to further reduce onsite costs below $10.00 per ton. Administrative cost efficiency initiatives have reduced administrative expenses from $2.3 million in the first quarter of 2012 to $1.4 million in the fourth quarter of 2012.
A detailed review of the exploration potential at Mineral Park has outlined three areas within the current life-of-mine pit design that have the potential, with further exploration work, to add to the Mineral Park mineral resource base. All three areas have intersected near surface copper and molybdenum values over mineable widths that have the potential, with an additional exploration work program, to optimize Mineral Park's mineral reserve and mineral resource estimates. In addition, two areas immediately adjacent to the current life-of-mine pit design contain near surface copper mineralization. The Company will continue to compile this data with next steps, including a potential drilling program, to be determined.
First Quarter 2013 Operating Results
Production for the three month period ended March 31, 2013, totalled 20.4 million pounds of copper equivalent(i), comprised of 8.3 million pounds of copper in concentrates, 0.8 million pounds of cathode copper, 2.4 million pounds of molybdenum and 152.1 thousand ounces of silver.
Production (1) Q1 2013---------------------------------------------------------------------------- Copper in concentrate (million lbs) 8.3 Cathode Copper (million lbs) 0.8 -------------------- Total Copper (million lbs) 9.1 Molybdenum in concentrate (million lbs) 2.4 Silver (000 oz) 152.1 Copper equivalent(i) (million lbs) 20.4Mine (millions) Total tons mined 7.2 Ore tons mined 3.8 Leach tons mined 0.4 Low grade tons mined 0.8 Waste tons mined 2.0Mill Tons processed (million) 3.8 Tons processed per day 42,738 Copper grade (%) 0.13 Molybdenum grade (%) 0.038 Silver grade (oz/t) 0.10Recoveries (%) Copper 82.5 Molybdenum 82.3 Silver 41.4Concentrates (1) Copper concentrates (dry tons) 21,004 Copper (%) 19.6 Silver (oz/t) 7.24 Molybdenum concentrates (million dry lbs) 5.3 Molybdenum (%) 46.3(1) Adjustments based on final settlements will be made in future periods.
As previously announced, production during the first quarter of 2013 at Mineral Park was impacted by additional maintenance downtime taken to: re-install the recently repaired natural gas turbine (which, since its reinstallation, has been exceeding expectations), and to reconfigure the SAG mills and pebble handling system. Additionally, as planned, the Company mined through harder sections of the mineral deposit while completing the dewatering of the Ithaca pit. Completion of these tasks has permitted mining in the Ithaca pit to resume in the second quarter of 2013. Now that is has been dewatered, ore from the Ithaca pit, which has higher copper grades than the other areas being mined, has provided, and is expected to continue to provide, additional blending options for the various ore types at the mine.
Outlook for 2013
With the recent increases in throughput rates and mining flexibility, the Company expects second quarter 2013 production to improve over the first quarter. Mineral Park is on track to produce between 93.0 million to 102.0 million pounds of copper equivalent(i) production in 2013, which includes 41.5 million to 46.5 million pounds of copper (38.5 million to 42.5 million pounds copper in concentrates and 3.0 to 4.0 million pounds of copper cathode copper), 11.0 to 12.0 million pounds of molybdenum and 0.6 million ounces of silver.
Adoption of Advance Notice Policy
The Company also announces the approval and adoption by its Board of Directors (the "Board") of an advance notice policy (the "Policy"). The purpose of the Policy is to provide shareholders, directors and management of the Company with a clear framework for nominating directors of the Company and to ensure all shareholders have the time and information to consider the directors being nominated. The Policy fixes a deadline by which director nominations must be submitted to the Company prior to any annual or special meeting of shareholders and sets forth the information that must be included in the notice to the Company for the notice to be in proper written form in order for any director nominee to be eligible for election at any annual or special meeting of shareholders.
It is the position of the Board that the Policy is in the best interests of the Company, its shareholders and other stakeholders. The Policy will be subject to an annual review by the Board, which shall revise the Policy if required to reflect changes by securities regulatory authorities or stock exchanges, and to address changes in industry standards from time to time as determined by the Board.
The Company is committed to: (i) facilitating an orderly and efficient process for holding annual general meetings and, when the need arises, special meetings of its shareholders; (ii) ensuring that all shareholders receive adequate advance notice of the director nominations and sufficient information regarding all director nominees; and (iii) allowing shareholders to register an informed vote for directors of the Company after having been afforded reasonable time for appropriate deliberation.
The Policy, among other things, includes a provision that requires advance notice to the Company in certain circumstances where nominations of persons for election to the Board of Directors are made by shareholders of the Company. The Policy fixes a deadline by which director nominations must be submitted to the Company prior to any annual or special meeting of shareholders and sets forth the information that must be included in the notice to the Company.
In the case of an annual meeting of shareholders, notice to the Company must be made not less than 30 days and not more than 65 days prior to the date of the annual meeting; provided, however, that, in the event that the annual meeting is to be held on a date that is less than 50 days after the date on which the first public announcement of the date of the annual meeting was made, notice may be made not later than the close of business on the 10th day following such public announcement.
In the case of a special meeting of shareholders called for the purpose of electing directors (whether or not called for other purposes), notice to the Company must be made not later than the close of business on the 15th day following the day on which the first public announcement of the date of the special meeting was made.
The Policy is effective and in full force as of the date that it was approved by the Board. Pursuant to the terms of the Policy, the Policy will be put to the shareholders of the Company at the next annual general meeting of shareholders. If the Policy is not ratified and confirmed by the shareholders at that time, the Policy will terminate and be of no further force and effect following the termination of the annual general meeting.
(i)Copper equivalent production
All references to copper equivalent production for 2013 is calculated using a molybdenum/copper ratio of 4.65, based on the Company's beginning of year estimated 2013 metals prices, including adjustments for copper hedging.
Quality Assurance/Quality Control
Gary Simmerman, BSc Mining Eng, FAusIMM, Mercator's VP Mineral Park, a "Qualified Person" as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators ("NI 43-101"), supervised the preparation of and verified the Mineral Park technical information contained in this release.
About Mercator Minerals Ltd.
Mercator Minerals Ltd., a TSX listed ("ML") 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.
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 as defined in 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 not 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 has been prepared under the supervision of, and its disclosure has been reviewed by Gary Simmerman, BSC, Mining Eng., FAusIMM, Mercator's Vice President, Mineral Park, who is a Qualified Person as defined under NI 43-101.
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 goals, positioning, future plans, projections, objectives, estimates and forecasts and statements as to management's expectations with respect to, among other things, the size 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, and (4) any additional financing needed will be available on reasonable terms. 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 "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, 2012 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.
Mercator Minerals Ltd.
Bruce McLeod. P.Eng.
President & CEO
Mercator Minerals Ltd.
David Jan, CA
Head of Investor Relations & Communications