Mercator Minerals Ltd MLKKF

300% vs. 80%

[24~Karat]

Excerpted below, from 321Gold, is an extraordinarily interesting comparison between typical margins of both gold and copper producers.  Of course, unlike the typical  copper producer that is cited below, Mercator Minerals will produce at a cost factor near 0.81 per pound, plus in addition, has  its much larger molybdenum credits!

 

“Compare copper producer A to gold producer B who for this example sells gold today for $900 per ounce and profits $400 or around 80% for every dollar invested to lift gold. The copper producer sells copper for $4.00 per pound and profits around $2.80 or almost 300% for every dollar invested to lift copper. Gold would need to trade at over $2,000 an ounce today to give the same return not to forget that gold producers usually trade at higher earnings multiples. Furthermore most major gold producers are lucky to have 10 years of proven reserves while many copper producers have in excess of 20 years of proven reserves in the ground. Even if copper prices crashed in half they would still make an almost 100% margin from lifting costs. Copper producers should in the course of the next quarters start to reflect the reality that the implied forward price curve will likely not be $1.30-$1.40 and more closely reflect the long term estimates of already very conservative analysts in the $1.80 and climbing range. Why?”

https://www.321gold.com/editorials/kovacevic/kovacevic071208.html