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Excelsior Ready for a New Upward-Trend
On July 8, for the first time, we reported on Excelsior Mining Corp. (TSX-Symbol: MIN) respectively one day after the final drill results were published. The updated NI43-101 resource shall be released any time now and we anticipate that the majority of the “inferred” resource (4.8 billion pounds of copper) will be upgraded into the “measured & indicated” resource category – hence, the company will become attractive to many new investors (as for example some institutional investors are only allowed to invest into companies that have NI43-101 resources of the category “measured & indicated”).
Furthermore, we think it is probable that the overall resource can be expanded as the last drill program (10.300 m) not only intersected high-grade zones but also encountered respectable mineralization outside of the already defined deposit.
Additionally, we expect the publication of the eagerly awaited hydrological study any time now. We anticipate that the results will be positive as the company already conducted initial (but not official) hydrological tests in the past by which results the management recognized the unique potential of the Gunnison deposit. We even think that the hydrological conditions will be more favorable as with other ISR-capable copper deposits, such as for example the near-by Florence deposit. Should the results of the hydrology study be positive, we expect the share-price to rise strongly as then the highest hurdle towards production has been jumped over successfully.
In August, we expect the publication of the metallurgy study that already started in February, whereas initial tests already showed clearly that the rock is favorable for the ISR mining method.
After receipt and publication of these 3 important milestones (1. Resource upgrade; 2. Hydrology study; 3. Metallurgy study), all results will be summarized within one PEA report („Preliminary Economic Assessment“) by an independent company and the deposit will be evaluated in regards of mineability. Should this PEA produce positive results (dependent on those 3 milestones), then it becomes likely that the Gunnison deposit can be brought into production relatively fast.
Thus, the PEA can be completed already by September.
We expect that the share-price will rise strongly with every positive publication of those 3 milestones as the more it becomes probable that the PEA will produce positive results respectively that Gunnison can be brought into production. As 2 out of 3 milestones may be published already this month, we expect a new upward-trend of the share-price any time now.
Because technically seen, the downward-trend since early June was solely a so-called “classical pullback” to the (red-blue) triangle respectively towards the apex of the triangle. As the share-price continues to trade above the red & blue triangle legs, a so-called “buy-signal à la thrust to the upside” prevails (a “sell-signal à la thrust to the downside” is not given until the red support currently at approx. $0.42 has been breached). A so-called „thrust“ is the final movement out of a triangle – either a strong up- or downward-trend. In late 2010, the stock consolidated beneath the red parallel-resistance as well, whereafter a thrust to the upside started lifting the stock from approx. $0.35 to more than $0.70 within a few weeks. Such a move we expect to start shortly as well, whereas the goal of the thrust to the upside is to transform the resistive high that was marked by the triangle ($0.80) into a new support in order for a new and sustainable upward-trend to commence.
It is typical for sideways-consolidations that occur in form of triangles that not only the price volatility becomes increasingly less, but also that the trading volume decreases steadily. We value it positively that the volume already breaks out that strongly without generating a sell-signal à la thrust to the downside and that the price holds that strongly above the supports of the red-blue triangle.
Relatively to the HUI mining index, the share-price of Excelsior has landed on strong (blue) support as well recently – from which we anticipate an appreciation period (meaning that Excelsior will perform better than the HUI).
At the bottom of the chart is the MACD indicator that has just reached the same low as in May – hence it just landed on strong support. As soon as the black curve rises above the red curve, a strong and distinct buy-signal is generated.
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Our first article on Excelsior Mining from July 8 can be found at the Research section of www.rockstone-research.com
whereas it can be downloaded directly as a PDF with the following link: http://tinyurl.com/3cwts89
With the free & non-binding Newsletter, Rockstone can notify you immediately once new publications have been released.
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DISCLAIMER: All analysts, industry-experts or other authors under the roof & label of Rockstone Research Ltd. conduct their work on their own responsibility & costs respectively without any kind of remuneration from Rockstone. The companies that are analyzed or mentioned under the roof & label of Rockstone Research Ltd. did NOT pay any kind of remuneration to Rockstone or the respective author. At the time of publication, Rockstone and the respective author do NOT hold any stock or other kinds of securities of or interests in Excelsior Mining Corp. All information that is provided by Rockstone solely represents the opinion, thoughts & intuitions of the author & do NOT reflect an advise or any kind of consultation to the reader. The provided analysis of especially markets & companies are solely for the purpose of information & education in no way it is to be construed as a de facto buy-, hold- or sell-recommendation for any kinds of securities, physical goods or markets; hence the provided content does NOT represent an act of consultancy, advise or an offer to buy, hold or sell anything. Please read the full disclaimer at www.rockstone-research.com
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