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Merger Mines Corporation (OTC: MERG) was chartered in 1929 in the State of Arizona and incorporated in 1938. Two catalysts that could put this sleepy little mining company on the radar screens of a lot of investors are that MERG is pioneering the use of lasers in mining, and there is a huge disparity in the Company's stock price.
MERG is harnessing the power of lasers to mine narrow vein deposits of precious metals and will have a working prototype soon, subject to funding. Not only does this new technology create tremendous opportunity for growth, a 1 for 1000 reverse stock split on August 19, 2014 left only 47,582 shares outstanding. With only 47,582 shares outstanding, the stock rarely trades and is quoted $20 to $50 on the OTC. According to public filings, MERG has sold investors restricted shares at $2.50, which is probably closer to where the stock should trade. This kind of price disparity could create a great opportunity for patient investors, especially since MERG has a $120,000.0 market cap at $2.50 per share. While this is definitely not a stock to put in a market order for; it is definitely one to put on your watch list to see if there might be a buying opportunity.
Mining technology has evolved from hand-steeling and blowing up rocks with black powder to equipment powered by steam, diesel, electricity, and compressed air. While the use of lasers in mining might sound like something from Star Wars, it's actually nothing more than using existing technology in different ways to replace the antiquated ways of mining precious metals. This 87 year-old mining company is at the forefront of this breakthrough technology, which could be a real game changer for the mining industry world-wide.
MERG is developing a single head laser mining device for use in underground narrow vein mining and gold and silver are currently the prime prospects. MERG management says using "lasers for spalling (breaking) rock underground or to drill blastholes in open pits, will augment conventional methods of drilling and blasting, and could replace them in the near future.
In the fall of 2015, MERG acquired Bright Flash Development Inc. and became a global leader in the development and use of lasers for mining. MERG's goal is to utilize their innovative mining methods to lower mining costs and help mining companies maximize profits. MERG acquired Bright Flash for one-third of the company's outstanding shares, and added Bright Flash's President, CEO and Chairman of the Board, Mr. Gary Mladjan, to their Board of Directors.
Mr. Mladjan has over 50 years of opto-mechanical engineering experience working for defense contractors, most recently with Raytheon Corporation. He was a key team member in the development of a number of electro-optical night vision and laser devices, is the primary holder of six U.S. Patents, and is the co-holder of many other patents, including a number of International Patents for those devices.
MERG has filed for a patent on its laser mining methodology and plans to apply for additional patents as the design phase moves into the manufacturing stage. After the first laser mining unit is built, it will be field tested in a mine(s) the company selects, or acquires for that purpose.
Following the development and testing of the initial laser head mining unit, the equipment will be manufactured to include multiple laser head units for mining wider veins and to drive development headings. It is the company's plan to sell and lease its laser mining units after they are manufactured.
Initially, this single head laser mining unit will be used for narrow high grade veins. The mining width for this unit will be close to a couple of feet. From the single head mining unit, multi-head units can be developed for wider areas. Initially only the ore bearing material is removed by the laser. The waste is removed on a second pass with the unit. MERG management believes substantial savings can be realized in time, material costs, and operating costs. If you have been around the mining business, you know large chunks of rock are hauled away to expose the precious metal vein. When lasers are used for mining, the material is in the form of 'pea' sized chips, which are much easier to move to the surface. These small chips do not require crushing and can be discharged directly to the ball mill or leach pad, which is less costly and more environmentally friendly. Additionally, mining with state-of-the-art high tech lasers and robotics will result in reducing miners' exposure to hazardous underground environments.
Instead of blast and muck operations, Merger's method will make use of a high output power Fiber Laser with a Scan Head packaged to fit within an environmentally sealed containment. Cooling gases, fiber optic cables, electronics cables and a Head Extraction Cable will be contained within a separate flexible containment. An X-ray fluorescence device, either internal or external to the Scan Head, will be used to determine when ore bearing veins are present. It is anticipated that all mined material will come to the surface as dry concentrate. For more information on MERG's revolutionary technology, take a look at their website www.mergerminescorp.com.
MERG has an excellent management team with many more years of experience than many larger mining companies.
