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Gwen Preston, Resource Maven, presentation at Metals Investor Forum - she delves into future copper deficit at 11:30 through 13:40. Totally unfathomable for copper prices not to rise in the intermediate future.
Eric Coffin providing macro look on the economy vs base/precious metals at the recent Metals Investor Forum. Interesting charts and perspective.
3d Quarter MD&A
Link to the SEDAR filing: https://www.sedar.com/CheckCode.do;jsessionid=0000AkbecSNajKTPXuFzUcy60NH:1884ter20
One note: The MD&A doesn't indicate that Altius exercised the additional 0.5% royalty option, which, as Jinxed described, had been exercised, per a conference call with Altius.
Next news should be the final closing of the Triple Flag financing deal, and then some serious construction work being started (they've already started some material ordering/site prep/tech design & engineering/hiring work).
I'm very optimistic on their 12 month timeline for starting production, with a fully vested/approved permit for up to the max 125 million lbs/yr (no need for further permitting to expand capacity to Stage III). I also like that Triple Flag insisted on warrants exercisable at $1.50 CAD, so one could say they have a rosy outlook on the share price appreciation in the intermediate future.
You too, Trofee. Again, I'm so sorry.
Trofee - my apologies. Wrong for me to communicate with you that way.
wtf are u talking about, Trofee? I post the info as objectively as I can (and will). I'm long on Excelsior Mining, so let's get that straight. I posted the info about the options being "granted", not exercised except for the corp secretary of a relatively small amount. As to what the granted options' exercise price is (in the future), I don't know, other than the info appears to indicate it can't be below the share price on the TSX when they were granted.
I'm not just going to post some bs rah rah stuff, like you see on another board.
I think they were just given (granted), not exercised. Sheila Paine, the corporate secretary, exercised some prior options (about 27,755 shares worth) @ $.30/share. The granted options were for about 600,000/individual.
For what it's worth, after my earlier post about the granted options, SEDI also reported Michael Haworth (director) was granted an option for 600,000 shares, option price unknown.
I think the option exercise price can't be less than the closing price on the TSX on the day the options are granted, but I'm not really sure due to the complexity of the 2017 Executive Compensation plan (see link to that doc from SEDAR: https://www.sedar.com/GetFile.do?lang=EN&docClass=30&issuerNo=00025928&issuerType=03&projectNo=02773880&docId=4322838) and the new 2018 Security-Based Compensation Plan that was approved (proxy vote) in June 2018 (see MD&A at SEDAR Link: https://www.sedar.com/GetFile.do?lang=EN&docClass=10&issuerNo=00025928&issuerType=03&projectNo=02783272&docId=4336783).
I provided a quick synopsis of the 2018-approved Security-Based Compensation Plan in an earlier, June 15, 2018 post: https://investorshub.advfn.com/boards/read_msg.aspx?message_id=141581911
New SEDI filings - options incentive stock to the directors/company execs, except for Sheila Paine who exercised her options for $.30/share. Sweet gig for the directors (600,000 shares each, except Morabito who gets 850,000 because he's both Board Chairman and company exec). Hope none of them are affiliated with Pershing 143.
Filing date: 2018-11-06
Transaction: 2018-11-02
$MIN
Excelsior Mining Corp.
DuVal, Fred Price
4 - Director of Issuer
Options Incentive Stock
50 - Grant of options
+500,000 vol
600,000
Filing date: 2018-11-06
Transaction: 2018-11-05
$MIN
Excelsior Mining Corp.
Paine, Sheila Margaret
5 - Senior Officer of Issuer
Options Incentive Stock
51 - Exercise of options
-40,000 vol
30,000
Filing date: 2018-11-06
Transaction: 2018-11-02
$MIN
Excelsior Mining Corp.
Renwick, Robin
4 - Director of Issuer
Options Incentive Stock
50 - Grant of options
+600,000 vol
1,100,000
Filing date: 2018-11-06
Transaction: 2018-11-05
$MIN
Excelsior Mining Corp.
