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321gold.com
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Excalibur Resources Jordan Roy-Byrne, CMT While Excalibur owns two projects in Canada, it is a focused on the development of a joint venture operation in Pinos, Zacatecas, a historic mining district in Mexico. The company is permitted for the production at its 49% owned Minera Catanava project and the 250 tpd processing plant is currently being installed for production this quarter. The Catanava project is a joint venture between Excalibur, who is providing the financing and Minera Apolo S.A. de C.V. who is providing the property, asset and management of the project. Excalibur is pursuing the micro-mining approach which is the search for small, near surface deposits which can be extracted at a low cost. For this type of operation, the deposit needs to be relatively high grade and near surface. All permits have been received and much of the construction has been completed. Production appears to be imminent and the performance of the stock is reflecting such. Total operating costs are expected to be $100/ton, excluding silver credits which equates to ~$440/oz Au. Excalibur’s share of the cash flow (at $1700-$1800 Gold) would nearly equate to its current market cap. As a result, the company is planning on paying a dividend. In addition to production, the company in the next few months should report its first 43-101 estimate which will facilitate its application for listing on the TSX Venture exchange. Excalibur is targeting a resource of 300K oz Au. The performance of the stock has reflected the positive developments. Shares surged from $0.09 to $0.22 before pulling back to $0.14 recently. The stock has climbed to $0.155 on strong volume. Unfortunately we see one drawback. In going through the company’s financial statements we discovered that the company’s numerous warrants are exercise-able at prices ranging from $0.15 to $0.40. Roughly 13M warrants are exercise-able between $0.15-$0.20 while another 11M are exercise-able at $0.30. The share structure is the obvious risk. Considering the potential resource and cash flow, we value the company at $25-$30 Million which based on 80M shares comes out to $0.30-$0.37. We think the stock is at least a double, and probably more by the time this sector returns to favor and valuations improve across the board. However, the numerous warrants will prevent this stock from being anything beyond an immediate double. This piece was extracted from the "Top 5 Near-Term Small Producers Update" from The Daily Gold Premium. Excalibur Resources (CNSX: XBR) ### Jordan Roy-Byrne, CMT Jordan Roy-Byrne, CMT is the editor and publisher of The Daily Gold. Visit the newsletter page for information on his premium service. 321gold Ltd |
