Mercator tools up Mineral Park mine (August 01, 2005)

Vancouver — With an eye to expanding copper production at its Mineral Park mine in northwestern Arizona, Mercator Minerals (ML-V) has ponied up for a used milling circuit.

The 18,000-tonne-per-day process mill cost US$6 million and comes with spare parts. Mercator partially funded the acquisition by collateralizing existing mining equipment through a US$3-million lease-back arrangement.

The company is studying the feasibility of restarting milling at Mineral Park to produce copper-molybdenum concentrates, and further expanding heap-leach and solvent extraction-electrowinning (SX-EW) operations.

The “mine-for-leach” operations resumed in 2004 and produced about 3.6 million lbs. of cathode copper last year. First quarter copper production this year came in at 1.3 million lbs.

The additional milling circuit forms the backbone of the company’s goal of attaining annual copper production of 20 million lbs. by 2006.

Mercator believes the mill’s daily throughput can be boosted up to 35,000 tonnes with minor modifications. The increase is achievable owing to Mineral Park’s ore being significantly softer than that previously run through the mill. A molybdenum circuit is also proposed.

The company recently raised $15 million to acquire a mining fleet, repay debt and fund the current feasibility study.

Proven and probable oxide reserves at Mineral Park stand at 77 million tonnes grading 0.24% copper. Almost 181,000 tonnes (about 400 million lbs.) of copper has been outlined using a 0.44-to-1 strip ratio, 0.12% copper cutoff grade and US$1 per lb. metal price.

The open-pit Mineral Park mine has produced copper since the mid-1960s under a number of operators.

Mineralization is typical copper-molybdenum porphyry, with a quartz-monzonite stock intruding a schist and granitic basement complex.

Mercator bought the producing Mineral Park copper mine from Aussie-listed Equatorial Mining in mid-2003 for 4.6 million shares plus 5% of net operating proceeds capped at US$2.72 million.

With 44 million shares outstanding, Mercator posted a $29-million market capitalization at its recent trading level of 65 per share.