TORONTO (miningweekly.com) – Vancouver-based miner Mercator Minerals on Friday said it was still waiting to hear from the Russian Federal Anti-Monopoly Services (FAS) regarding an application early this month to confirm whether FAS approval was indeed required for the proposed merger with diversified Russian mineral resources company Intergeo.

The companies announced in December that Intergeo had agreed to acquire Mercator in a bid to create a new copper-focused base metals company with a strong growth profile and strong financial backing.

Earlier this month, the companies also agreed to extend the closing date of the plan of arrangement to Monday and, in certain circumstances, up to August 1.

Mercator would receive up to $14-million from Intergeo’s controlling shareholder, Daselina, part of ONEXIM Group, which was controlled by Russian billionaire Mikhail Prokhorov, through a bridge loan to stabilise its operations.

However, the parties had not yet finalised the terms and conditions under which the commitment under the bridge loan would be increased to provide Mercator with additional interim funding.

Mercator on Friday said it had drawn down another $1-million of the facility, bringing the total drawn amount to $13-million.

"We are pleased to have the continued support of Intergeo and its controlling shareholder as we work to complete our business combination. The additional interim funding will support Mercator's corporate and general working capital needs.

“Meanwhile, given improved operations and current metal prices, the Mineral Park mine is currently generating positive operating cash flow and has reduced its trade payables to the lowest level since construction of the Phase 2 mill expansion was completed in September 2011,” Mercator president and CEO Bruce McLeod said.

Daselina would invest $100-million (including the bridge loan principal) and an amount equal to the accrued and capitalised interest under the bridge loan through a private placement in the combined company, at a subscription price of $0.1224 a share.

Under the arrangement agreement, Intergeo shareholders would receive common shares of the combined company, in exchange for all Intergeo common shares, and Mercator shareholders would receive one common share of the combined company and one transferable put right with a strike price of C$0.10 a share, in exchange for each Mercator common share.

The combined company would be renamed Intergeo Mining and the common shares would be consolidated on a 1-for-50 basis.

Current Intergeo shareholders would own about 85% of the new company and Mercator shareholders would own about 15% of the outstanding common shares of the combined company.

Closing the arrangement remained subject to satisfying or waiving all remaining conditions precedent.

The parties’ combined assets include an attractive portfolio of producing and short- and medium-term development properties. These included Intergeo’s Ak-Sug copper porphyry deposit, in Russia, and Mercator Minerals’ Mineral Park copper/molybdenum/silver mine, in Arizona, and the El Pilar copper project, in Mexico.