| Written by Peter Grandich |
| Saturday, 18 January 2014 04:53 |
Shares of Excelsior Mining Corp. (TSX.V: MIN) (OTCQX: EXMGF) soared on Friday after the company announced the results of a comprehensive Prefeasibility Study (“PFS”) on the North Star deposit of the Gunnison Copper Project, located in southern Arizona. Gaining 358% on total trading volume of nearly 16 million, the stock closed on Friday at $0.55. The way the share price traded all day, it looked like it wanted to go even higher at the close.
The PFS, which used a copper selling price of US$2.75 per pound, reported a pre-tax NPV7.5 of $1.24 billion, a pre-tax IRR of 59.7% and a payback period of 1.8 years for the preferred “Acid Plant” option. The PFS also reported initial estimated capital costs (excluding sustaining capital) of $284.74 million with average life-of-mine operating costs of $0.68 cents per pound. These values are among the lowest per pound capital and operating costs for copper projects not only in North America, but the copper industry as a whole.
Also included in the report was an updated resource for the North Star deposit, which now hosts a Probable Mineral Reserves of 3.61 billion pounds of copper (632 M tons at 0.29%), a Measured and Indicated Mineral Resource of 3.91 billion pounds of copper (683 M tons at 0.29%) and an Inferred Mineral Resource of 1.40 billion pounds of copper (338 M tons at 0.21%).
With initial production expected to commence in Q4 2016, the company plans to mine the deposit through in-situ recovery with an annual production rate of 110 million pounds of copper for the first 14 years, with a total of 1.682 billion pounds of copper to be produced over the 20 year mine life.
It's good to see the market rewarding great results; Excelsior's big move is a well-earned reward for a solid management team with a high quality project. Today's trading was fun to watch but it should be noted that even at $0.55, Excelsior is still trading at well under 5% of the NPV.
Stay tuned.
Peter Grandich is a compensated consultant to the company http://www.grandich.com/disclosure.html
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