Mercator Minerals Limited an operator of an Arizona mine may wait for copper prices to rise before securing financing to build its El Pilar project.

Mr Bruce McLeod CEO of the Vancouver based company said that “There is debt available to the project today it’s just not on terms that I think our shareholders would be enamored with. The hedging component at these prices would be too high for us to consider.”

He said that Mercator will study a range of options to fund the project including combinations of debt finance, off take agreements, potential partnerships and profits from the Mineral Park mine in Arizona. The El Pilar project will more than double Mercator’s annual copper output when production begins at the mine. Mercator aims to expand into intermediate base-metals production by 2015.

Mr McLeod said that debt financing for El Pilar would be more attractive with copper prices around USD 3.80 a pound. The company won’t finance the project using equity at current valuations.

The El Pilar project in northern Mexico may produce an average of 73 million pounds of copper a year, according to a feasibility study published on September 27th 2011. The mine may cost USD 245 million. The company said on November 17th 2011 it had arranged USD 20 million private placement. The funds will be used to prepare the project for construction when financing becomes available.

Mr McLeod said that Mercator expects to produce 43 million pounds of copper and 7 million pounds of molybdenum this year at Mineral Park and will ramp up to 55 million pounds and 10 million pounds respectively in 2012. The company also owns the El Creston molybdenum and copper project in Mexico and will complete a feasibility study in the Q1 of 2012.

(Sourced from Bloomberg.net)