Excelsior Mining - Drilling at Gunnison

Excelsior Mining (MIN.TO) reported the ADEQ notified the company it did not receive any appeals during the 30 day appeal window after granting the Aquifer Protection Permit, which was one of the two permits which remained outstanding. Now only the federal Underground Injection Control permit remains outstanding, which has to be granted by the EPA. The company now expects the EPA to make the draft UIC permit available for comments in the very near future.

With the copper price trading strongly above the $3 mark per pound, the economics of the Gunnison project will be stronger than ever. Using a copper price of $3, the after-tax NPV7.5% is estimated to be $831-947M depending on whether or not a value-adding acid plant would be included in the business plan. Using the current USD/CAD exchange rate, the $947M NPV represents almost C$1.2B, or C$7.1 per share. Even if the share count would double (which we don’t expext), the NAV/share will still be approximately C$4 per share.

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The author has a long position in Excelsior Mining. Excelsior also is a sponsor of the website. Please read the disclaimer

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