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Excelsior Mining soars after getting financing for Gunnison project

Published: 14:55 23 Jul 2013 EDT

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Excelsior Mining Corp. (CVE:MIN), a junior mining corporation focused on Arizona, advanced to the highest in a month after obtaining financing for the Gunnison copper project from Callinan Royalties Corp. (CVE:CAA). 

The shares surged 45 percent to 16 Canadian cents, the highest intraday price since June 24, before trading at 15.5 Canadian cents, up 41 percent, at 11:39 a.m. in Toronto on Tuesday. 

Callinan will invest $1 million in Excelsior Mining by way of a non-brokered private placement and up to a further $21 million by buying a staged gross revenue royalty, or GRR, on the Gunnison project, Vancouver, British Colombia-based Excelsior said in a statement on Tuesday.

"Despite the current challenges of the junior mining market," Chief Executive Officer Stephen Twyerould said in the statement, "we have successfully delivered to our shareholders a significant financing partner via a non-dilutive structure."

Callinan will buy 6.3 million shares of Excelsior at 16 cents a share for gross proceeds of $1 million. Concurrently, Callinan will acquire a 0.5 percent GRR on the Gunnison Project for consideration of $2 million payable to Excelsior, according to the statement. This $3 million initial investment is expected to be closed on or before July 31.

Callinan will have the option to invest up to an additional $19 million into Excelsior in exchange for a further 2.5 percent GRR on the Garrison Project, which is located in a remote section of Cochise County in southeastern Arizona.

Excelsior said proceeds from the transaction will be used to advance the Gunnison Project and for general and working capital purposes.

The focus of the project is the North Star deposit, which has a Measured and Indicated mineral resource of 3.21 billion pounds of oxide copper and an Inferred mineral resource of 0.83 billion pounds of oxide copper. 

"This transaction stands as confirmation of the financial viability of the Gunnison Copper Project," the company quoted Chairman Mark Morabito as saying. 

The transaction is subject to approval of the TSX Venture Exchange.

Excelsior, with a market value of C$9.3 million, lost 52 percent this year through Monday, compared with a 24 percent loss for the S&P/TSX Venture Composite Index (CVE:OSPVX).

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