Calculation from the November 2011 Stateside Report (see Links Library):

To be conservative, we will perform a first year start-up phase analysis
using lower grades and current pricing and then two different gold price forecasts to peer into the future to see what 2013 and beyond may be expected to bring to Excalibur and it's shareholders.

Some assumptions based on testing/expectations start-up phase Year 1:

Gold grades: avg 3 g/t (low grade material in dumps)
Silver grades: avg 110 g/t
Recovery : 93%
Production Rate: 250 tons/day
Total Operating Costs: $100/ton (based on industry average for underground mines)

With gold at current levels of $1,700/ounce and silver at $35 (start-up phase case):
Sales price/ton: $295/ton * 93% recovery = $275
Operating costs/ton = $100
Net Profit price/ton = $175
Annual Net Revenue = $175*250 tons/day * 310 days = $14 million
Annual Net Revenue after taxes of 34% = $9 million
Excalibur's shares at 49% = $4.5 million
Earnings per share fully diluted $4.5 million/75 million shares=$.06/share

Start-up phase Year 1 with a net of approximately 3,500 oz of gold sold net to Excalibur.

Some assumptions based on testing/expectations life of mine beyond year 1 start-up phase:
Gold grades: avg 9 g/t
Silver grades: avg 200 g/t
Recovery : 93%
Production Rate: 250 tons/day
Total Operating Costs: $100/ton (based on industry average for underground mines)

With gold at $1,000/ounce and silver at $20 (Low Level Case):
Sales price/ton: $419/ton * 93% recovery = $390
Operating costs/ton = $100
Net Profit price/ton = $290
Annual Net Revenue = $290*250 tons/day * 310 days = $23 million
Annual Net Revenue after taxes of 34% = $15 million
Excalibur's shares at 49% = $7.4 million
Earnings per share fully diluted $7.4 million/75 million shares=$.10/share – Low Level Case

With gold at $1,500/ounce and silver at $30 (Base case):
Sales price/ton: $628/ton * 93% recovery = $584
Operating costs/ton = $100
Net Profit price/ton = $484
Annual Net Revenue = $484*250 tons/day * 310 days = $37 million
Annual Net Revenue after taxes of 34% = $24 million
Excalibur's shares at 49% = $11.8 million
Earnings per share fully diluted $11.8 million/75 million shares=$.16/share – Base case

In summary, we can expect net income of $.06 share or a PE of under 2 (now under 3)(current market price $.09/ now 0.16) during year one (2012) as the mine process is fine tuned and the lower grade 3 g/t gold, 110 g/t silver is processed from the dump using current gold and silver levels of $1,700 and $35 respectively. After year one and using the Low Level Case of $1,000 gold and $20 silver gives us a PE of 1 as net income climbs to $.10/share.

Using the Base Case of $1,500/oz gold and $30/oz silver gives us a PE of less than 1 as net income climbs to $.16/share. As most readers already know, my forecast for
gold is over $2,500 and over $50 for silver over the next few years but I wanted to be conservative in my analysis to show that this project can be economical even under less than favorable economic conditions.