Excelsior Mining Corp. (TSX VENTURE:MIN)(OTCQX:EXMGF)(PINK
SHEETS:EXMGF)(FRANKFURT:3XS) ("Excelsior") is pleased to announce
the results of the Preliminary Economic Assessment ("PEA") on the
North Star Deposit of the Gunnison Copper Project, located in
southern Arizona. The PEA was completed by M3 Engineering &
Technology Corporation ("M3") of Tucson, AZ and is effective as of
November 18, 2011. The complete report will be filed on SEDAR and
Excelsior's website within 45 days of this news release.
Highlights of the North Star Gunnison Copper Project PEA
include:
-- After-Tax NPV of US$561.7 million (discounted at 8%, using US$2.50
copper price)
-- After-Tax IRR of 30%
-- Payback period of 3.6 years
-- Initial capital costs of US$324.7 million (including SXEW plant,
Infrastructure and Acid Plant)
-- Total operating costs of US$0.68 per pound (averaged over life of mine)
-- Royalty of US$0.01 per pound
-- Annual production rate of 85.65 million pounds of copper
-- Commercial production commencing in 2015, with a mine life of 20 years
"We are extremely pleased with the results from this PEA. These
results support what we have been saying from the beginning, that
copper extraction at Gunnison via ISR has the potential to generate
outstanding financial returns," says Stephen Twyerould, President
and CEO of Excelsior. "These results show that our low capital
costs and very low per pound operating costs provide the project
with significant margins, which can act as a buffer from commodity
market volatility."
As highlighted in Table 1 below, the PEA illustrates very strong
project economics in both the "Acid Plant" and "Base Case" (no acid
plant) scenarios, with the Acid Plant option adding an additional
US$80.7 million to the project NPV. Based on an annual production
rate of 85.65 million pounds, the PEA indicates that including an
Acid Plant as a component of the project, generates an after-tax
Net Present Value ("NPV") of US$561.7 million, at a cash flow
discount rate of 8%. The after-tax internal rate of return ("IRR")
for this option is 30%. Initial capital expenditures for this
option (including contingency) are estimated at US$324.7
million.
Without an Acid Plant, the project still has a significant
after-tax NPV of US$480.9 million and an IRR of 34%, at an 8%
discount rate. Initial capital expenditures for this "Base Case"
option are US$239.9 million. Details of both financial models are
shown in Table 1 below.
Both scenarios used the following parameters over the 20 year
life of the project.
-- copper selling price of US$2.50 per pound;
-- total copper recovery of approximately 41.8% of the indicated plus
inferred oxide resources;
-- average of 9 pounds of acid consumed for every pound of copper produced;
-- acid price of US$100/ton for the Base Case and US$42.2/ton for the Acid
Plant option;
-- state tax rate of 6.97%; and
-- a federal tax rate of 35%.
The North Star Deposit currently contains an indicated oxide
copper resource of 3.21 billion pounds (511 million tons at 0.31%
copper) and an additional inferred oxide copper resource of 0.88
billion pounds (159 million tons at 0.28% copper).
Table 1: Results of the Preliminary Economic Assessment on the North Star
Deposit.
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Excelsior Financial
Model 2011 Unit Acid Plant Cost/lb Base Case Cost/lb
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Copper Cathode sold MMlb 1,706 - 1,706 -
Copper Price $/lb 2.50 - 2.50 -
Gross Revenue $000's 4,265,436 - 4,265,436 -
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Royalties $000's (19,618) (0.01) (19,618) (0.01)
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Operating Costs
Production (Wellfield) $000's (635,708) (0.37) (1,032,833) (0.61)
SXEW $000's (415,224) (0.24) (463,504) (0.27)
G&A $000's (108,198) (0.06) (108,198) (0.06)
Sub-total Operating Costs $000's (1,159,130) (0.68) (1,604,535) (0.94)
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Initial Capital Costs
Production (Wellfield) $000's (83,999) (0.05) (83,999) (0.05)
SXEW + Infrastructure $000's (146,294) (0.09) (146,294) (0.09)
Owners Costs $000's (9,650) (0.01) (9,650) (0.01)
Acid Plant $000's (84,808) (0.05) - -
Sub-total Initial Capital
Costs $000's (324,751) (0.19) (239,943) (0.14)
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Sustaining Capital Costs $000's (348,295) (0.20) (339,597) (0.20)
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Taxes $000's (762,508) (0.45) (615,248) (0.36)
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NPV and IRR
Discount Rate 8.00% 8.00%
Pre-Tax Cash Flow $000's 2,317,799 1,984,965
Pre-Tax NPV $000's 883,034 732,842
Pre-Tax IRR 40% 47%
Payback (years) 2.7 2.1
Post-Tax Cash Flow $000's 1,555,292 1,369,718
Post-Tax NPV $000's 561,659 480,924
Post-Tax IRR 30% 34%
Payback (years) 3.6 3.2
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Sustaining capital costs include reclamation and rehabilitation
costs of $23.8 million for the Acid Plant option and $15.1 million
for the "Base Case" (no acid plant option).
