Copper producer Mercator Minerals Ltd. had fallen 79% this year, said a Bloomberg report. The slump in sales would lead to a possible sale or merger, said the same report. The company had hired BMO Capital Markets to advice on a potential merger or sale after the company deferred debt payment on its Arizona mine.
A special committee that included three board members was organized to consider the sale. The special committee would also consider the sale of some of Mercator assets. This was according to a statement issued by Mercator today. The company also said that a number of interested parties proposed non-binding offers for Mercator.
This year, copper futures had declined by 28% on the London Metal Exchange following the slow growth of the copper industry in China. Molybdenum, a metal used in steel alloy manufacturing, accounted for almost half of the sales of Mercator, according to a Bloomberg report. The report went on stating the demand for the metal used in steel alloys had also declined which caused Mercator's sales to slump.
Raymond James Ltd. analyst Adam Low said in a phone interview today, "With metal prices dropping a little bit and the operating costs continuing to be fairly high it's really squeezed their margins."
Mercator shares fell 4.6% to CAD.105 at the trading close in Toronto.
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