VANCOUVER, April 12 /CNW/ -- VANCOUVER, April 12 /CNW/ - Mercator
Minerals Ltd. (TSX: ML) ("Mercator") and Creston Moly Corp. (TSXV:
CMS) ("Creston") are pleased to announce that they have entered
into a definitive arrangement agreement pursuant to which Mercator
will acquire all the outstanding common shares of Creston by way of
a plan of arrangement. Under the plan of arrangement, shareholders
of Creston will receive 0.15 of a common share of Mercator and
$0.08 in cash, in respect of each common share of Creston. This
represents an implied premium of 43% and 40% based on each
company's closing price and 20-day volume weighted average share
price, respectively, as at April 8, 2011 (the last full day of
trading for Creston prior to announcement). The proposed
transaction values Creston at approximately C$195 million. The
board of directors and management of the combined company will draw
from the expertise of both companies. Mr. Gavin Thomas will
continue as Non-Executive Chairman. Mr. Bruce McLeod (current
President and CEO of Creston) will become President and CEO of the
combined company. Mr. Michael Surratt (current President and
CEO of Mercator) will continue to work with the combined company,
on a consultancy basis, as Technical Advisor to the President and
CEO. Mr. Mark Distler will continue in his current role as
CFO of the combined company. The combined board of directors
will be comprised of Gavin Thomas (Non-Executive Chairman), Bruce
McLeod (President and CEO), Colin K. Benner, Joseph Keane, Stephen
Quin, Robert Quinn, Ron Vankoughnett and one additional independent
director to be appointed at a future date. Creston owns a 100%
interest in El Creston, an advanced development-stage moly-copper
project located in Sonora, Mexico. El Creston has a Measured
and Indicated resource of 336 million pounds of molybdenum and 281
million pounds of copper which will increase Mercator's Measured
and Indicated molybdenum resource by 85% to 732 million pounds
(141% and 956 million pounds including Creston's Moly Brook and
Ajax projects) and its Measured and Indicated copper equivalent
resource by 38% to 7,781 million pounds (62% and 9,098 million
pounds including Creston's Moly Brook and Ajax projects).
Creston recently completed a preliminary economic assessment on the
El Creston project which indicated robust economics based on a
molybdenum and copper price of US$15.00/lb and US$2.60/lb,
respectively (vs. current spot molybdenum and copper prices of
US$17.10/lb and US$4.38/lb). The project is expected to
generate average annual production of approximately 24 million
pounds of molybdenum and approximately 16 million pounds of copper
over a 13 year mine life. The preliminary economic assessment
indicated an after-tax NPV(8%) of over US$560 million and an IRR of
approximately 22%. Mr. Michael Surratt, current President and CEO
of Mercator, stated: "By adding a world-class development asset
like El Creston to our portfolio, we are establishing an attractive
and continuous growth pipeline commencing with the Phase II
Expansion at Mineral Park in July 2011, followed by the development
of El Pilar in 2012 and then El Creston in 2013. We see this
as a significant first step towards creating a strong intermediate
base metals company with an attractive growth profile. Bruce
McLeod is well known to the capital markets and has a proven track
record of creating shareholder value. I am excited that he
has agreed to take the combined company to the next stage in its
evolution." Mr. Bruce McLeod, current President and CEO of Creston,
stated: "The proposed transaction delivers an immediate and
significant premium to our shareholders. Moreover, it
provides our shareholders with the opportunity to participate in
the enormous growth potential of the combined portfolio of
producing and development assets. This transaction will
create a significant copper-moly company with an industry-leading
growth profile and the management resources, capital markets
profile and access to capital necessary to realize on the full
potential of its portfolio. I am excited by the prospects we have
ahead of us and I look forward to continuing to create shareholder
value for the combined shareholder base in my new role." The board
of directors of Mercator would like to recognize and express
its gratitude to Mr. Surratt for his years of service to Mercator.
