Excelsior Mining Corp. (TSX VENTURE:MIN)(FRANKFURT:3XS)(OTCQX:EXMGF)
("Excelsior" or the "Company") is pleased to announce that it has filed a
National Instrument ("NI") 43-101 Technical Report dated February 18, 2014 on
SEDAR at www.sedar.com. The Report is with respect to Excelsior's Prefeasibility
Study ("PFS") on the Gunnison Copper Project in southern Arizona; the results of
which were originally announced in a January 17, 2014 news release. The final
results of the PFS are presented below in this news release. Some of the final
results differ from the results set out in the January 17, 2014 press release,
but the variance is less than 1% unless otherwise noted below. Results of the
PFS disclosed in this news release are in USD and pre-tax (except where
otherwise indicated).
Prefeasibility Study Results
Highlights of the North Star Gunnison Copper Project PFS "Acid Plant" option
include:
-- Pre-tax Net Present Value ("NPV") of $1.24 billion (after-tax $0.824
billion) at a 7.5% discount rate (using a copper price of $2.75/lb);
-- Pre-tax Internal Rate of Return ("IRR") of 59.7% (after-tax 44.7%);
-- Pre-tax payback period of 1.8 years (after-tax 2.4 years);
-- Initial estimated capital cost (excluding sustaining capital) of $284.84
million;
-- Average life-of-mine operating costs of US$0.69 per pound;
-- Other costs of $0.13 per pound, including Royalties of $0.029 per pound;
-- Annual production rate of 110 million pounds of copper for the first 14
years, then declining for a 20 year mine life, with a total of 1.682
billion pounds of copper produced over the life of the mine.
Financial Analysis
As highlighted in the tables below, the PFS demonstrates robust project
economics in both the "Acid Plant" and "Non-Acid Plant" scenarios, with the Acid
Plant option adding an additional $173.8 million to the project pre-tax NPV.
Based on an initial annual production rate of 110 million pounds, the PFS
indicates that including an Acid Plant as a component of the project, generates
a pre-tax NPV of $1.24 billion, at a cash flow discount rate of 7.5%. The
pre-tax IRR for this option is 59.7% with a payback period of 1.8 years. On an
after-tax basis, the PFS shows an NPV7.5 of $824.17 million, IRR of 44.7% and a
payback period of 2.4 years.
Without an Acid Plant, the project still has a significant pre-tax NPV7.5 of
$1.06 billion and an IRR of 61.3%, (after-tax NPV7.5 of $720.4 million and an
IRR of 46.1%). The after-tax analysis is based on a number of assumptions which
will be fully set out in the Report. The level of accuracy of the PFS is
considered to be +/-20%.
Both scenarios used the following parameters over the 20 year life of the project:
-- copper selling price of $2.75 per pound,
-- total copper recovery of approximately 47% (based on a combination of
metallurgical recovery and sweep efficiency),
-- average of 8.14 pounds of acid consumed for every pound of copper
produced,
-- acid price of $45.47/ton for the Acid Plant option and $125/ton for the
Non-Acid Plant option,
-- state tax rate of 6.97%, and
-- a federal tax rate of 35%.
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PRE-TAX Acid Plant Non-Acid Plant
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IRR 59.7% 61.4%
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Payback (years) 1.8 1.5
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NPV (million $)
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Discount Rate
0% 2,368.4 1,956.0
5% 1,522.7 1,293.0
7.5% 1,236.8 1,063.0
10% 1,012.5 880.0
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AFTER-TAX Acid Plant Non-Acid Plant
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IRR 44.7% 46.1%
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Payback (years) 2.4 2.0
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NPV (million $)
Discount Rate
----------------------------------------
0% 1,616.1 1,354.9
5% 1,025.8 885.5
7.5% 824.2 720.4
10% 665.2 588.2
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Total initial capital expenditures for the "Acid Plant" option (including
contingency) are estimated at $284.84 million. Sustaining capital, which
includes the acid plant built in year three, water treatment facilities and
production wellfield are estimated at $598.8million. Net closure costs are
estimated at $52.65 million(1). For the "Non-Acid Plant" option, total initial
capital expenditures (including contingency) are estimated at $284.84 million.
Sustaining capital, which includes the water treatment facilities and production
wellfield are estimated at $525.2 million. Net closure costs are estimated at
$45.2 million(2).
The PFS assumes a copper selling price of $2.75/lb. Average life-of-mine
operating direct cash costs are estimated at $0.69/lb for the "Acid Plant"
option and $0.98/lb for the "Non-Acid Plant" option.
