Excelsior signs $75m financing for Gunnison in Arizona
Excelsior Mining plans to complete construction at its Gunnison copper project in south eastern Arizona and enter production over the next year after agreeing to a US$75 million project financing package with Triple Flag Mining Finance.
Triple Flag will buy a US$65 million copper stream on Gunnison and US$10 million in shares from Excelsior. The package includes an option for Triple Flag to fund an additional US$65 million for the project’s second stage expansion as well as for Excelsior to buy down 50% of the stream.
The project contains 709 million probable tonnes grading 0.29% copper for 4.5 billion lb. copper.
Excelsior(TSX: MIN; US-OTC: EXMGF) estimates it would initially produce 25 million lb. copper per year at Gunnison. It would sell 16.5% of that to Triple Flag at 25% the spot price of copper. Copper is currently valued at US$2.68 per pound.
Excelsior could expand production to 75 million lb. per year under a phase two plan and 125 million lb. per year under a phase three plan. In stage two it would sell triple Flag 5.75% of its yearly copper production, and 3.5% of it in phase three.
According to a January 2017 feasibility study, Gunnison has a US$807 million after-tax net present value at a 7.5% discount rate and a 40% after-tax internal rate of return. Initial construction will cost US$46.9 million, with payback in 2.8 years.
Shares of Excelsior are currently trading at $1.05 with a 52-week range of 82¢ to $1.50. The company has a $217 million market capitalization.