Mercator Minerals Ltd MLKKF

RE: RE: $200 million Capex for Stingray's

[ThaiDiamond]

Great points RM.  Both your and furthur elaboration by Way2Gosh make the case quit well.

Essentially, ML is buying 1.4 billion pounds of copper for 2 cents/lb for in-the-ground metal.  That's an excellent price.

Typically porphyry copper deposits in Arizona go for some 5 cents for in-situ resources.

If one's view for the long term demand for the red metal is bullish, getting such a significant bump in resources for such a insignificant dilution of 8% is more than an excellent move. Long term, it could pay off in spades.

Funding is already provided for ML's 50,000 tpd expansion at Mineral Park with its cash in hand.  Subsequent funding for El Pilar will almost certainly be generated by the increased production at Mineral Park. Particularly as it looks that copper should stay north of well north of $2 bucks and moly north of a tenner.

And it's hardly odd the Peter Mordaunt becomes COO. First, it goes a long way to explain why the deal is being done. Secondly, juniors are all about people. And with people you want talent; something Peter brings to the table in spades.

And while Telemarket would be wise to go over ML most recent MD&A thoroughly, he's right about one thing: lose the caps RM. Shouting is not a great internet decorum. And your posts speak well enough by themselves...at least the few I've read.

This too may be of interest...from SRY's most recent MD&A:

CONTRACTUAL OBLIGATIONS AND COMMITMENTS

(a) Issue of Shares In Connection With the Acquisition Of Subsidiary

On April 27, 2007 the Corporation completed a Share Purchase Agreement(“Agreement”) with Xstrata plc (“Xstrata”) to acquire all of the issued and outstanding shares of 4394895 Canada Inc. and 4394909 Canada Inc.which collectively held a 100% interest in the share capital of Noranda Exploration Mexico S.A. de C.V. (“Normex”). Normex owned a 100%interest in the El Pilar property and several other properties within Mexico.

In addition to the initial purchase price, the Agreement also provided for an additional 5% of the outstanding shares to be issued to Xstrata upon delivery of a positive feasibility study,a sliding scale metal sales royalty starting at 1% to a maximum of 3%and a 50% Back-In Right for Xstrata exercisable under certain conditions.

The positive feasibility study was completed on April 27, 2009. The Corporation will be issuing an additional 1,829,837shares at a price of $1.20 per share, for a consideration of $2,195,804to Xstrata Canada Corporation in accordance with the Agreement.

The recent completion of a positive Feasibility Study for El Pilar was the "event" that triggered Stingray issuing of shares to Xstrata.

Also Xstrata also have back in rights up to 50% "under certain conditions"...though it doesn't say what those conditions are. Xstrata also enjoy a NSR on future El Pilar production.

That's a Q I've put to management of both companies. If I get anything relevant, I'll pass it along.