Analysis - Copper

 

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.

Executive summary

  • 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.

Executive summary

  • 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.

Executive summary:

  • 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, a large and very high grade copper/gold discovery in Serbia. A small part of it sports an already impressive NI43-101 Inferred resource of 3.7B lb copper @2.6% Cu, and 3.16M oz gold @1.5g/t Au, which contains a very high grade core of 1.1B lb copper @11.2% Cu and 1.1M oz gold @7.4g/t Au near surface
  • Existing drill results indicate a much bigger, deep porphyry deposit around the existing mineralized zone
  • Both Reservoir Minerals and giant copper producer Freeport McMoran concluded the JV in order to take the project to scoping study level
  • Freeport has a 55% JV interest, and is spending a $18.7M exploration budget for 2015 which is a big vote of confidence
  • 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