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July 30, 2008 Dear Friend, Monday night we distributed a Mercator Minerals update after speaking with Marc Leblanc in the Vancouver office. Midday Tuesday Mike Surratt, the president and CEO, returned my call. Mike noted from the mine site one day later that the second pair of "ball mill heads" had arrived, which Marc had not communicated. Second, in our earnings model we had accounted for the Silver Wheaton silver output sale as a capital gain, which is not the way Mercator Minerals will account for it. Mercator's June 30, 2008 balance sheet will show a cash increase and a "deferred revenue" long-term liability, and it will recognize a tiny amount of profit over the life of the mine as it delivers each ounce of silver. We estimate the operational earnings to be generated in the fourth-quarter will create close to a $0.10 per share 2008 net income. We continue to estimate 2009 at $2.49. Teck Cominco's July 29th acquisition of Fording Coal reduced our November 12, 2008 conference agenda to 15 companies. We will survey a number of the publicly traded coal companies to find another potential speaker. Prior to Labor Day a member of our team will contact you to survey your one-on-one interests at the November program. HudBay Minerals acquisition of Skye Resources changes our March 31, 2008 agenda, although we have invited Hudbay Minerals to speak in Skye's place. Plum Creek Timber, a 7.7 mm acre U.S. forest land owner, has agreed to speak next March increasing our agenda towards 11 companies. We continue to invite more companies. Faithfully yours, John C. Tumazos |
Copyright © 2008 John Tumazos Very Independent Research,
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