Very rarely I come across a junior that simply seems to tick almost all boxes, and it looks like new sponsor Kutcho Copper (KC.V) is doing just that. From project profitability to management, from financials to geology, from location to metal prices, it comes across as a genuine display of quality and excellence. CEO Vince Sorace certainly made the most of Capstone Mining's strategy change a few years ago not to develop relatively smaller, non-core assets, and now looking to divest assets to clean up their troubled balance sheet.
There is no way getting around one particular person when you attend most large resource investment conferences the last few years, and that is Gianni Kovacevic. As an entrepreneur, speaker, author, mining executive traveling all over the world, he must be one of the busiest and best connected persons I know, but he is also one of the most friendly and enthusiastic characters you can possibly meet in this industry.
Gianni Kovacevic (far right) with Ross Beaty (Source CEO.CA)
Kalabak region, Bulgaria
Sometimes excellent exploration projects are being dropped by major resource plays during downsizing efforts in downturns. Some of those projects are easily forgotten, but other projects are almost immediately picked up by other, usually (much) smaller, companies that have been waiting for this specific opportunity to occur.
Excelsior Mining experienced significant positive sentiment of late, with several good reasons to back it up, too. For starters, the company is closing in on the announcement of a Feasibility Study, which is expected in December 2016. After talking to management I got the impression that FS economics wouldn't necessarily differ a lot from the very strong PFS results, which would be impressive again at smaller margins of error. Another reason is the election of Donald Trump, who seems to be pro-mining and against long-winding procedures of projects (which he probably hates as a real estate developer), which could bode well for mining projects in permitting stages in more or less difficult jurisdictions. The most important one was the copper price printing new 52w highs for some weeks now:
- Excelsior Mining owns the unique Gunnison in situ recovery (ISR) copper project in Arizona, and has strong financial backers
- The Gunnison project isn't just the only advanced standalone ISR copper project owned by a junior, but it also has the best economics of any undeveloped copper project worldwide
- The recently updated PFS indicated excellent figures at just $2.00/lbs copper: an after-tax NPV7.5 of $563M and an after tax IRR of 26.2%
- The company performed lots of testing to solidify those figures
- Excelsior doesn't seem to risk the same local opposition regarding permitting issues as former nearby competitor Curis did on its Florence project, but it has suffered from longtime negative perceptions on its UIC/APP permitting procedures
- I will discuss why these perceptions could be unwarranted.
- Reservoir Minerals is exploring numerous prospects in South-east Europe for base/precious metals, next to a few early-stage gold prospects in Africa.
- Its flagship project is called Timok, located in Serbia. A small part of it sports an already impressive resource of 3.7B lb copper @2.6% Cu, and 3.16M oz gold @1.5g/t.
- Existing drill results indicate a much bigger, deep porphyry deposit around the existing mineralized zone.
- Both Reservoir Minerals and giant copper producer Freeport-McMoran recently concluded the JV in order to take the project to scoping study level (PEA).
- The investment community has been waiting for a Freeport buyout since the maiden resource estimate in Jan 2014, my guess is Freeport needs more confirmation.