Paine, Sheila Margaret
5 - Senior Officer of Issuer
Common Shares
51 - Exercise of options
$8,326.50
+27,755 vol
$0.30 each
27,755
Filing date: 2018-11-06
Transaction: 2018-11-02
$MIN
Excelsior Mining Corp.
Kinley, Colin Brent
4 - Director of Issuer
Options Incentive Stock
50 - Grant of options
+580,000 vol
1,230,000
Filing date: 2018-11-06
Transaction: 2018-11-02
$MIN
Excelsior Mining Corp.
Axcell, Stephen
4 - Director of Issuer
Options Incentive Stock
50 - Grant of options
+600,000 vol
600,000
Filing date: 2018-11-06
Transaction: 2018-11-02
$MIN
Excelsior Mining Corp.
Kolbe, Jim
4 - Director of Issuer
Options Incentive Stock
50 - Grant of options
+600,000 vol
1,250,000
Filing date: 2018-11-06
Transaction: 2018-11-02
$MIN
Excelsior Mining Corp.
Dahl, Barry
5 - Senior Officer of Issuer
Options Incentive Stock
50 - Grant of options
+200,000 vol
200,000
Filing date: 2018-11-06
Transaction: 2018-11-02
$MIN
Excelsior Mining Corp.
Haworth, Michael John
4 - Director of Issuer, 6 - Director or Senior Officer of 10% Security Holder
Options Incentive Stock
50 - Grant of options
+600,000 vol
600,000
Filing date: 2018-11-06
Transaction: 2018-11-02
$MIN
Excelsior Mining Corp.
Morabito, Mark Joseph
4 - Director of Issuer, 5 - Senior Officer of Issuer
Options Incentive Stock
50 - Grant of options
+850,000 vol
850,000
True … volume was up on the US Market, but with slight share price drop. Need copper prices to go up again, and some more "marketing" of the company's future lucrative returns. Seems retail investors aren't that excited with junior mining copper producers.
I wouldn't mind an M&A, but at decent returns, which I think will be unlikely until Excelsior Mining starts producing copper cathode with a decent recovery rate. Just hope the company keeps construction costs and time schedule on target.
Am getting a little disheartened by the share price action (or lack thereof). Looked at Amerigo (ARREF on OTCBB, ARG on TSE) financials and current share price/market cap, and the recent share price/market cap valuation for EXMGF makes a little more sense. Hell, Amerigo is already producing copper and moly, and about to expand production very soon.
Amerigo's downside is their debt burden and trying to maintain enough liquidity to pay the debt burden. Fortunately, EXMGF didn't incur that debt burden, but EXMGF's projected Stage I production is less than what Amerigo produces (and about to produce much more) and at a very decent cost/lb.
Going to be a long year waiting for the first lb of copper to be produced by EXMGF, and not sure how steady EXMGF's share price will hold.
Posted on the CEO.CA #MIN channel. Link to Matt Geiger's July 2018 update letter to MJG Capital limited partners. See pages 28-31 discussing Excelsior Mining. Now, if we can only send that file by email to every investor … :)
http://mjgcapital.com/wp-content/uploads/2018/08/July-2018.pdf
The following depends on the recovery rate/amount once the system is optimized, but I foresee them going from Stage I to Stage III, bypassing Stage II, if the recovery rates/amounts are excellent
Primary reason -- the CAPEX improvements needed for Stage II are not really accretive (add-on) to the CAPEX improvements needed for Stage III ops (per EXMGF CEO during one of the town hall calls when asked that question).
CAPEX amount for Stage II (75 million lbs/yr capacity) is $145.8 million (USD).
CAPEX amount for Stage III (125 million lbs/yr capacity) is $231.3 million (USD).
So, for an additional differential amount that is just shy of $90 million, they could skip the CAPEX fund raising for Stage II and increase their capacity output five-fold by using a combo of internal cash flow/3d party funding for $231 M. However, if things are going so swimmingly and if copper prices haven't tanked, I imagine they'll be acquired by a larger firm before they can turn the key on Stage III ops.
