(Adds delisting review, detail on company's results.)
TORONTO Aug 26 (Reuters) - Small base metals miner Mercator Minerals Ltd said on Tuesday it had filed for protection from its creditors in Canada and the United States, and the Toronto Stock Exchange suspended trading of its shares and began a delisting review.
The Vancouver-based company, which was hurt by a 2013 drop in copper and molybdenum prices and problems at its Mineral Park copper mine in Arizona, warned last week that it could be forced to file for creditor protection.
On Tuesday, Mercator said it had filed a notice of intention to make a proposal under the Canadian Bankruptcy and Insolvency Act, the first stage of a restructuring process that could avert bankruptcy and possibly provide some compensation for creditors.
Four subsidiaries have also filed Chapter 11 bankruptcy petitions in the United States.
An agreement to sell the company to Intergeo MMC, owned by Russian tycoon-turned-politician Mikhail Prokhorov, fell apart in July after the Russian Federal Anti-Monopoly Services said it needed more time to review the deal.
Mercator, which also has two base metals projects in Mexico, said it is still actively considering a sale and other alternatives. It said it received proposals its board felt would be in the best interests of all stakeholders, but a syndicate of lenders under its Mineral Park credit facility "did not constructively engage."
Last year the drop in base metals prices coupled with operational challenges at Mineral Park, where mining moved into a section of harder ore, stretched Mercator's balance sheet and led to deep cost cutting that hurt production.
Higher prices for its minerals and lower costs improved Mercator's results in the second quarter of 2014, but not enough to fully repair its balance sheet.
Cash flow from operations was $8.4 million, but Mercator had already missed $17.9 million worth of debt principal payments due in 2013 and 2014. As of June 30 it had $9.2 million in cash and equivalents. (Reporting by Allison Martell; Editing by Franklin Paul and Paul Simao)