Mercator Minerals Ltd MLKKF

RE: MD&A

[ElJ]

I found a number of interesting items in the two main SEDAR reports of May 15, 2009   

1. I raise a question to the board..... can someone explain the Q1 revenue for Mercator Molybdenum which is identified at $0.387 million ? .........  In pricing the identified Q1 Moly production of 94,094 pounds it would appear to me that not all the Molybdenum was shipped or included in revenue......... market price of molybdenum was at approx. $8.85 per pound  and (I quote) 
"The Company’s molybdenum concentrate sales are recognized at world wide oxide prices less

the greater of $2.50 per pound of molybdenum or 11% of market value at the time of delivery to the buyer. Concentrate sales are FOB mine site."

2. The Freight, Smelting and Refining costs in Q1 of $1.534 million are interesting costs detail as is the $8.86 million for Mining and Processing under the Q1, 2009 production volume circumstances......the Q2, 2009 costs in these areas will be very interesting as efficiencies settle-down.

3. I anticipate revenues of over $25 Million in Q2, 2009 at current commodity prices, (assisted as revenues will be by copper settlement in Q2 for shipments in Q1 ....recall that the average CU price in Q1, 2009 was  at $1.57).  Unless there is a quite a significant increase in moly and copper commodity prices during the next 6 weeks I anticipate that Mercator will have negative earnings in Q2, 2009 and that the EBITDA issue will re-emerge, though the company is positioned with recently-raised cash to handle such a situation.

I anticipate earnings to be finely balanced with a somewhat small pos. leaning under steady production state by Q3, 2009 at current commodity prices,  but clearly significant upward leverage to share price on moly and copper price increases,

Peace,
Good Decision-making to All,
ElJ