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Excelsior Mining: THE INVESTMENT CASE

Excelsior Mining remains on track to open North America’s next copper mine

The Gunnison Copper Project is slated for commercial production in the second half of this year
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INVESTMENT OVERVIEW: MIN The Big Picture
Processing equipment ready to go at Gunnison

For all intents and purposes, Excelsior Mining (TSE:MIN) has one more significant hurdle to clear before it can bring on commercial production at its Gunnison Copper Project in Cochise County, Arizona -- receipt of a federal mining permit from the US Environmental Protection Agency (EPA).

Obtaining the EPA’s Underground Injection Control (UIC) permit would represent the most significant milestone for the project to date, and push Gunnison past a threshold very few mining exploration and development companies achieve.

It would also keep the company nicely on schedule to initiate production in the latter half of 2018.

Fast turnaround

As the state and federal permitting processes began in early January 2016, Excelsior is on track to have obtained all required permits for the project in a little over two years.  It may sound like a long time, but in the mining business this is a remarkably fast turnaround.

Gunnison’s remote location is one of the key reasons things have gone so smoothly to date, and a reason the company anticipates the EPA’s approval to arrive in due course.

The mining approach to be used at Gunnison is also important.  In-situ mining sees fluid injected into the ground, and when it comes up at a different part of the project site it brings copper with it.  On-site processing of the fluid removes the copper and the cycle repeats. No tailings ponds are required, and disturbance on the surface is minimal. If ever there were an environmentally friendly method to remove minerals from the ground, in-situ is it.

A public meeting scheduled for later this month represents the final public comment component of the EPA permitting process. If all goes well, Excelsior would receive the EPA’s blessing for the project soon after. As a state operating permit was obtained in October 2017, receipt of the UIC would mark the completion of permitting.

Funds

Excelsior recently closed a US$30mln financing with institutional investors, some new and some long-time supporters such as Greenstone Resources, one of the United Kingdom’s most prominent investors in mining projects.

That US$30mln stands Excelsior in good stead with regard to getting production underway.  Initial capital to get phase one up and running at 25mln pounds of copper per year is just US$49mln.  And plans call for the scale up to full capacity at 125mln pounds using internal cash flow.

At a copper price of $2.75, Gunnison’s Net Present Value, calculated by discounting future cash flows of all envisioned phases back at a predetermined interest rate (in Gunnison’s case, a reasonable 7.5%), is US$807mln.  With copper today trading around $3.20, and many experts calling for it to move significantly higher, the Excelsior Mining team is close to walking some of the mining industry’s most robust project economics across the finish line.

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