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Acid Plant Non-Acid Plant
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Copper Cathode sold (MMlb) 1,682 1,682
Copper Price ($/lb) 2.75 2.75
Gross Revenue (million $) 4,625.9 4,625.9
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Operating Costs (million $) Cost/lb (million $) Cost/lb
Production (Wellfield) 447.8 0.27 935.5 0.56
SXEW 360.8(3) 0.21 372.8(4) 0.22
Water Treatment Plant 199.7 0.12 199.7 0.12
G&A 147.3 0.09 147.3 0.09
Direct Operating Cash Costs 1,155.6 0.69 1,655.2 0.98
Royalties 48.3 0.03 48.3 0.03
Other Production Expenses 169.9(5) 0.10 156.4(6) 0.09
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Initial Capital Costs (million $) Cost/lb (million $) Cost/lb
Production (Wellfield) 75.3 0.04 75.3 0.04
SXEW + Infrastructure 186.3 0.11 186.3 0.11
Owners Costs 23.2 0.01 23.2 0.01
Sub-total Initial Capital
Costs 284.8 0.17 284.8 0.17
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Sustaining Capital Costs (million $) Cost/lb (million $) Cost/lb
Production (Wellfield) 440.7 0.26 440.7 0.26
Plant + Infrastructure 158.1(7) 0.10 84.6(8) 0.05
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Sub-total Sustaining Capital
Costs 598.8 0.36 525.2 0.31
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Taxes 752.3 0.45 601.1 0.36
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Noted Variances:
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(1)18.3% Increase (2)6.9% Increase (3)1.4% Increase (4)1.4% Increase
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(5)5% Increase (6)1.9% Increase (7)2.5% Increase (8)4.5% Increase
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Project Summary
The Gunnison Copper Project is located in a remote section of Cochise County
about 65 miles east of Tucson, Arizona in the Johnson Camp Mining District. The
property is within the copper porphyry belt of Arizona.
Technical Report and Qualified Person
The PFS Report was prepared under the supervision of Conrad Huss, P.E. of M3
Engineering & Technology Corporation, Tucson, Arizona, who is a qualified person
that is independent of the Company. The Report also received contributions from
the following additional qualified persons, who are also independent of the
Company:
-- Dr. Ronald J. Roman of Leach, Inc., Tucson, Arizona (metallurgy and
leaching recovery).
-- Peter Lenton, P.E. of Haley & Aldrich, Phoenix, Arizona (hydrology,
extraction methods, production schedule).
-- Thomas L. Drielick, P.E. of M3 Engineering & Technology Corporation,
Tucson, Arizona (SX-EW treatment and related facilities).
-- Mr. Herb Welhener, MMSA-QPM, of IMC of Tucson, Arizona (geology, mineral
resource and reserve).
Each of the qualified persons has reviewed and approved the technical
information contained in this news release that is relevant to his area of
responsibility and verified the data underlying such technical information.
Engagement of Investor Relations Consultant
Excelsior also announces that Liolios Group, Inc. ("Liolios") has been engaged
to support the Company's investor relations activities.
Terms of Engagement
During the term of the agreement with Liolios, Liolios will collaborate with
Company management on a non-exclusive basis to provide services which will
include, but not be limited to, the development, implementation and maintenance
of an on-going stock market support system aimed at increasing investor
awareness of the Company's activities and to stimulate investor awareness in the
Company. Liolios will disseminate public information about the Company to key
investment professionals and private parties, and as well to Liolios's existing
database of business associates and investment professionals in both the United
States of America and Canada. In addition to the ongoing communication and
introduction of the company to key members of the financial brokerage and
investment community, they will conduct periodic conference calls, identify
investor conferences which may be of interest to the Company, and arrange group
or individual meetings with portfolio managers, analysts, stockbrokers, and
other investment professionals.
As compensation for the services provided under the agreement, the Company
agrees to pay fees of up to US$8,000 per month to Liolios, and the Company has
sufficient cash in its treasury to pay the fees for Liolios services. The
agreement with Liolios shall be automatically renewed on a month to month basis
unless either party provides thirty days' notice of termination to the other
party. The Liolios' engagement is subject to acceptance by the TSX Venture
Exchange.
Liolios is independent of the Company, does not hold any securities of the
Company and does not have any direct or indirect interest in the Company.
Liolios and it principals do not engage in market making activities and the firm
will restrict its services to public relations and investor relations
consulting. Liolios will provide its services from its offices located in
Newport Beach, New York and Toronto.
