Worth a FlyerI originally bought into Excelsior back in 2012, but ended up selling a few years later for a miniscule profit just before it began its big move to $1.50. Bought again at $0.70 last spring and sold at $1.10, and have been watching the drama play out ever since.
Took a small position again today at $0.57, as I'm looking for some copper exposure that hasn't already run high on the inflation trade.
It ALL depends if management can figure out the flows, but IF they can reach nameplate production of 25 million pounds by next spring, this will be a cash cow even at that level.
25 million x $3.50/lb USD = $105 million in cash flow vs. ~$180 million CDN market cap (310 million shares by my count, exclusing $1.25 warrants from most recent financing).
Even if per pound costs increase to $2.00 USD, profit would likely be in the $45 million CDN range.
That is ~$0.15 per share profit which translates into $1.50/share at 10x price/earnings.
What we don't know:
1) Management may not figure things out, and won't hit the 25 million nameplate capacity.
2) However, copper prices are currently trading at $4.15 USD ($5.00 CDN) and if inflation continues higher as some are currently expecting, that could go higher still.
At these levels, risk-reward seems skewed to the upside. No guarantees, though.