July 23, 2013
Excelsior Mining Corp. (TSX-V: MIN) (Frankfurt: 3XS) (OTCQX: EXMGF) ("Excelsior" or “the Company”) is pleased to announce that it has entered into a Share Purchase and Royalty Option Agreement (the “Agreement”) with Callinan Royalties Corporation (“Callinan”). Under the terms of the agreement, Callinan will invest $1.0 million in the Company by way of a non-brokered private placement and up to a further $21.0 million through the purchase of a staged gross revenue royalty (“GRR”) on the Gunnison Project (the “Transaction”).
Details of the Transaction
Under the terms of the Agreement, Callinan will purchase 6,250,000 common shares of Excelsior at a price of $0.16 per common share for gross proceeds of $1.0 million. Concurrently, Callinan will acquire a 0.5% GRR on the Gunnison Project (the “Initial GRR”) for consideration of $2.0 million payable to Excelsior. The closing of this $3.0 million initial investment is expected to occur on or before July 31, 2013. Callinan will have the option to invest up to an additional $19.0 million into Excelsior in exchange for a further 2.5% GRR on the Gunnison Project based on development milestones (1.5%) and a construction option (1%).
1.5% of the additional GRR is staged and based upon Excelsior meeting specific development milestones leading up to the construction of a mining facility including completion of a prefeasibility study and successful raise of additional financing from other sources, completion of hydrology and metallurgy models to feasibility study level and successful administrative review of the key permits (Aquifer Protection Permit and the Underground Injection Control and Aquifer Exemption Permit). Upon the completion of each milestone, Callinan will have the option to purchase an additional 0.5% GRR for $3.0 million each.
The construction option gives Callinan the right to buy a 1% GRR for $10.0 million following completion of the feasibility study, receipt of all required permits and Excelsior securing a firm commitment for 50% of the required capital required for mine construction. One quarter (0.25%) of the construction option will vest with each $3 million paid by Callinan to Excelsior pursuant to the initial investment or upon the exercise of any of the royalty options. Should all the royalty options be exercised, Callinan would acquire a 3% GRR on the Gunnison project for total proceeds of $21.0 million.
The exercise price of the construction option may be adjusted if the feasibility study recommends the construction of a plant with capacity lower than 80 million pounds of copper per year based on an agreed upon schedule.
In addition, Callinan has the right to require Excelsior to purchase all or part of the Initial GRR for $2,000,000 pro-rated for the portion of the GRR sold back to Excelsior and payable in common shares of Excelsior priced at $0.25 per share. This right will expire at the earliest of 24 months from the closing date or the exercise of the first royalty option.
Stephen Twyerould, President and CEO of Excelsior, stated, “Despite the current challenges of the junior mining market, we have successfully delivered to our shareholders a significant financing partner via a non-dilutive structure. We look forward to concluding the next task at hand, which is the completion of the Pre-Feasibility Study.”
The Chairman of Excelsior, Mark Morabito, added, “This transaction stands as confirmation of the financial viability of the Gunnison Copper Project. We welcome Callinan as our financial partner and we applaud them on their astute decision to join with us to develop this remarkable resource.”
Proceeds from the Transaction will be used by the Company to advance the Gunnison Project and for general and working capital purposes. The Transaction is subject to approval of the TSX Venture Exchange.
The Gunnison Copper Project is located in a remote section of Cochise County in southeastern Arizona. The focus of the project is the North Star deposit, which currently has a total Measured and Indicated mineral resource of 3.21 billion pounds of oxide copper (498 M tons at 0.32%) and an Inferred mineral resource of 0.83 billion pounds of oxide copper (156 M tons at 0.27%). This oxide mineral resource has the potential to be mined using in-situ recovery methods. Mineral resources which are not mineral reserves do not have demonstrated economic viability.
Excelsior is a mineral exploration company with a copper project located within the Copper Porphyry Belt of Arizona. The Gunnison Copper Project is situated close to the required infrastructure and its oxide copper resource has the potential to be mined using in-situ recovery methods. The Excelsior team consists of experienced professionals with proven track records of advancing projects into production.
Excelsior’s exploration work on the Gunnison Property is supervised by Dr. Stephen Twyerould, Fellow of AUSIMM, President and CEO of Excelsior, and a Qualified Person as defined by National Instrument 43-101 (NI 43-101). Dr. Twyerould has reviewed and approved the technical information disclosed in the “Project Summary” and “About Excelsior” sections of this news release.
Further details about Excelsior can be found at: http://www.excelsiormining.com. Further information about the Gunnison Copper Project can be found in the technical report filed on SEDAR at www.sedar.com entitled: “Gunnison Copper Project Preliminary Economic Assessment, NI 43-101 Technical Report” dated November 18, 2011.
ON BEHALF OF THE EXCELSIOR BOARD
President & CEO
For further information regarding this press release, please contact:
Excelsior Mining Corp.
Concord Place, Suite 300, 2999 North 44th Street, Phoenix, AZ, 85018.
JJ Jennex, Vice President, Corporate Affairs
T: 604-681-8030 x240
Cautionary Note Regarding Forward-Looking Information This news release contains "forward-looking information" concerning anticipated developments and events that may occur in the future. Forward looking information contained in this news release includes, but is not limited to, statements with respect to: (i) the estimation of inferred and indicated mineral resources; (ii) production from the Gunnison Project; (iii) the completion of a pre-feasibility study; (iv) the details of the Transaction; (v) the financial viability of the Gunnison Project; and (vi) the ability to mine Gunnison using in-situ recovery mining techniques are forward-looking statements.
In certain cases, forward-looking information can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Forward-looking information contained in this news release is based on certain factors and assumptions regarding, among other things, the estimation of mineral resources, the realization of resource estimates, copper and other metal prices, the timing and amount of future exploration and development expenditures, the estimation of initial and sustaining capital requirements, the estimation of labour and operating costs, the availability of necessary financing and materials to continue to explore and develop the Gunnison Project in the short and long-term, the progress of exploration and development activities, the receipt of necessary regulatory approvals, the completion of the environmental assessment process, the estimation of insurance coverage, and assumptions with respect to currency fluctuations, environmental risks, title disputes or claims, and other similar matters. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.
Forward looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include risks inherent in the exploration and development of mineral deposits, including risks relating to changes in project parameters as plans continue to be redefined including the possibility that mining operations may not commence at the Gunnison Project, risks relating to variations in mineral resources, grade or recovery rates resulting from current exploration and development activities, risks relating to the ability to access infrastructure, risks relating to changes in copper and other commodity prices and the worldwide demand for and supply of copper and related products, risks related to increased competition in the market for copper and related products and in the mining industry generally, risks related to current global financial conditions, uncertainties inherent in the estimation of mineral resources, access and supply risks, reliance on key personnel, operational risks inherent in the conduct of mining activities, including the risk of accidents, labour disputes, increases in capital and operating costs and the risk of delays or increased costs that might be encountered during the development process, regulatory risks, including risks relating to the acquisition of the necessary licenses and permits, financing, capitalization and liquidity risks, including the risk that the financing necessary to fund the exploration and development activities at the Gunnison Project may not be available on satisfactory terms, or at all, risks related to disputes concerning property titles and interest, environmental risks and the additional risks identified in the Company’s reports and filings with applicable Canadian securities regulators.
Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information is made as of the date of this news release. Except as required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward-looking information.