Do you have an actual copy of the financing agreement? I couldn't find it on SEDAR or Excelsior Mining's website. If you found it online, could you provide a link? Thanks much in advance.
fwiw - new Seeking Alpha article by Peter Arendas.
https://seekingalpha.com/article/4216926-excelsior-mining-secures-investor-friendly-financing-package?page=3
Glad you enjoyed it, Doug. Makes me feel so old and simple minded, when you read what these tech whizzes can do nowadays.
Today, I was trying to start a tutorial on Python software (simplistic basic programming language) and they nearly lost me with the Intro.
Thanks, Jovko. I assume you've read the agreement, then. Agree that the Buy Down option is a must, assuming they have the cash flow to do so.
Any opinions by you, or anyone else on this board, on whether EXMGF will try for a listing on NASDAQ or ASE soon? If they do, there will likely be a reverse split. Would make the stock more palatable to certain institutional investors, but result in more regulatory reporting headaches and cost.
Curious to see if Callinan Royalties Corp. exercises the remaining 0.5% gross revenue royalty (GRR) (remaining construction option available to Callinan which already owns a 1% GRR of future Excelsior Mining Gunnison project output). Will cost them about $3.8 million (USD) for the 0.5% GRR.
Not sure where you arrive at Excelsior having to pay $13M per year for 20 years.
Differing scenarios, depending on whether the Expansion Upfront Deposit Option (an additional $65M funding if Excelsior output > 50M lbs/yr) for Triple Flag is exercised, or if Excelsior exercises its Buy Down option right, but remember that any % of copper output provided to Triple Flag is bought by Triple Flag at 25% of copper spot price (did you remember to factor that in?).
Quickly ran through some numbers, using assumption of $3.00 USD/lb for copper, and assuming that when the Expansion Option is exercised, then the full $65M amount of additional funding by TF will be provided:
---------------------------
Scenario I - If Expansion Option AND Buy Down options are not exercised by either Triple Flag or Excelsior:
Stage I (25M lbs/yr) - 16.5% of copper output sold to Triple Flag at 25% price = $9.281M or about 12.38% of $75M annual gross proceeds
Stage II (75M lbs/yr) - 5.75% of copper output sold to TF at 25% price = $9.304M or about 4.135% of $225M annual gross proceeds
Stage III (125M lbs/yr) - 3.5% of copper output sold to TF at 25% price = $9.844M or about 2.625% of $375M annual gross proceeds
------------------------
Scenario II - If Expansion Option exercised by TF, and Excelsior does NOT exercise Buy Down option
Stage I - same as in Scenario I
Stage II - 11% of 75M lbs/yr of copper output sold to TF at 25% price = $18.56M or about 8.25% of annual gross proceeds
Stage III - 6.6% of 125M lbs/yr of copper output sold to TF at 25% price = $18.56M or about 4.95% of annual gross proceeds
----------------------
Scenario III - Expansion Upfront Deposit exercised by TF, AND Excelsior exercises Buy Down option (I didn't factor in the cost Excelsior would have to pay for exercising the Buy Down option in terms of the 15% IRR floor guarantee for 50% of TF's investment).
Stage I - same as in Scenario I
Stage II - 5.5% of 75M lbs/yr of copper output sold to TF at 25% price = $9.281M or about 4.125% of annual gross proceeds
Stage III - 3.3% of 125M lbs/yr of copper output sold to TF at 25% price = $9.281M or about 2.475% of annual gross proceeds
------------------
Scenario IV - If no Expansion Upfront Deposit exercised by TF, but Excelsior exercises the Buy Down option (I didn't factor in the cost Excelsior would have to pay for exercising the Buy Down option in terms of the 15% IRR floor guarantee for 50% of TF's investment).
Stage I - same as in Scenario I
Stage II - 2.875% of 75M lbs/yr of copper output sold to TF at 25% price = $4.852M or about 2.156% of annual gross proceeds
Stage III - 1.75% of 125M lbs/yr of copper output sold to TF at 25% price = $4.92M or about 1.313% of annual gross proceeds
-----------------------
The way I read the Press Release (didn't actually read the agreement), Triple Flag has the unilateral or preemptive right to exercise the Expansion Upfront Deposit option if Excelsior's annual copper output exceeds 50M lbs/year. Not sure if that means only if Excelsior Mining requests the additional funding (e.g., what if Excelsior decides to increase production to exceed 50M lbs/yr, but wants to use other sources of funding for CAPEX? Are they stuck with TF if TF says they'll provide the additional $65M funding, notwithstanding Excelsior's preference to possibly seek another source of expansion funding?).
