Excelsior Mining (MIN.TO) is in the final straight line to receive all necessary permits for the Gunnison copper project in Arizona. We already released an update confirming the company was awarded the Aquifer Protection Permit from the Arizona state agency, and the final permit, the Underground Injection Control permit, to be issued by the Environmental Protection Agency, is now within reach as well.
The EPA has issued a draft operating permit for the project which is now open for comments during a 30 day period. This indicates the company remains on track to have the full UIC permit in hand by the end of this year, where after it can immediately put the funding package together to get Gunnison up and running. As we pointed out in a previous update,;
‘With the copper price trading strongly above the $3 mark per pound, the economics of the Gunnison project will be stronger than ever. Using a copper price of $3, the after-tax NPV7.5% is estimated to be $831-947M depending on whether or not a value-adding acid plant would be included in the business plan. Using the current USD/CAD exchange rate, the $947M NPV represents almost C$1.2B, or C$7.1 per share. Even if the share count would double (which we don’t expect), the NAV/share will still be approximately C$4 per share.’
In a previous full report, we explained we thought the market was reluctant to award Excelsior the valuation it deserves until it was convinced the project could be permitted. Since April, the share price has increased by more than 50% as we are now just weeks away from the final operating permit whilst the copper price is trading firmly above $3 per pound.
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The author has a long position in Excelsior Mining. Excelsior is a sponsor of the website. Please read the disclaimer
