Mercator plans to raise $7.8 million

A $7.8-million public share offering is being planned by Mercator Resource (ASE), following its recent acquisition of all the outstanding shares of Arimetco, a U.S. company. Mercator previously issued 22 million shares worth nearly $16.5 million to acquire all the shares of Arimetco. Roy Shipes, president of Mercator, says the company recently entered into an underwriting agreement with Walwyn, Stodgell, Cochran, Murray Ltd., to sell common shares and warrants worth $7,875,000. The proceeds of the offering will be used to construct a solvent extraction and electrowinning plant at the company’s Yerington mine in Nevada and the Johnson mine in Arizona, he said.

A preliminary prospectus for the share offering is expected to be filed with regulatory authorities during February, he added.

Based in Tucson, Ariz., Shipes and his family members control about 91.6% of Mercator’s 24.8 million outstanding shares. At a recent meeting of Mercator directors, it was agreed to consolidate the company’s outstanding common shares on a 3-for-1 basis and to change the company’s name to Arimetco International.

The company also recently completed a private placement of two million units, each unit consisting of one share and one warrant, with BGR Precious Metals (TSE) and Dynamic Precious Metals Fund. The units were issued at a price of 50 cents per share with each warrant entitling the holder to purchase an additional share priced at 50 cents over a 3-year period.