Lex Smith - President and Director
Mr. Smith entered the mining business in 1993 as the field manager and owner of multiple mining claims in Montana. In addition to his position as Merger's President and Director, Mr. Smith served as President and Director of Shoshone Silver/Gold Mining Company from 2003 to 2012. Mr. Smith also served as the President and Director of the Silver Valley Mining Association from its inception in 2003 until 2009, and currently serves as President and Director of Natural Resources Education Outreach (NREO), an Idaho non-profit corporation. Mr. Smith was a founder of both organizations. Additionally, in 2013, Mr. Smith served as a foreign legal consultant and mining law consultant for the LEHMAN, LEE & XU Law Firm in Beijing, China. In December of 2014, Mr. Smith returned to Coeur d'Alene, Idaho from Beijing, to resume his position full time as President and Director of Merger Mines Corporation, positions he has held for 12 years.
Melanie Farrand - Secretary, Treasurer, and Director
Mrs. Farrand has been working in the mining industry for the past thirteen years as an administrative secretary and bookkeeper. She also serves on the Board of Directors of several mining companies. Previously she was the office manager for a Land Surveying company for ten years, responsible for payroll, bookkeeping and research.
Gary Mladjan - Vice President of Engineering & Technology and Director
Mr. Mladjan, A.S. Industrial Technology, has over 50 years of opto-mechanical engineering experience with various defense contractors, most recently with Raytheon Corporation. Mr. Mladjan was a responsible team member in the development of a number of electro-optical night vision and laser devices and is the primary holder of 6 U.S. Patents and a number of International Patents for those devices. He was the lead engineer in the advanced conceptual design, engineering costing, product design and manufacturing on many projects at Raytheon, Hughes Aircraft, Northrop Electronics Div. and Aerojet ElectroSystems, Astrionics and Research Divisions. He was a designated Raytheon corporate expert for Investment Casting and for Single Point Diamond Machining as well as a developer in the use of exotic materials and technologies for defense products. Mr. Mladjan has authored several published papers on New and Innovative Technology and Detail Design in Exotic Materials.
Don Rolfe - Vice President, Mining Engineer, and Director
Mr. Rolfe is a mine engineer with over fourty years of mining industry experience. His career has included positions of Senior Mine Engineer, Chief Mine Engineer, Mine Foreman, Mine Superintendent and Mine Manager with several leading U.S. companies including Anaconda, Hecla, Union Carbide and Homestake. Rolfe has extensive knowledge of the mine planning and development process along with expertise related to the mining of various minerals including gold, silver, uranium, tungsten, phosphate, and bentonite clay.
Scott Beggs - Comptroller and Director
Mr. Beggs provides accounting services to the Company on a part-time basis. He has been the finance and budget director for Lake County, Montana since 2014. Prior to his position with Lake County, Montana, he was President and owner of Scott Beggs and Company, Inc. Mr. Beggs holds a B.A. degree in Business Administration/Accounting from Northwest Nazarene University.
While shares of MERG are not liquid, they could have considerable value when their laser mining device proves successful. The Company has filed a patent for mining methodology using the Merger Miner laser mining device, and expects to file other patents once it's in the manufacturing stage. In our opinion, just as drones have gained popularity for unmanned flight, lasers could gain considerable popularity in the mining business. Robotic equipment operating lasers that bust rock in to smaller pieces is certain to be less costly to operate than sending employees underground. This is especially true in cases where safety is questionable.
If you want to get even more futuristic, all you need to do is Google mining in space. There are numerous articles written on the subject of extracting metals from other planets than ours, as well as from asteroids. Should this become a reality, we believe laser mining could play an important role. One final note is that MERG CEO, Lex Smith, has strong relationships in China, which is a country that is trying to make its mines safer. According to a 2015 BBC article, "China has an abysmal record on mine safety." In our opinion, Mr. Smith's relationships in China could result in opportunities for MERG.
You can find out more about Merger Mines (OTC: ) on their website atmergerminescorp.com.
We have also posted a copy of a recent Corporate Profile on our website atotcstockreview.com/Merger_Mines_Booklet.pdf.
Merger mines was also featured recently in an article written by International Mining, which can be found here otcstockreview.com/International_Mining_....
MERG is an interesting scenario and the stock is unlike any we have ever written up. You can't rush right out and buy it, since it is so illiquid, but it is worth looking in to. Keep an eye on MERG. Talk to your broker about it, put it on your watchlist, and reach out to the company for more information.