A couple thoughts about yesterday's price action.
The price of copper is now $0.38 higher than the price used in the Feasibility Study at $3.13/lb vs $2.75/lb used in the FS. A major derisk occurred yesterday with the granting of the ADEQ permit. Excelsior is still waiting on the Underground Injection Control (UIC) permit from the EPA, but it is commonly believed that the EPA permit will be granted without any challenges within the next couple of months.
While I am disappointed in the market reaction to the PR, it’s not uncommon to have traders jump in following a major press release and trade the stock down on the news attempting to scalp a few dollars from unsophisticated investors that become alarmed. Fundamentally, Excelsior’s situation is very good, IMO.
The PPS projections I've previously posted indicate a projected valuation of US$4.58/share when Excelsior achieves production using the current copper price as a basis. Even if we take 75% of that to be conservative, that still comes in at US$3.44/share, which is 3.2X higher than yesterday’s closing price.
At some point (I don’t know when), there will be a major price re-rating on Excelsior to bring the price more in line with the value of the company. That point may begin with the EPA permit grant, securing financing for the project, starting mine construction or when first copper comes out of the ground in less than 18 months.
What I do know is that Stephen Twyerould and Roland Goodgame are both engineers and are - by training and mindset - risk-averse. They have not over-stated the premises put forward in the Feasibility Study. Greenstone Resources is a group of highly-successful mining engineering executives that own >50% of the enterprise. They would not have put $36M into Excelsior without knowing exactly what they were buying.
I am confident that the mine will be built on schedule and that it will be very successful.
PG