Whether the above CAPEX funding approach is the best deal Excelsior Mining could have obtained for its shareholders, I honestly don't know, but have to assume that it was. Saving grace is that I'm sure Greenstone was involved in all of the negotiations, and Greenstone has a similar investor desire to protect its equity value.
Let's see if Greenstone exercises their preemptive right to buy some or all of the 13,818,977 shares (at $.72 USD) to maintain their % asset holding in Excelsior Mining. To me, it's a no-brainer for Greenstone to do so, given today's rise in share price.
Some info on Triple Flag CEO, Shaun Usmar, from Global Mining Observer:
Elliott’s New Royalty Group Open to IPO
CEO Shaun Usmar has closed $700m of royalty deals in two years
There's a large new player in the royalty and streaming market. That's the message coming from South African Shaun Usmar, who has closed more deals by dollar value than perhaps anyone else in the mining industry. It was on a trip through New York that he stopped by at the office of hedge fund Elliott (“just out of curiosity,” he says), spending four hours discussing deal flow. Before he knew it, Usmar had packed in his position at Barrick to launch a new $1bn royalty company, Triple Flag, backed by Elliott's capital. In little over two years the new business has gone through more than 250 transactions, doing detailed work on 90 deals and closing five worth $700m in gold and copper. “It's opportunistic,” Usmar says, fitting in an interview between calls with partners. “We have seen many transactions and continue to pursue deals that are well in excess of a billion dollars.” Triple Flag is currently private, but has already bought 32 royalties and streams generating $45m per annum, and may one day be listed. “Everything we buy we look at on a buy-to-hold basis, but we've built our own internal equity models and we understand if we're going to add something what it will mean to our broader portfolio, how that stacks-up to our notional peer group, and what that would mean for value accretion. We're doing things in a very deliberate, careful way, so that if the most valuable exit is through the public markets, we can do that very easily.” Every deal is customised, Usmar explains. “I come at this with a mining CFO hat, understanding that people have choices and markets evolve, so each time we put proposals together we usually are providing multiple alternatives.” He first went into mining finance having done an MBA at Kellogg in the US. It was the 1990s and all his former classmates went into banking and tech, but South African mining group Billiton was expanding overseas and invited him to go into M&A in their new head office in London. “We had a small core team so you really got a front-row seat.” Since then, he has worked on more than $100bn of deals, including Billiton's merger with BHP, creating the world’s largest mining company, but when finance director Mick Davis left to launch his own firm, Xstrata, Usmar was one of the first seven to join and was soon juggling the finances on its $19bn acquisition of nickel giant Falconbridge. “We bedded that down, worked through the financial crisis and reset the cost structure.” Still in his 40s, Usmar has also fitted in a stint as Barrick Gold's finance director, lopping $4bn off its debt and lowering its free cash flow breakeven point from $1,700 to $1,100 per ounce. “We had to get the company back on track… It was a busy but rewarding period.” Joining forces with Elliott, known as one of the world's most aggressive and relentless investors, was perhaps an inevitable move. “I wouldn't have left Barrick just to collect a salary. I think it's a great time to be building a mining business.”
http://globalminingobserver.com/people-203/
OT: Muy excellente journalistic reporting by Bloomberg in article (link below) on how China's special army unit implanted tiny microchip onto the most prevalently used network server motherboards by numerous major commercial companies (e.g., Apple, Amazon) and by DoD and even CIA (lol). Holy Grail of hacking -- undetectable hardware hacking into network servers. Still ongoing investigation by DoJ, FBI, etc. Very intriguing how the presence of the chips were discovered by a 3d party security contractor (for M&A vetting) for Amazon. Has photos showing the chip/chip size in relation to the server motherboards.
https://www.bloomberg.com/news/features/2018-10-04/the-big-hack-how-china-used-a-tiny-chip-to-infiltrate-america-s-top-companies?srnd=premium
Despite the recent fall in copper prices, the Antofagasta CEO says copper price outlook in the medium term is "quite positive" -- expects $3 USD or higher in the medium term. Link below to Bloomberg's interview of the CEO:
https://www.bloomberg.com/news/videos/2018-10-30/antofagasta-ceo-says-copper-outlook-quite-positive-video
Freeport McMorran forecasting more copper deals. From Twitter post with link to FT article.