The PEA is preliminary in nature and includes inferred mineral
resources that are considered too speculative geologically to have
the economic considerations applied to them that would enable them
to be categorized as mineral reserves. There is no certainty that
the conclusions reached in the PEA will be realized. Mineral
resources that are not mineral reserves do not have demonstrated
economic viability.
Project Summary
The Gunnison Copper Project is located approximately 65 miles
southeast of Tucson, AZ. The project, which includes both the North
Star and South Star deposits, currently has a total NI 43-101
indicated resource of 3.21 billion pounds of oxide copper (511 M
tons at 0.31% at the North Star deposit) and an inferred resource
of 1.26 billion pounds of oxide copper (221 M tons at 0.29%; 159 M
tons at North Star and 62 M tons at South Star). These oxide
resources have the potential to be mined using in-situ recovery
methods. The Gunnison property also has the added benefit of being
situated in a very remote location, near an existing mining
operation.
The PEA was prepared under the overall supervision of Conrad
Huss, P.E., with M3. Mr. Huss is a Qualified Person as defined by
NI 43-101 and Mr. Huss is independent of Excelsior. Mr. Huss has
reviewed and approved the technical information contained in this
news release, as well as having verified all data disclosed
herein.
About Excelsior
Excelsior is an exploration and development company with a
copper project located within the copper porphyry belt of Arizona.
The Gunnison Copper Project is located close to the required
infrastructure and its oxide resource has the potential to be mined
using in-situ recovery methods. The Excelsior team consists of
experienced professionals with proven track records of advancing
projects towards production.
Further details about Excelsior can be found at:
http://www.excelsiormining.com. Further information about the
Gunnison Copper Project can be found in the technical report filed
on SEDAR at www.sedar.com entitled: Gunnison Copper Project,
Cochise County, Arizona, USA, Mineral Resource of the North Star
Deposit dated August 31, 2011, as revised October 25, 2011.
ON BEHALF OF THE EXCELSIOR BOARD
Stephen Twyerould, President & CEO
Cautionary Note Regarding Forward-Looking Information
Information set forth in this news release may involve
forward-looking statements under applicable securities laws.
Forward-looking statements are statements that relate to future,
not past, events. In this context, forward-looking statements often
address expected future business and financial performance, and
often contain words such as "anticipate", "believe", "plan",
"estimate", "expect", and "intend", statements that an action or
event "may", "might", "could", "should", or "will" be taken or
occur, or other similar expressions. All statements, other than
statements of historical fact, included herein including, without
limitation; statements about the timing and amount of future
production, future operating and capital costs, the projected IRR,
NPV and payback period for the Gunnison Project, details about
infrastructure requirements, the future exploration on and the
development of the Gunnison Project and the ability to mine
Gunnison using in-situ recovery mining techniques are
forward-looking statements. By their nature, forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause our actual results, performance or
achievements, or other future events, to be materially different
from any future results, performance or achievements expressed or
implied by such forward-looking statements. Such factors include,
among others, the following risks: the need for additional
financing; operational risks associated with mineral exploration;
fluctuations in commodity prices; title matters; environmental
liability claims and insurance; reliance on key personnel; issues
in obtaining required permits; the potential for conflicts of
interest among certain officers, directors or promoters with
certain other projects; the absence of dividends; competition;
dilution; the volatility of our common share price and volume and
the additional risks identified in the management discussion and
analysis section of our interim and most recent annual financial
statements or other reports and filings with the TSX Venture
Exchange and applicable Canadian securities regulations.
Forward-looking statements are made based on management's beliefs,
estimates and opinions on the date that statements are made and the
company undertakes no obligation to update forward-looking
statements if these beliefs, estimates and opinions or other
circumstances should change, except as required by applicable
securities laws. Investors are cautioned against attributing undue
certainty to forward-looking statements.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release, and no securities regulatory authority
has either approved or disapproved of the contents of this
release.
Contacts: Excelsior Mining Corp. JJ Jennex Vice President,
Corporate Affairs 604-681-8030 x240 604-681-8039
(FAX)info@excelsiormining.comwww.excelsiormining.com
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