Under Mr. Surratt's leadership, Mercator has assembled one of the
most experienced operating teams in the industry, completed the
acquisition of a major copper development project in El Pilar and
grown the Mineral Park mine from a small copper heap leach
operation in 2003 into one of the largest new mines in North
America. While Mr. Surratt has decided to retire from the position
of President and CEO, the board is pleased that he has agreed to
continue in a consulting capacity to the new President and CEO,
where his experience will benefit the operations at Mineral Park as
well as the development activities at Mercator's two Mexican
projects. Transaction Details The proposed transaction will be
carried out by way of a plan of arrangement, the implementation of
which will be subject to approval by at least 66 2/3% of the votes
cast at a special meeting of Creston shareholders that is expected
to be held in mid to late June 2011 followed by and subject to the
approval of the Supreme Court of British Columbia. Pursuant
to the terms of the arrangement agreement between Mercator and
Creston, the proposed transaction is also subject to applicable
regulatory approvals and the satisfaction of certain closing
conditions customary for transactions of this nature. The
arrangement agreement also provides for, among other things,
customary board support and non-solicitation covenants from Creston
(subject to customary "fiduciary out" provisions that entitle
Creston to consider and accept a superior proposal and a 5 calendar
day "right to match" in favour of Mercator). The arrangement
agreement also provides for the payment of a termination fee of
C$5.5 million to Mercator and the payment of an expense
reimbursement fee of C$5.5 million to Creston if the proposed
transaction is not completed in certain specified circumstances.
The board of directors of Creston, after receiving the
recommendation of its special committee and consultation with its
financial and legal advisors, has unanimously determined that the
proposed transaction is in the best interests of Creston, is fair
to the shareholders of Creston, and to recommend that shareholders
of Creston vote in favour of the proposed transaction. BMO
Capital Markets, financial advisor to Creston and its board of
directors, has provided an opinion to the effect that the
consideration to be received by shareholders of Creston is fair,
from a financial point of view, to shareholders of Creston.
All of the directors and senior officers of Creston have entered
into customary voting support agreements pursuant to which, among
other things, they have agreed to vote their common shares of
Creston (representing approximately 3.2% of the outstanding common
shares of Creston) in favour of the proposed transaction. In
addition, certain other shareholders of Creston holding
approximately 8.3% of the outstanding common shares of Creston have
entered into customary voting support agreements pursuant to which,
among other things, they have agreed to vote their common shares of
Creston in favour of the proposed transaction. Upon closing,
outstanding options and warrants to purchase common shares of
Creston will entitle the holders to common shares of Mercator with
the number of common shares and/or exercise price adjusted, as
appropriate, to reflect the consideration to be received by
shareholders of Creston pursuant to the plan of arrangement. The
terms and condition for the proposed transaction will be summarized
in Creston's management information circular, which will be filed
and mailed to shareholders of Creston in early to mid May
2011. If it is approved by shareholders of Creston, it is
anticipated that the proposed transaction will be completed in late
June 2011. Copies of the arrangement agreement between Mercator and
Creston and certain related documents will be filed with Canadian
securities regulators and will be available on the SEDAR website at
www.sedar.com. The management information circular will also
be available at www.sedar.com. Advisors and Counsel Haywood
Securities Inc. is acting as financial advisor to the special
committee of the board of directors of Mercator. DuMoulin
Black LLP is acting as legal advisor to Mercator. Gowling
Lafleur Henderson LLP is acting as legal advisor to the special
committee of the board of directors of Mercator. BMO Capital
Markets is acting as financial advisor to Creston and its board of
directors. Morton & Company is acting as legal advisor to
Creston. McCarthy Tetrault LLP is acting as legal advisor to
the special committee of the board of directors of Creston.
Conference Call Mercator and Creston will hold a joint conference
call to discuss the proposed transaction at 7:00 am Pacific Time
(10:00 am Eastern Time) on Tuesday, April 12, 2011. To
participate, please use the following conference call details:
Local dial in number: (647) 427-7450 Toll-free dial in number:
(888) 231-8191 Passcode: 59407385 The call will also be webcast
live by CNW Group and can be accessed at
http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3481720.