Deals in the #copper mining industry are almost inevitable as companies scramble to gain access to new deposits, says Freeport https://t.co/MVTOBgwtCU
— Mining Analysts (@MiningAnalysts) October 28, 2018
Thanks again, Walter. Hope you have a great weekend.
Many thanks, Walter. I'm extremely glad the presentation went well. Great photo of you two, also.
Did Stephen provide any more update on the financing, such as expected debt/equity ratio or timing?
Again, thanks so much, and GLTU on your investments.
Walterc - Is the Excelsior Mining CEO presentation to a group of investors you were trying to arrange in Belgium happening today? If so, can you let us know how the presentation was received by the folks you were able to recruit for the meeting? Thanks in advance.
Bloomberg article: Why everyone's bullish on copper
https://www.bloomberg.com/news/articles/2018-10-08/from-blenheim-to-blackrock-here-s-why-everyone-s-bullish-about-copper
Heh … I have already bought and am holding. Have about 330 thousand shares, but avg price I paid is still more than today's share price.
Also, note the appeal is dismissed "with prejudice". That's a very good thing (once dismissed, appellants are foreclosed from appealing again on those arguments).
Hot damn! Glad to see the permit appeal resolved. Saves about 2 months on EAB/permit appeal resolution timeline, and provides certainty on the outcome of the appeal.
Just need EPA Region 9 to accept the settlement agreement between appellants and Excelsior Mining, and incorporate the additional obligations called for in the agreement into the final UIC permit. Week or two?
Hope to see financing announcement soon.
Don't think it's a matter of manpower. It's the timelines specified in EPA's and EAB's regulations. If EPA Reg 9 meets the October 12th deadline for filing a reply brief, I'll be pleased. I'll be more pleased if the reply brief sounds very confident that Region 9's permit decision should be upheld by the EAB.
Pretty much up to the attorneys now.
Yeh, I agree that is the key issue raised by the appellant group in their appeal -- whether EPA Region 9 performed an adequate cumulative impact analysis. EPA Region 9 clearly didn't do a stand alone, detailed cumulative impact analysis like EPA Region 8 did for the Dewey-Burdock UIC permit, but I think the reason Region 8 did a separate one is that the info was probably a copy/paste from the cumulative impact analysis that was in the NEPA environmental impact statement prepared by the project owner for BLM and the NRC.
I guess we'll have a better idea of how EPA Region 9 feels about the adequacy of its cumulative impact analysis for Excelsior Mining's UIC permit on October 12 or someday thereabouts when we see the EPA Region 9 replay brief posted on the EAB website.
No, I think your timeline is too optimistic.
As others have posted, Excelsior Mining and EPA Region 9 have until October 12 to file their response briefs. Then, the appellants have until November 5 to file its reply to Excelsior's/EPA Reg 9's response briefs. The Environmental Appeals Board (EAB) will then make a decision, based on the appeal, response, and reply briefs and the administrative record that has been compiled.
Expect an EAB decision in early December 2018, unless the appellants decide to drop the appeal or reach some sort of settlement with Excelsior/EPA Reg 9 before then.
Just a fyi -- I also expect Taseko to produce the first plate of copper from its Florence AZ project in December, which helps confirm the viability of using ISR approach within that region for copper production.
Good timing, and great price, Walter.
