July 6, 2011 / 3:45 PM / 6 years ago

UPDATE 1-Mercator Q2 production increases; forecasts growth

* Says Q2 production exceeded its own expectations

* Co sees further production gains going forward

* Shares up slightly in early trading on the TSX

TORONTO, July 6 (Reuters) - Mercator Minerals ML.TO said on Wednesday its second-quarter copper and molybdenum output rose and topped its own expectations.

The Vancouver-based mining company said production in the quarter totaled 11.18 million pounds of copper and 1.76 million pounds of molybdenum, this compared to its own forecast of 9.5 million pounds of copper and 1 million pounds of molybdenum.

Mercator said it is set to increase production further from second-quarter levels with the availability of additional power from a new gas turbine facility that is expected to start up in mid-July.

The company also said it expects its processing capacity to increase due to the incremental investments in its processing facilities at its Mineral Park mine in Arizona.

Mineral Park is currently Mercator’s only operational mine. Last month, Mercator completed its acquisition of Creston Moly Corp, a deal that expands its copper and molybdenum resource base in Mexico. [ID:nL3E7FC1PH]

The acquisition could transform Mercator into a mid-tier miner by the middle of the decade as it boosts output from its Mineral Park mine in Arizona, while continuing to move its El Pilar and El Creston projects in Mexico toward production.

“I am extremely pleased with the rapid integration of the two companies, Mercator and Creston, and their respective personnel,” Mercator Chief Executive Bruce McLeod said in a statement.

The optimized feasibility study at the company’s El Pilar copper project in Mexico has advanced significantly, and is scheduled for completion in the third-quarter, while work on the feasibility study for El Creston is ongoing, the company said.

Mercator said it is set to announce its second quarter financial results on August 15.

Shares of Toronto-listed Mercator were up 5 Canadian cents at C$3.05 in early trading in Toronto on Wednesday. (Reporting by Trish Nixon; With additional writing by Euan Rocha; Editing by Jeffrey Hodgson)

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