Explor Resources Inc New EXSFF

RE:RE:RE:Where We Are on TPW and Ogden

[PhillyJack]

1. It would be just about impossible for CD to develop the property on his own with a $15-20 million company.  Building a mine near Timmins with 20-30 million ounces of deeply buried gold will cost at least $500 million.  This project does not come together without a major mining company on board.  EXS does not have the skill set and resources to develop such a mine.  This is an exploration company.  Banks are in the lending business, not the mining business.  No financial institution would back a $500 million+ project with only a small junior behind it.

2. All of EXS's other properties are exploration properties.  There is nothing to develop yet.  Whether TPW is going to be developed is still open to question, largely depending on what Teck has found with its first three drill holes at TPW.  They can either walk away, decide to do further drilling, or make a bid to buy out the remaining 30% of TPW.  If Teck does bring in a partner it will be someone such as Tahoe or Goldcorp.  It will not be EXS.  EXS will use the buyout to reward shareholders and do fiurther exploration work at Kidd, Ogden, Eastford Lake, and other properties.  At the point EXS drills into something exceptional on another property, they will look to JV with another major or Teck.  This is their business model.  Find something promising, spend the major's money to confirm an economic deposit, and sell the property to the major.  Look at Probe's recent sale of its Borden Gold project to Goldcorp as an example.  Shareholders got $5 per share on what had been a penny stock.

3.If Teck pulls out it will be because they do not think the project makes financial sense and/or cannot come to terms with EXS.  The biggest reason for a Teck pullout would be that their drilling fails to confirm the HMC model, and they do not believe there is enough high-grade gold at depth to construct a mine.  Under such a scenario CD would have to pitch this to another major and convince them that Teck was wrong and backed out too early . . . a tough task.  Arizona Star was able to do this when Placer Dome backed out of a JV with AZS, and then years later got a buyout from Barrick for their Cerro Casale project in Chile.  AZS got hundreds of millions but the property is still undeveloped by Barrick.  That was a low grade mine.  If the HMC model on TPW is confirmed, it will be a large high-grade mine (which is what everyone wants) and will surely be developed considering the excellent infrastructure in Timmins.

The things that point to a buyout of TPW are:

A.  The recent institution of the EXS shareholder rights plan.
B.  CD's recent interview at PDAC where he stated he believes TPW to be worth a $billion (CD said EXS's 30% pf TPW should be valued at $300 million).
C. The Tahoe move to merge with LSG on the same day preliminary results from the 44 Gap Project were released.
D.  Teck and Goldcorp officials visiting EXS at PDAC.
E.  Teck holding onto the TPW drill results until after the LSG-Tahoe deal goes through.
F.  CD's decision coming out of PDAC to commence immediate drilling at Ogden next door to TPW.
G. Good results at the adjoing Metals Creek property (50% Goldcorp) to the east where they are doing stepout holes in the direction of the border with TPW.

It all points to EXS being in play as Timmins West becomes a very hot district.  Tahoe grabbing LSG to the west, MEK getting good results to the east and doing stepout drilling towards TPW, and CD putting Ogden ahead of Kidd Creek.

Something is brewing, and you can bet lots of things are happening behind the scene as we wait for THO-LSG to close.