Article on copper pricing (past, present, and future) by Andrew Hecht on Seeking Alpha:
https://seekingalpha.com/article/4203241-copper-sits-near-lows?app=1&isDirectRoadblock=false
Yes, but I don't like the way EPA Region 9 informed the EAB. They indicated that the petitioners (appellants) were open to ADR, but that Excelsior Mining said "nope". Kind of casts Excelsior Mining in a negative way -- painting Excelsior Mining like they weren't amenable to reasonable discussions, or something like that. Who knows which members on the EAB like ADR as an option to consider before forcing the EAB to make a decision?
Why didn't EPA Region 9 just say that ADR was not an option as all the parties couldn't agree to ADR, without specifying which party was saying "go pound sand"?
Article: BHP averts strike at Escondida. (But still needs rank & file vote of latest offer)
http://www.mining.com/copper-price-escondida-deal-reached/
Mining.com article - "Mining and metals markets crater as copper price enters bear market"
http://www.mining.com/mining-metals-markets-crater-copper-price-enters-bear-market/
But extract from the article below:
In a note BMO Capital Markets, an investment bank, said the price movement in copper and other base metals “seems to be driven by financial markets, and lack fundamental basis”:
“We simply have to look to commodities set by the physical market (chrome, vanadium, tungsten, steel rebar) to find price robustness reflecting underlying demand that seems to be okay.
"Regarding copper specifically, the looming deficit of 415kt forecast this year will, in our view, cause new higher cost projects and greater scrap substitution, all of which demand a higher price than where copper is currently trading."
You're probably right about the effect being negligible. There may be some increased performance bond premium costs that factor in, but again, I think those would have minimal effect on the all-in-cost.
Little disconcerting, though, the hushed unsuccessful attempt by Excelsior Mining to seek a belated amendment to the ADEQ APP permit to try to qualify as an innocent land purchaser to avoid the added environmental cleanup costs that should have been the prior owner's responsibility. I saw the proposed ADEQ notice of the amendment application, but never heard/saw the final result of the belated amendment attempt. I assume with the additional asset restoration costs in the just released interim financial report, the attempt failed. Oh well.
fyi - The only sticky appeal issue raised by the appellants is the argument that EPA Region 9 should have analyzed, in the administrative record, the cumulative effects of the ISR and Johnson Camp activities. They referred to a cumulative effects analysis that EPA Region 8 did for the Dewey-Burdock uranium ISR UIC area permit in South Dakota -- EPA Region 8 published a formal 151 page cumulative effects analysis, most likely due to the tsunami of comments/voiced concerns about that project (I think there were over 1500 pages of comments on that area permit). Plus, the NRC had already conducted a NEPA EIS, so EPA Region 8 probably just used a lot of cumulative effects analysis that the NRC did as part of its licensing.
EPA Region 9 correctly pointed out that it didn't have to do a formal cumulative effects analysis like EPA Region 8 did. 40 CFR 144.33(c) is the regulatory requirement for cumulative effects consideration in an area UIC permit:
40 CFR 144.33(c)
"(c) The area permit may authorize the permittee to construct and operate, convert, or plug and abandon wells within the permit area provided:
* * *
(3) The cumulative effects of drilling and operation of additional injection wells are considered by the Director during evaluation of the area permit application and are acceptable to the Director."
So, what cumulative effects are the appellants contending EPA Region 9 didn't adequately consider? I think they're saying that the Wilcox Basin groundwater level is diminishing on a regional level due to regional use by others and other factors beyond Excelsior Mining's control, and that the expected extraction of groundwater from the Gunnison ISR project may have some incremental effect on the quantity (not quality) of groundwater which EPA Region 9 should have taken a closer look at. That "look" by EPA Region 9 should have been addressed somewhere in the administrative record, which the appellants contend Region 9 didn't.
That issue (cumulative effects analysis regarding groundwater extraction/level) is going to be the one that gets looked at the hardest by the Environmental Appeals Board and, I think, EPA regional counsel and Excelsior's counsel. Hopefully, the modelling data and something in the public hearing transcript or other document in the admin record adequately addresses the groundwater quantity issue.
If you want to see the draft cumulative effects analysis that EPA Region 8 did for the Dewey-Burdock uranium ISR project, see info at URL below:
https://www.epa.gov/uic/additional-administrative-record-documents