Mercator Minerals Ltd., a copper and molybdenum producer in Arizona, rose the most in six months after two shareholders said they want to reconstitute the board for its “failings.”
Boston-based Geologic Resource Partners LLC and Pala Investments Holdings Ltd. of Switzerland, which own a total of 24.4 percent of the Vancouver-based Mercator, said in an e- mailed statement that they had lost confidence in the capabilities of the board and management. They cited restatements of second and third quarter earnings last year and disappointing forecasts for 2011.
“These are just the latest in series of examples of the failings of the existing board and management,” said the statement by George Ireland, chief investment officer of Geologic Resources and Colin Murray, Vice President of Operations for Pala.
Mercator rose 36 cents, or 10.1 percent, to $3.92 at 2:40 p.m. in Toronto Stock Exchange trading after earlier touching $3.93, the most since Sept. 13. The shares lost 10.3 percent this year before today.
Calls to CEO Mike Surratt and company spokesman Marc LeBlanc were not immediately returned to Bloomberg News.
“We were advised by the board that our suggestion was rejected,” Ireland said in a telephone interview from Hong Kong. He said he could not say which members should be replaced, nor their replacements. Other shareholders were told of their opposition and were not solicited to join them, Ireland said.
Copper Production Rising
Mercator operates the Mineral Park mine, located about 75 miles southeast of Las Vegas. Copper production this year is forecast to rise to 45 million pounds from 32 million pounds in 2010 and molybdenum production is to reach 6 million pounds compared with 4.3 million pounds last year, the company said in a statement March 8.
Ireland and Murray said they were “extremely disappointed with the financial and share-price performance of Mercator.” They plan to withhold their votes on the management slate of board nominees proposed for re-election at the next annual general meeting, whose date remains unclear, according to Bloomberg data and the company website.
Mercator, like larger competitors Thompson Creek Metals Co. Inc. and Freeport McMoRan Copper & Gold Inc., is racing to tap molybdenum deposits to exploit a fivefold surge in prices since 2003. The metal, used to toughen steel for drill bits and pipelines, is in increasing demand as crude oil trades near record levels.
Mineral Park has been operating since 1963, and was bought by Mercator in 2003 from Equatorial Mining Ltd., which is now part of Antofagasta Plc.
Mercator’s other projects include the $209 million El Pilar copper project in Mexico near the Arizona border, and the 116,000-acre (47,000-hectare) Elephant 8 concession along the Sierra Madre mountains in northwestern Mexico. Exploration there has been thwarted by personal safety risks, the company said.
