TRADING SYMBOL: TSX - ML
VANCOUVER, Nov. 12 /CNW/ - Mercator Minerals Ltd. ("Mercator") (TSX: ML) today announced that it that it has mailed its offering circular and related documents to Tyler shareholders and has filed with securities regulators in Canada its formal offer for all of the outstanding common shares of Tyler Resources Inc. The offer to Tyler shareholders will remain open until 8:00 p.m. (Toronto time) on December 17, 2007, unless the offer is withdrawn or extended by Mercator. Under the terms of the offer, Tyler shareholders will be entitled to receive 0.113 Mercator common shares for each Tyler common share tendered and taken up by Mercator.
Based on Mercator's closing share price of C$9.80 on October 18, 2007, the day prior to announcing the intention to make an offer, the share consideration represents a premium of approximately 50% over Tyler's closing share price on October 18, 2007 and over Tyler's volume weighted average share price on the TSX Venture Exchange for the 20 trading days ended October 18, 2007.
Commenting on the transaction, Mike Surratt, President and Chief Executive Officer of Mercator said "We believe the proposed combination makes tremendous geographic and strategic sense and is a creative way to unlock value for all shareholders involved. Mercator's highly experienced development, financing and operations teams have the capability to realize and maximize the potential value of the Bahuerachi project. Given current economic forecasts, the Mineral Park mine is expected to generate sufficient cash to fund the construction of most of Bahuerachi project with little or no additional equity issuance."
The prospect for development of Bahuerachi subsequent to Mineral Park, with little or no equity, sets the stage for a new mid tier base metal producer with growing resource and production base."
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The proposed combination of Mercator and Tyler would offer the following
direct and immediate benefits and opportunities to Tyler's existing
shareholders:
- A significant increase in share price, based on the offered exchange
ratio of 0.113
- Exposure to current copper production and cash flow from Mineral Park
- Participation in the forecast rapid growth in molybdenum and copper
production at Mineral Park
- Exposure to a highly-experienced mine financing and mine building
team
- Reduced risk in the development, financing and construction of
Bahuerachi
- The potential for development of Bahuerachi with little or no equity
dilution
Furthermore, the combined entity would become a rapidly growing mid-tier
base metals producer, while having:
- Well structured and financed company
- Full scale production of molybdenum and copper at Mercator's Mineral
Park Project by 2009
- Attractive resource base to underpin growth
- Experienced corporate and operational management
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To complete the transaction, Mercator would issue approximately 15 million new common shares to Tyler shareholders, assuming all of the outstanding shares of Tyler are tendered and assuming the conversion or exercise only of the currently outstanding options, warrants or other convertible securities of Tyler. On an issued basis, the pro rata shareholdings are anticipated to be approximately: 83% existing Mercator shareholders and 17% existing Tyler shareholders.
The bid is subject to a number of conditions, including without limitation absence of adverse material changes, receipt of all necessary regulatory approvals and a minimum of 66 2/3% of Tyler shares (on a fully diluted basis) being tendered.
Tyler's shareholders are strongly encouraged to read the terms and conditions of our Offer and the additional information in the Offer and Circular mailed on November 9, 2007 and filed on SEDAR.
Jennings Capital Inc. is acting as financial adviser to Mercator.
About Mercator Minerals Ltd.
Mercator is a copper producer that owns and operates the Mineral Park copper mine in Arizona, with a corporate strategy focused on maximizing the production potential of the Mineral Park copper-molybdenum deposit and growing through mergers and acquisitions. The Company has filed a technical report dated December 29, 2006, supporting the expansion of its Mineral Park copper-molybdenum mine into a 25,000 tpd operation (Phase I) and a 50,000 tpd operation (Phase II). At full capacity, expected to be reached mid 2009, the Mineral Park mine average annual production during the first 10 years is forecast to be approximately 56.4 million pounds of copper, 10.3 million pounds of molybdenum and 600,000 ounces of silver.
On Behalf of the Board of Directors
MERCATOR MINERALS LTD.
Per: "Michael L. Surratt"
Michael L. Surratt,
President
US Share Holders
No Mercator shares will be delivered in the United States or to or for the account or for the benefit of a person in the United States, unless Mercator is satisfied that such Mercator shares may be delivered in the relevant jurisdiction in reliance upon available exemptions from the registration requirements of the U.S. Securities Act of 1933, as amended, and the securities laws of the relevant U.S. state or other local jurisdiction, or on a basis otherwise determined to be acceptable to Mercator in its sole discretion. Ineligible Tyler shareholders who would otherwise receive Mercator shares in exchange for their Tyler shares may, at the sole discretion of Mercator, have such Mercator shares issued on their behalf to a selling agent, which shall, as agent for such Tyler shareholders, sell such Mercator shares on their behalf over the facilities of the TSX and have the net proceeds of such sale, less any applicable brokerage commissions, other expenses and withholding taxes, delivered to such Tyler shareholders.
The offer is being be made for the securities of a Canadian issuer and by a Canadian issuer that is permitted to prepare the offer and circular in accordance with the disclosure requirements of Canada. Shareholders should be aware that such requirements are different from those of the United States. The financial statements included or incorporated by reference in the offer and circular have been prepared in accordance with Canadian generally accepted accounting principles, and are subject to Canadian auditing and auditor independence standards, and thus may not be comparable to financial statements of United States companies.
The enforcement by shareholders of civil liabilities under the United States federal securities laws may be affected adversely by the fact that Mercator is incorporated under the laws of Canada, that some or all of its officers and directors may be residents of jurisdictions outside the United States, that some or all of the dealer managers for the offer and some or all of the experts named in the offer and circular may be residents of jurisdictions outside the United States and that all or a substantial portion of the assets of Mercator and said persons may be located outside the United States.
You should be aware Mercator may purchase securities otherwise than under the offer, such as in open market or privately negotiated purchases.
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 Tyler by Mercator, the potential benefits thereof and discussions of future plans, projections and objectives. There can be no assurance that such statements will prove accurate. Such statements are necessarily based upon a number of estimates and assumptions that are subject to numerous risks and uncertainties that could cause actual results and future events to differ materially from those anticipated or projected. Important factors that could cause actual results to differ materially from Mercator's expectation are in the documents filed by Mercator from time to time with the Toronto Stock Exchange and provincial securities regulators, most of which are available at www.sedar.com. Mercator disclaims any intention or obligation to revise or update such statements.
The following factors, among others, related to the proposed acquisition of Tyler, the potential benefits thereof and future plans, projections and objectives could cause actual results of developments to differ materially from the results or developments expressed or implied by forward looking statements: the Mercator shares issued in connection with the offer may have a market value lower than expected; the businesses of Mercator and Tyler may not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected; the expected combination benefits from the acquisition of Tyler may not be fully realized by Mercator or may not be realized within the expected time frame; Mercator cannot determine the number of Tyler shareholders who may accept the Tyler offer; Mercator may not acquire one-hundred percent of the shares of Tyler; and the possible delay in the completion of the steps required to be taken for the acquisition of Tyler and the ultimate combination of Mercator and Tyler.
The Toronto Stock Exchange does not accept responsibility for the
adequacy or accuracy of this press release.
For further information: Marc LeBlanc, VP Corporate Development and Corporate Secretary, Tel: (604) 981-9661 or (604) 716-5582, Fax: (604) 960-9661, Email: mleblanc@mercatorminerals.com