About Liolios Group
Liolios Group is a highly selective and comprehensive investor relations firm
specializing in micro to mid-cap companies. The firm aims to deliver superior
performance in corporate messaging and positioning, investor awareness, analyst
and financial press coverage and capital attraction. Founded in 1999 by J. Scott
Liolios, Liolios Group executives have extensive experience in financial and
investments and represent clients in a wide range of industries, including life
sciences/healthcare, consumer/internet retail, business services, digital,
media/software, clean technology, technology, natural resources and special
situations. For more information about Liolios Group, visit www.liolios.com.
About Excelsior
Excelsior is a mineral exploration and development company that is advancing the
Gunnison Copper Project. The Excelsior management team consists of experienced
professionals with proven track records of advancing mining projects into
production.
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, NI 43-101 Technical Report, Prefeasibility Study" dated February 14,
2014.
For more information on Excelsior, please visit our website at
www.excelsiormining.com.
ON BEHALF OF THE EXCELSIOR BOARD
"Stephen Twyerould"
President & CEO
Cautionary Note Regarding Forward-Looking Information
This news release contains "forward-looking information" concerning anticipated
developments and events that may occur in the future. Forward looking
information contained in this news release includes, but is not limited to,
statements with respect to: (i) the estimation of mineral resources and mineral
reserves; (ii) the robust economics, potential returns associated with the
Gunnison Project, (iii) the technical viability of the Gunnison Project; (iv)
the market and future price of copper; (v) expected infrastructure requirements;
(vi) the results of the PFS including statements about future production, future
operating and capital costs, the projected IRR, NPV, payback period,
construction timelines, permit timelines and production timelines for the
Gunnison Project, (vii) expected acid consumption rates; and (viii) the ability
to mine the Gunnison Project using in-situ recovery mining techniques.
In certain cases, forward-looking information can be identified by the use of
words such as "plans", "expects" or "does not expect", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not
anticipate", or "believes", or variations of such words and phrases or state
that certain actions, events or results "may", "could", "would", "might" or
"will be taken", "occur" or "be achieved" suggesting future outcomes, or other
expectations, beliefs, plans, objectives, assumptions, intentions or statements
about future events or performance. Forward-looking information contained in
this news release is based on certain factors and assumptions regarding, among
other things, the estimation of mineral resources and mineral reserves, the
realization of resource and reserve estimates, copper and other metal prices,
the timing and amount of future exploration and development expenditures, the
estimation of initial and sustaining capital requirements, the estimation of
labour and operating costs, the availability of necessary financing and
materials to continue to explore and develop the Gunnison Project in the short
and long-term, the progress of exploration and development activities, the
receipt of necessary regulatory approvals, the completion of the permitting
process, the estimation of insurance coverage, and assumptions with respect to
currency fluctuations, environmental risks, title disputes or claims, and other
similar matters. While the Company considers these assumptions to be reasonable
based on information currently available to it, they may prove to be incorrect.
Forward looking information involves known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
the Company to be materially different from any future results, performance or
achievements expressed or implied by the forward-looking information. Such
factors include risks inherent in the exploration and development of mineral
deposits, including risks relating to changes in project parameters as plans
continue to be redefined including the possibility that mining operations may
not commence at the Gunnison Project, risks relating to variations in mineral
resources and reserves, grade or recovery rates resulting from current
exploration and development activities, risks relating to the ability to access
infrastructure, risks relating to changes in copper and other commodity prices
and the worldwide demand for and supply of copper and related products, risks
related to increased competition in the market for copper and related products
and in the mining industry generally, risks related to current global financial
conditions, uncertainties inherent in the estimation of mineral resources,
access and supply risks, reliance on key personnel, operational risks inherent
in the conduct of mining activities, including the risk of accidents, labour
disputes, increases in capital and operating costs and the risk of delays or
increased costs that might be encountered during the development process,
regulatory risks, including risks relating to the acquisition of the necessary
licenses and permits, financing, capitalization and liquidity risks, including
the risk that the financing necessary to fund the exploration and development
activities at the Gunnison Project may not be available on satisfactory terms,
or at all, risks related to disputes concerning property titles and interest,
environmental risks and the additional risks identified in the "Risk Factors"
section of the Company's reports and filings with applicable Canadian securities
regulators.
Although the Company has attempted to identify important factors that could
cause actual actions, events or results to differ materially from those
described in forward-looking information, there may be other factors that cause
actions, events or results not to be as anticipated, estimated or intended.
Accordingly, readers should not place undue reliance on forward-looking
information. The forward-looking information is made as of the date of this news
release. Except as required by applicable securities laws, the Company does not
undertake any obligation to publicly update or revise any forward-looking
information.
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.
FOR FURTHER INFORMATION PLEASE CONTACT:
Excelsior Mining Corp.
JJ Jennex, Vice President, Corporate Affairs
604-681-8030 x240
info@excelsiormining.com
www.excelsiormining.com
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