Excelsior Mining's (V.MIN) meteoric rise catches Vancouver investment conference by surprise

Peter Kennedy Peter Kennedy, Stockhouse
3 Comments| January 20, 2014


An explosive jump in the value of Excelsior Mining Corp. (TSX: V.MIN, Stock Forum) Friday, has apparently caught the mineral exploration sector by surprise.

A panel of newsletter writers, who spoke Sunday at the Vancouver Resource Investment Conference, made no mention of Excelsior or the economics of its Gunnison copper project near Tuscon Arizona.

When he was approached after the panel discussion, newsletter writer Lawrence Roulston shrugged and said he was unaware that Excelsior shares had jumped 358.33% to 55 cent cents Friday from 12 cents on volume of 13.3 million shares.

In morning trading Monday, the shares slipped 15% to 46.5 cents on volume of 4.8 million.

“I was surprised by the valuation,’’ added geologist Brent Cook.

Still,  there seems little doubt that investor interest in Excelsior has lifted a sector that is looking hard for reasons to be optimistic at a time when hundreds of its participants are scrambling to raise money just to keep the lights on.

Delegates who gathered Sunday in Vancouver for the first major mining conference of the year were told that in spite of reports about the sector's demise there is money available for the right projects. 

Sprott US Holdings Inc. Chairman Rick Rule said Sprott Inc. (TSX: T.SII, Stock Forum) recently raised $750 million in private equity money from parties in South Korea and is confident Sprott will soon have another $500 million available from investors in China.

Conference attendees were also told that the soaring value of companies such as Reservoir Minerals Inc. (TSX: V.RMC, Stock Forum) and Africa Oil Corp. (TSX: V.AOI, Stock Forum) is a sign that the market will reward performance when it occurs.

For its part, Excelsior has seen its stock price soar on the back of results from a pre-feasibility study, which shows that its Gunnison project in Arizona has the potential to be one of North America’s lowest cost copper producers.

Using a complex procedure known as in-situ recovery, Excelsior is hoping to produce 110 million pounds of copper annually at an average life-of-mine operating cost of just US68 cents per pound.

Given that copper was trading at US$3.34 a pound last week, Gunnison would be highly profitable at current prices.

Probable reserves at the site currently stand at 3.61 billion pounds (grading 0.29%), with a further 3.91 billion pounds in the measured and indicated resource category.

The company says the fractured nature of the ore-bearing rock means it is amenable to in-situ recovery methods, which involves the use of boreholes and acid to dissolve the copper and transfer it to nearby recovery wells for processing.

With pre-tax capital costs estimated at $284 million, Excelsior is betting on a speedy permitting process, lasting around 2 years, because the site’s remote location.

Friday’s stock market action has been positive for Excelsior President and CEO Stephen Twyerould, who owns 7 million shares, according to company documents. Ronald Goodgame, vice-president exploration, owns 1.3 million shares.

The stock price rally is also a boost for the Vancouver Resource Investment Conference, which is run by Cambridge House International.

On Sunday, conference officials said they anticipate that roughly 9,000 attendees will show up at the 2-day conference. That includes 6,000 who have pre-registered and 300 companies who have taken roughly 250 booths.

The list of speakers includes Yukon Premier Darrell Pasloski, and Bruce Madu, the director of Mineral Development at the British Columbia Ministry of Energy and Mines.



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tcalandra
I have met Stephen Twyerould -- an Aussie from Perth as I recall and a dedicated geologist. -- Good review. Thom
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January 20, 2014
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morricone
"Rick Rule said Sprott Inc. (TSX: T.SII, Stock Forum) recently raised $750 billion ..." Duh, how about correcting that to read "million".
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January 20, 2014
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HubbaBuba
Rick will say many things... Excelsior stock had been covered by analyst. Roughly the same exceptional facts were well out there. Sector went south and Excelsior couldn't raise money. Unless they can soon they'll be back in that same boat too.
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January 20, 2014
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