Updated Excellon Valuation DDUpdated Excellon Valuation DD
Metal prices and the silver benchmark valuation (highlighted in red below) have gone up a fair amount since I first posted this Excellon Valuation DD.
I thought I would run the numbers using current prices to see what the results were.
For reference, my original 7/8/2009 Excellon Valuation DD post can be found here:
https://www.stockhouse.com/Bullboards/MessageDetail.aspx?p=0&m=27272227&l=0&r=0&s=EXN&t=LIST
From 2009-6-16 Excellon News Release
https://www.stockwatch.com/newsit/newsit_newsit.aspx?bid=Z-C:EXN-1616585&symbol=EXN&news_region=C
“Exploration diamond drilling will resume at the Platosa property, with two rigs in early July. One rig will continue exploration of the NE-1 Manto, where hole EX08LP-614, one of the last drilled before the suspension of drilling in late October, intersected 1,064 grams per tonne (g/t) silver, 14.6 per cent lead and 6.2 per cent zinc over an estimated true thickness of 7.6 metres. The second drill will test geological and geophysical targets in the general vicinity of the Platosa mine. The company's geologists believe these targets may represent sulphides in underexplored portions of the favourable fragmental limestone unit, which hosts the high-grade mantos now being exploited.”
From 2009-6-15 Excellon 2009 1st Quarter MD & A
https://www.stockwatch.com/nocomp/newsit/newsit_sedardoc.aspx?docid=1903549
p.10
“The Platosa mine exploits a series of typical, although very high-grade, distal CRD silver, lead, zinc manto deposits located strategically within the prolific Mexican CRD Belt. It is the Company’s belief and diamond drilling results during 2008 continued to confirm, that the Platosa Property holds considerable potential for the discovery of additional high-grade manto mineralization and for the discovery of large-tonnage, though lower grade, proximal CRD mineralization.
Several features make CRDs highly desirable mining targets. These include, [a] Size – Proximal CRDs average 10 to 15 million tonnes of ore and the largest range up to 50 million tonnes; [b] Grade – Ores are typically polymetallic with metal contents ranging from 2-12% lead; 2-18% zinc, 60-600 g/t silver, up to 2% copper and 6 g/t gold; and [c] Deposit morphology – Individual CRD orebodies within the overall deposit are continuous and average 0.5 to 2 million tonnes in size, with some up to 20 million tonnes. They are typically metallurgically straight forward, amenable to low-cost underground mining methods and given that they are limestone-hosted, the environmental impact of tailings disposal is generally minimal.”
In order to get some idea of what a 10 to 15 million tonnes of ore average sized CRD (Carbonate Replacement Deposit) with a typical grade of 2-12% lead; 2-18% zinc, 60-600 g/t silver, up to 2% copper and 6 g/t gold might be worth, I did the following calculation:
From the Resource Stock Guide website which values silver producers & silver exploration companies based on their market value per oz of silver:
https://www.resourcestockguide.com/comparison_table_page.php?p=4|4|4|0|0|33|0
Silver Benchmark= US$1.60 per oz of silver in the ground
Using current market prices of metals (see www.kitcometals.com)
Silver= US$14.20 per oz
Lead= US$0.92 per lb
Zinc= US$0.81 per lb
Copper= US$2.85 per lb
According to Stockwatch there are approx 257,000,000 shares of EXN currently issued
https://www.stockwatch.com/utilit/utilit_snapsh_fundam.aspx?symbol=EXN®ion=C
According to p.26 of 2009-6-15 Excellon 2009 1st Quarter MD & A there are approx 6,000,000 warrants & 10,800,000 incentive stock options
https://www.stockwatch.com/nocomp/newsit/newsit_sedardoc.aspx?docid=1903549
So fully diluted number of shares of EXN is approx 274,000,000
1. 10 million tonne deposit with average (ie midpoint) “typical” grade
- 7 % Lead
- 10 % Zinc
- 330 g/t Silver
- 1 % Copper
- Assume payable gold is negligible
Gross rock value per tonne
- Lead= 0.07*2204*US$0.92=US$142
- Zinc= 0.1*2204*US$0.81=US$179
- Silver= 330/31.1*US$14.20=US$151
- Copper= 0.01*2204*US$2.85= US$63
- Total= US$534 per tonne
- Converting this to oz equivalent of silver get a grade of 1169 g/t (ie 1169 / 31.1*US14.20=US$534)
Using Resource Stock Guide Silver Benchmark= US$1.60 per oz of silver in the ground get
- 10,000,000 * 1092/31.1 * US$1.60=US$456,000,000 / 274,000,000 share = US$2.20/ share * 1.10= C$2.42 /share
2. 10,000,000 tonne deposit with high end grade
- 12 % Lead
- 18 % Zinc
- 600 g/t Silver
- 2 % Copper
- Assume payable gold is negligible
Same calculation as above with these grades results in C$4.36/share
3. 15,000,000 tonne deposit with average “typical” grade
- 7 % Lead
- 10 % Zinc
- 330 g/t Silver
- 1 % Copper
- Assume payable gold is negligible
Same calculation as above with these grades results in C$3.62/share
4. 15,000,000 tonne deposit with high end grade
- 12 % Lead
- 18 % Zinc
- 600 g/t Silver
- 2 % Copper
- Assume payable gold is negligible
Same calculation as above with these grades results in C$6.54/share
5. 50,000,000 tonne deposit with average “typical” grade
- 7 % Lead
- 10 % Zinc
- 330 g/t Silver
- 1 % Copper
- Assume payable gold is negligible
Same calculation as above with these grades results in C$12.08/share
6. 40,000,000 tonne nearby CRD deposit
According to a presentation on the Excellon website their property is right in the middle of highly prospective CRD belt
https://www.excellonresources.com/pdf/Corp%20Presentation%20April%202009.pdf
In looking for more info on the nearby Conception del Oro CRD deposit, I came across this reference:
https://www.almadenminerals.com/News%20Releases/2005/apr28-05.html
“The most notable of which is the nearby Conception del Oro mining district which is thought to have produced in excess of 40 Mt reportedly grading 12.8% Zn, 5.8% Pb, 275 g/t Ag, up to 1.5 g/t Au and up to 1.5% Cu”
Running the numbers with these grades and 40,000,000 tonnes get C$10.24/share
Could these possible valuations be the reason that Excellon insiders have been buying EXN stock in the market even after exercising their rights?
https://www.canadianinsider.com/coReport/allTransactions.php?ticker=exn