Mercator Minerals Ltd MLKKF

RE: RE: holding tight

[LongonZinc]

If copper breaks below $3 and moly stays below $14 they will likely be operating in the red (negative cash flow- For those who holding on to shares I recommend taking a good look at the new way they are calculating cash costs and cash flows from operations as it is now less inclusive of overall cash costs). In the short term you will also have negative copper settlements aftecting Q2 cash flows. Remember they sell at spot prices and cover there hedge on the open market. When you consider the potential for short-term negative cash flows and a moderate amount of debt due in the near term, things look rather bleak for ML.  Remember, they need to pay up that debt, meet production and throughput requirements, avoid cash sweep provisions, while maintaning a minimum cash balance in the bank...when they restructured their near-term debt from the last cash sweep they took on restrictions that limited taking on future debt and disposing of assets.  I have been saying for months that I think they will need additional financing to maintain their current operations and sufficient cash balance, this IMO means a private placement.  That IMO is why there has been especially high downward pressure on the sp. This is all coupled with a nasty market for the mining sector.