The call and presentation can be accessed at Mercator's or
Creston's websites at www.mercatorminerals.com or
www.crestonmoly.com, respectively. The call will also be available
for replay by dialing (toll free) 1-800-642-1687 or 416-849-0833
(Passcode 59407385 followed by the number sign) for 14 days.
NI-43-101 Qualified Persons Gary Simmerman, BSc., Mercator's
VP Engineering, a NI 43-101 Qualified Person, supervised the
preparation of and verified the Mineral Park technical information
contained in this release. Mike Broch, BSc, Geology, Msc, Economic
Geology, FAusIMM, Mercator's VP Exploration, a NI 43-101 Qualified
Person, supervised the preparation of and verified the El Pilar
technical information contained in this release. Dave Visagie, P.
Geo, Creston's Exploration Manager, a NI 43-101 Qualified Person,
supervised the preparation of and verified the El Creston technical
information contained in this release. About Mercator Minerals Ltd.
Mercator Minerals Ltd. is a TSX listed mining company with an
experienced management team that has brought the mill expansion at
the Mineral Park Mine, one of the largest and most modern
copper-moly mining-milling operations in North America, to
production in less than 2 years. Mercator management is dedicated
to maximizing profits at the Mineral Park Mine and the development
of the El Pilar copper project in Mexico. About Creston Moly Corp.
Creston is a mineral exploration company focused on the exploration
and development of the El Creston Property in Sonora, Mexico, of
which the Company holds a 100% interest. Cautionary Statements The
Toronto Stock Exchange does not accept responsibility for the
adequacy or accuracy of this press release. Neither the TSX Venture
Exchange nor its Regulation Services Provider (as that term is
defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release. None
of the securities anticipated to be issued under the plan of
arrangement have been or will be registered under the Securities
Act of 1933, as amended, or any state securities laws, and such
securities are anticipated to be issued in the United States
pursuant to exemptions from such registration requirements. This
press release shall not constitute an offer to sell or solicitation
of an offer to buy any securities in any jurisdiction where such an
offer or sale would be unlawful. Information Concerning
Mineralization and Resources Unless otherwise indicated, all
resource estimates contained in this news release have been
prepared in accordance with National Instrument 43-101 Standards of
Disclosure for Mineral Projects and the Canadian Institute of
Mining, Metallurgy and Petroleum Classification System in
compliance with Canadian securities laws, which differ from the
requirements of United States securities laws. Without
limiting the foregoing, this news release uses the terms "measured
resources", "indicated resources" and "inferred resources". United
States investors are advised that, while such terms are recognized
and required by Canadian securities laws, the United States
Securities and Exchange Commission ("SEC") does not recognize them.
Under United States standards, mineralization may not be classified
as a "reserve" unless the determination has been made that the
mineralization could be economically and legally produced or
extracted at the time the reserve determination is made. United
States investors are cautioned not to assume that all or any part
of measured or indicated resources will ever be converted into
reserves. Further, inferred resources have a great amount of
uncertainty as to their existence and as to whether they can be
mined legally or economically. It cannot be assumed that all or any
part of the inferred resources will ever be upgraded to a higher
category. Therefore, United States investors are also cautioned not
to assume that all or any part of the inferred resources exist, or
that they can be mined legally or economically. Disclosure of
contained ounces is permitted disclosure under Canadian
regulations; however, the SEC normally only permits issuers to
report resources as in place tonnage and grade without reference to
unit measures. Accordingly, information concerning descriptions of
mineralization and resources contained in this news release may not
be comparable to information made public by United States companies
subject to the reporting and disclosure requirements of the SEC.
Forward Looking Information This news release contains forward
looking statements of Mercator, being statements which are not
historical facts, including, without limitation, statements
regarding the proposed acquisition of Creston by Mercator, the
potential benefits thereof, discussions of future plans,
projections and objectives, estimates, 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, future production, capital and mine production costs,
demand and market outlook for commodities, and the financial
results of the Company and discussions of future plans, projections
and objectives. 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. Important factors
that may cause actual results to vary include, but are not limited
to, certain transactions, certain approvals, changes in commodity
and power prices, changes in interest and currency exchange rates,
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
and equipment, 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. These risks are
described in more detail in Mercator's Annual Information Form.
