Excellon Resources

Website: www.excellonresources.com
Primary ticker: TSX:EXN; OTC:EXLLF
Stage of development: Exploration, Development, Production
Commodity: Gold, Silver
Project to promote: Kilgore Project
Project location: United States, Mexico, Germany

Live financials

Cash: USD$10M
Debt: USD$6M

Major shareholders:
Eric Sprott – 11.8%
Chris Lee-Barber – 3%
Agnico Eagle Mines – 1.9%
Roger Norwich – 1.2%
Craig Lindsay – 1%

Excellon’s vision is to create wealth by realizing strategic opportunities through discipline and innovation for the benefit of our employees, communities and shareholders. The Company is advancing a precious metals growth pipeline that includes: Platosa, Mexico’s highest-grade silver mine since production commenced in 2005; Kilgore, a high quality gold development in Idaho with strong economics and significant growth and discovery potential; and an option on Silver City, a high-grade epithermal silver district in Saxony, Germany with 750 years of mining history and no modern exploration. The Company also aims to continue capitalizing on current market conditions by acquiring undervalued projects.

Management Profile

Brendan Cahill, President & CEO

President since 2012, Mr. Cahill has led the turnaround of the Platosa mine, Mexico’s highest grade silver mine. He has also advanced Excellon’s portfolio to consolidate the Evolución Project in Mexico, a 45,000 hectare property on the northern Fresnillo silver trend, option the Silver City Project in Saxony, Germany, a 164 km2 high-grade epithermal silver district that was mined for 750 years with no modern day exploration, and acquire Otis Gold and the Kilgore Project in Idaho, a high quality gold development project with significant growth potential. Mr. Cahill began his career at Davies Ward Phillips & Vineberg LLP, where he provided advice on transactions totaling over $15 billion.


What is your rationale for attending 121 Mining Investment?

Marketing Excellon’s high quality pipeline of precious metals projects, which afford direct exposure to silver production, growth through gold development and multiple discovery opportunities.


What recent news would you like to highlight to investors attending?

Our recent acquisition of Otis Gold adds the Kilgore Gold Project in Idaho to our portfolio. Kilgore is a low risk, high return gold development project with US$223M NPV5%, 63% IRR (after-tax @ $1,600 Au) with modest cap-ex of $81M. The deposit has similar characteristics to Kinross’ Round Mountain Mine (15M oz Au mined since 1977) with exploration upside for resource expansion and new discoveries.

Drilling is expected to begin at the Silver City Project by the end of June 2020. Located in a high-grade epithermal silver district in mining friendly Saxony, Silver City has over 750 years of mining history and no modern exploration.


What are your key goals for the next 3, 6 and 12 months?

3 Months:

• Commence the first-ever drilling campaign on our Silver City Project in Saxony, with the aim of discovering and defining the extension of a high grade epithermal silver system
• Integrate the Kilgore Project into our development and exploration plans and build capacity to advance geophysics and field studies
• Further optimize the Platosa Mine during the ongoing COVID-19-related suspension of operations, focussing on reducing electricity costs and operational enhancements, along with market strategies to reduce costs
• Uplist to the NYSE to materially improve liquidity and market depth

6 Months:

• Commence resource expansion and structural-focussed drilling for high-grade at the Kilgore Project
• Advance baseline studies in support of an eventual PFS on the Kilgore Project
• With initial success, further advance drilling for high-grade silver at Silver City
• Realize material operational costs savings at the Platosa Mine
• Advance resource update from recent drilling on the Evolución Project

12 Months:

• Continue our dual track approach to explore and grow the resource at Kilgore and advance toward a PFS-level study while actively exploring regionally to define a significantly larger gold system
• Begin resource delineation drilling at Silver City, assuming initial success
• Return the Platosa Mine to low-cost cash flow generation, assuming supportive metal prices
• Publish updated resource estimate on the Evolución Project, including the recently discovered Lechuzas zone


What do you see as the key risks and challenges facing your company at the moment and how are you overcoming these?

Silver price and the widening silver:gold ratio are the most significant mid-term the Company currently faces. We are taking steps to reduce costs materially at the Platosa operation, while increasing our precious metals exposure and resource base and ensuring that we have capital to advance our exploration projects into a precious metals bull market that craves resource growth and pays for discoveries.


What do you think makes your company such a compelling investment?

Excellon has a compelling growth pipeline that (i) affords direct exposure to silver production, which is currently undervalued relative to gold, but historically likely to generate greater returns as the precious metals cycle advances, (ii) a gold development pipeline with exceptional economic metrics at current gold prices and (iii) multiple discovery opportunities on the world class CRD and Fresnillo trends in Mexico and up-and-coming Idaho and Saxony regions, all known for multi-million ounce precious metal discoveries.

Analyst Insight – provided by Independent Investment Research

Excellon Resources is a TSX-listed company that is advancing a precious metals growth pipeline that includes: Platosa, Mexico’s highest-grade silver mine since production commenced in 2005; Kilgore, a high-quality gold development in Idaho with strong economics and significant growth and discovery potential; and an option on Silver City, a high-grade epithermal silver district in Saxony, Germany with 750 years of mining history and no modern exploration. The company also aims to continue capitalizing on current market conditions by acquiring undervalued projects.

For calendar 2019, the company generated revenues of $26.5 million, compared to $24.3 million in 2018, along with silver equivalent production of 2.0 million ounces, compared to 1.9 million Ag-Eq ounces in 2018. During 2019 the company sold Ag-Eq ounces payable of 1.8 million ounces, compared to 1.6 million Ag-Eq ounces payable in 2018.

Mined tonnage during 2019 was 30% higher at 74,876 tonnes, a record for the Platosa Mine, compared to 57,475 tonnes during 2018. Total tonnage processed, including toll milling, increased by 11% to 89,478 tonnes, a record for the Miguel Auza Processing Facility, compared to 81,004 tonnes in 2018.

Total cash cost per Ag oz payable during 2019 was $13.01, compared to $9.48 in 2018 and AISC net of by-products per Ag oz payable was $23.57, compared to $20.69 in 2018.

The company’s 2020 exploration priorities include resource growth and progressing its multiple projects by drill-testing high-priority targets, upgrading existing targets and continuing to develop new targets through field work and data interpretation.

In Mexico, exploration plans include ongoing underground drilling for resource definition and expansion at Platosa, which recommenced during Q1 2020, and the expansion of known mineralization at the Evolución Project, where the company intends to generate a mineral resource estimate and associated technical report. Additionally, field work has commenced on the Evolución concession on targets generated from remote sensing and regional compilation work.

At Silver City in Germany, the Company has identified several high-priority drill targets based on compilation of historical data, mapping, geochemistry surveys, fluid inclusion studies and geophysical surveys. An initial 1,500 – 2,000 metre drill program is planned with permitting in progress.