Excelsior gains US$75m to get Gunnison underway
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Finance had been the final hurdle for the shovel-ready Gunnison in-situ recovery copper project in Arizona after the company overcame a permitting challenge earlier this month.
Excelsior president and CEO Stephen Twyerould said construction would start this year and he looked forward to bringing Gunnison online in 2019.
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The financing package, expected to close this month, comprises an upfront deposit of $65 million for a copper stream and a $10 million placement at about C95c per share.
The equity placement could increase to about US$20 million if affiliates of Greenstone Resources exercise their pre-emptive right over the issuance of common shares.
Twyerould said even with the stream, Gunnison would be one of the lowest cost pure copper producers in the US and one of the lowest capex per pound copper projects in the industry.
"At full production of 125 million pounds per annum, and using the same US$2.75 copper price from our feasibility study, the stream would add just an additional 7 cents per pound to our industry-leading all-in-sustaining operating costs of $1.23/lb," he said.
The 2016 feasibility study had put initial capex at $46.9 million for stage one's 25Mlb a year operation, $117 million for stage two to increase production to 75Mlb, and about $147 million for a third stage to take production to 125Mlb annually from years 7-20 with a decline towards the end of the 24-year mine life.
Under the deal, Triple Flag will have the option to increase its stream participation by paying an additional $65 million towards the stage two expansion.
Excelsior has the option to reduce the stream by 50% through a buy-down payment.
It will also issue Triple Flag 3.5 million five-year common share purchase warrants at a strike price of $1.50/share.
"Excelsior's pathway to achieving producer status is now clear, and we look forward to bringing the USA's next new strategic metal producer online in 2019," Twyerould said.
Excelsior's share price rose back above the C$1 mark yesterday, up 11.83% to $1.04, to capitalise it at $216 million.
Its shares have ranged from 82c-$1.50 over the past year.