Mercator does not assume the obligation to revise or update these
forward-looking statements after the date of this report or to
revise them to reflect the occurrence of future unanticipated
events, except as may be required under applicable securities laws.
For a more complete discussion, please refer to the Mercator's
Annual Information Form and audited financial statements and
MD&A for the year ended December 31, 2010 on the SEDAR website
at www.sedar.com. This news release also contains forward looking
statements of Creston. Forward looking statements relate to
future events or future performance and include, but are not
limited to, statements with respect to the completion of the
proposed transaction, estimation of mineral reserves and resources,
the realization of mineral reserve estimates, the timing and amount
of estimated future production, costs of production, capital
expenditures, success of mining operations, environmental risks,
unanticipated reclamation expenses, title disputes or claims and
limitations on insurance coverage. In certain cases,
forward-looking statements can be identified by the use of words
such as "plans", "expects" or "does not expect", "is expected",
"budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates" or "does not anticipate", or "believes", or
variations of such words and phrases or statements that certain
actions, events or results "may", "could", "would", "might" or
"will be taken", "occur" or "be achieved" or the negative of these
terms or comparable terminology. Forward-looking statements reflect
Creston management's expectations or beliefs regarding future
events and are based on the assumptions that the proposed
transaction will complete and that Creston's exploration and
development properties will achieve anticipated milestones and
results, and rely on Mercator's public disclosure regarding its
mineral projects. By their very nature, forward-looking statements
involve known and unknown risks, uncertainties and other factors
which may cause the actual events, results, performance or
achievements of Creston to be materially different from any future
events, results, performance or achievements expressed or implied
by the forward-looking statements. Such factors include, among
others, risks related to completion of the proposed transaction,
actual results of current exploration activities; changes in
project parameters as plans continue to be refined; future prices
of resources; possible variations in ore reserves, grade or
recovery rates; accidents, labour disputes and other risks of the
mining industry; delays in obtaining governmental approvals or
financing or in the completion of development or construction
activities; as well as those factors detailed from time to time in
Creston's interim and annual financial statements and management's
discussion and analysis of those statements, all of which are filed
and available for review on SEDAR at www.sedar.com. Although
Creston has attempted to identify important factors that could
cause actual actions, events or results to differ materially from
those described in forward-looking statements, there may be other
factors that cause actions, events or results not to be as
anticipated, estimated or intended. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. These forward-looking
statements are made as of the date of this news release and Creston
does not intend, and does not assume any obligation, to update
these forward-looking statements, except as required by applicable
law. Accordingly, readers should not place undue reliance on
forward-looking statements. To view this news
release in HTML formatting, please use the following URL:
http://www.newswire.ca/en/releases/archive/April2011/12/c3318.html
table valign="top" border="0" tr td bInvestor Relations /bbr/
br/ /td td /td td /td td /td td /td td
/td /tr tr valign="top" td align="left" Mercator Minerals
Ltd.br/ 1971 Sandown Placebr/ North Vancouver, BC, Canada V7P
3C3br/ Tel: 604-981-9661br/ Fax: 604-960-9661br/ a
href="mailto:mleblanc@mercatorminerals.com"mleblanc@mercatorminerals.com/abr/
a href="http://www.mercatorminerals.com"www.mercatorminerals.com/a
/td td /td td /td td /td td /td td
align="left" Creston Moly Corp.br/ Suite 860 - 625 Howe Streetbr/
Vancouver, BC, Canada V6C 2T6br/ Tel: 604-694-0005br/ Fax:
604-684-9365br/ a
href="mailto:info@crestonmoly.com"info@crestonmoly.com/abr/ a
href="http://www.crestonmoly.com"www.crestonmoly.com/a /td /tr tr
td br/ bMedia Contacts/bbr/ Wilcox Groupbr/ Tel: 647-707-9009br/ a
href="mailto:mwilcox@wilcoxgroup.com"mwilcox@wilcoxgroup.com/a /td
td /td td /td td /td td /td td
/td /tr /table p /p
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