(Adds delisting review, detail on company's results.)
TORONTO Aug 26 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
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
(Reporting by Allison Martell; Editing by Franklin Paul and