EXCELSIOR MINING CORP. (MIN-TSX.V) $0.55
Excelsior provides positive PEA and moves into Feasibility
Philip Ker, B.Sc.Geol, MBA 416-775-5130 pker@union-securities.com 2-Dec-11
Stock Rating: Speculative Buy Target Price: $1.60 (Previous: $1.00)
Excelsior Mining is a Canadian-based company focused on developing a low cost copper project within the copper porphyry belt of Arizona. Over 60,000 metres have been drilled to date on Gunnison, which has an NI 43-101 indicated resource of 3.21 billion pounds of oxide copper (511 M tons at 0.31%) and an inferred resource of 1.26 billion pounds of oxide copper (221 M tons at 0.29%). The oxide resource has the potential to be mined using in-situ recovery methods. This will allow the copper to be recovered at a much lower cost than conventional mining methods. www.excelsiormining.com
Source: Company reports, Union Securities Estimates, www.bigcharts.com
Event
Excelsior Mining completes its PEA for the North Star deposit at Gunnison and proves robust economics.
Impact
Positive
Details
North Star PEA proves positive economics for In-situ Recovery (ISR): Excelsior’s PEA results for the North Star deposit proved it is worthy of further investigation and concludes the project contains a deposit which can be economically recovered via an ISR method. Based on a 20 year mine life, the Company believes it can extract 85Mlb of copper annually at an operating cost of $0.94/lb in its base case scenario. This base case would generate an after tax NPV of $480M with an IRR of 34%. An alternate scenario utilizes an on-site Acid Plant which would significantly reduce the operating costs to $0.68/lb but add an additional $85M in capital expenditures. We are omitting this scenario from our analysis at this time, as further investigation is warranted in the Pre-feasibility Study (PFS).
Study suggests similar economics to nearby Curis Resources development stage ISR copper project: A direct comparable for Excelsior’s Gunnison property would be Curis Resources (TSX:CUV – Not Rated) and their Florence copper project, also located in southern Arizona. A 2010 PEA completed on Florence indicates similar economics and indicate that within due course, the North Star deposit should also be at a development stage. Curis Resources is nearly twice the market cap of Excelsior at today’s values and our belief is that Excelsior’s Management team is capable of, and intend on bringing North Star into production. A comparison of the two PEA announcements from both Excelsior and Curis can be seen in Exhibit 1.

http://www.grandich.com/2011/12/grandich-client-excelsior-mining-19/