Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr
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NEWS-LEADING DEVELOPMENTS publish the update earlier; however, we have had to correct a number of acquired technical and logistical shortcomings, so it is taking slightly longer than anticipated. Nevertheless, our priority is to make sure this project is positioned to allow its development to proceed in accordance with our exacting standards." Intergeo and Mercator Plan Cu-focused Base Metals Company Intergeo MMC Ltd. and Mercator Minerals announced in mid-December an agreement to combine their businesses to create a copper-focused base metals company with a robust growth profile and strong financial backing. Intergeo is a diversified Russian company primarily focused on developing, exploring and acquiring base metal properties in Russia. The company is 99% owned by Daselina, a part of ONEXIM Group, which is an investment vehicle owed by Russian billionaire Mikhail Prokhorov. Intergeo's key development project is its Ak-Sug copper porphyry deposit in southern Siberia. Mercator Minerals owns and operates the Mineral Park copper-molybdenum-silver mine in northwest Arizona. The company also has two development projects in Sonora, Mexico: the El Pilar copper heap leach project and the El Creston molybdenum-copper property. As part of the agreement, Daselina will invest $100 million in the combined company, with $50 million of the total earmarked for stabilizing and improving operations at the Mineral Park mine. Following closure of the transaction, existing Intergeo shareholders will own approximately 85% and existing Mercator shareholders will own approximately 15% of the outstanding shares of the combined company. The company will be renamed Intergeo Mining Ltd. and will retain Mercator's listing on the Toronto Stock Exchange. The companies expect the transaction to close during the second quarter of 2014. John Lill, current president and CEO of Intergeo MMC, will be CEO and a director of Intergeo Mining. Lill has previously served as CEO of FNX Mining, COO of BHP Billiton Base Metals, executive vice president of Dynatec Corp., vice president of Operations for Rio Algom, and senior vice president of U.S. Operations for Barrick Gold. Regarding the Intergeo/Mercator combination, Lill said, "The entire Intergeo organization and its owners are very excited by the potential of a combination with Mercator Minerals' Mineral Park mine, shown here, is located in northwestern Arizona, approximately 120 miles southeast of Las Vegas, Nevada. Mercator will merge its assets with Intergeo, a Russian company, which owns the Ak-Sug copper deposit in Siberia. 6 E&MJ; • JANUARY 2014 Mercator. We believe there are tremendous opportunities to create value based on a well-funded business plan for Mineral Park and the combined portfolio of world-class development properties in El Pilar and Ak-Sug. We intend to focus our efforts initially on optimizing Mineral Park, bringing El Pilar to production, and then developing Ak-Sug in a financially disciplined manner. We have assembled a highly experienced management team and board of directors to execute our vision." Primero Mining Acquiring Brigus Gold Primero Mining and Brigus Gold entered into an agreement in mid-December whereby Primero will acquire Brigus in an all-share transaction valued at about C$220 million. Each company has a single producing mine. Primero's San Dimas mine in Durango state, Mexico, produced about 100,000 oz of gold and 5.8 million oz of silver in 2013; Brigus' Black Fox mine in Ontario, Canada, produced about 100,000 oz of gold in 2013. The companies expect combined total production from the two mines in 2014 to be in the range of 250,000 to 270,000 gold equivalent oz. The companies' development projects include Primero's Cerro del Gallo project in Guanajuato state, Mexico, and Brigus' Grey Fox project 4 km from its Black Fox mine in Ontario. These projects provide the potential for production from the combined company to grow to about 400,000 gold equivalent oz/y by 2017. Brigus' interests in the Goldfields project in Saskatchewan and the Ixhuatán and Huizopa projects in Mexico will be spun-off into a new company that will be capitalized with approximately C$10 million in cash. The proposed transaction requires approval by at least two-thirds of the votes cast by Brigus shareholders at a special meeting. The issuance of Primero common shares in connection with the proposed transaction will require the approval of a majority of the shareholders of Primero voting at a special meeting. Goldcorp, which holds approximately 27% of the outstanding Primero common shares, has agreed to vote in favor of the proposed transaction. Assuming completion of the transaction, Primero shareholders and Brigus shareholders will own approximately 73.4% and 26.6%, respectively, of Primero. www.e-mj.com