Struggling Vancouver-based copper producer Mercator Minerals (TSX:ML) was acquired December 12 by Intergeo MMC Ltd., a mining firm run controlled by Russian billionaire Mikhail Prokhorov.
According to a Mercator press release, Intergeo’s controlling shareholder Daselina Investments Ltd. will provide a US$100 million investment to the new company – $14 million of which will go to Mercator’s Mineral Park mine to fund operations in the short-term.
Intergeo pursued the deal because it wanted to obtain a Canadian listing. The company cancelled an initial public offering in Canada last year.
Intergeo owns, among other deposits, the Ak-Sug copper project in southern Siberia, a deposit with about 3.4 million pounds of copper and an expected mine life of 25 years.
Mercator’s projects include the Mineral Park copper-molybdenum-silver mine in Arizona, as well the El Pilar and El Creston deposits in Mexico.
According to a Mercator press release, Intergeo’s John Lill will run the new company. The board of directors will include eight representatives from Intergeo and one Mercator director.
“We are very pleased to be announcing this transaction today. It is the result of a comprehensive process undertaken to evaluate the strategic alternatives available to the company and we believe it represents the most compelling opportunity for Mercator,” said Bruce McLeod, President and CEO of Mercator.
Mercator’s stock plunged over the last year, from a high of $0.64 to a low of $0.04.
In addition to controlling Intergeo, Prokhorov also owns the National Basketball Association franchise the Brooklyn Nets.
@SeanKolenko
