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Thursday, May 11, 2017 Derek Macpherson

EXN's Costs Increase as Optimization Nears Completion

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Excellon Resources Inc. (TSX:EXN) reported weak Q1 2017 financials, as the company entered a period of increased spending supporting the ongoing optimization at its Platosa mine in Durango, Mexico. Due to challenging mining conditions and focus on optimization, production costs increased significantly QoQ by 11.19% (23.13% YoY). The optimization plan is 90% completed and water levels are lowering at a faster rate than initially forecasted. We expect to see a stronger H2 2017 as cash flow and profitability should improve materially. Excellon currently trades at a premium to peers at 1.22x NAV and 6.3x 2017e EV/CF versus peers at 0.87x NAV and 6.0x 2017e EV/CF. We believe this premium only partially reflects the increased production and lower costs expected once the optimization program is completed at Platosa.  read more


Thursday, April 27, 2017 Derek Macpherson

EXN's Optimization Plan On-Track

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Excellon Resources Inc. (TSX:EXN) reported Q1 2017 production results and an update on its ongoing optimization program at its Platosa Mine in Durango, Mexico. The optimization plan remains on schedule for the end of Q2. The company saw higher than forecasted drawdown and expects full installation to be completed during May. Production results decreased significantly YoY and QoQ, as the company faced challenging mining conditions in the Rodilla Manto during Q1. Operations and cash flow are expected to improve in H2 2017, once the optimization program has been completed. Excellon currently trades at a premium to peers, we believe this premium partially reflects the expected increase in production and lower costs once the optimization program is completed. read more


Thursday, March 23, 2017 Derek Macpherson

EXN's Optimization Program Nearing Completion

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Excellon Resources Inc. (TSX:EXN) reported financial results for Q4 2016 and 12-months ended 2016 including an update on its ongoing optimization program at its Platosa Mine in Durango, Mexico. Costs for Q4 were much higher than the expected run-rate; however, this incorporates costs of the ongoing optimization program. The company anticipates operations to achieve higher rates of production and lower costs during H2 2017, when the optimization program is complete. While Excellon currently trades at a premium to peers; we believe this reflects the market's anticipation for improved production and costs later this year.  read more


Sunday, February 26, 2017 Derek Macpherson

RCKS Pre-PDAC Mining Showcase Presenter Preview

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On Friday March 3th, 2017, Red Cloud Klondike Strike Inc. will be hosting its 5th Annual Pre-PDAC Mining Showcase. The event features presentations from 21 companies, including a themed lunch presentation by leading corporations in the gold mining sector. Visit the event page for more details on the day’s schedule. In this post, we provide a brief preview on the 21 presenting companies and 13 banner sponsors that will also be in attendance.  read more


Wednesday, February 08, 2017 Derek Macpherson

EXN Materially Reduces TC/RCs

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Yesterday, Excellon Resources Inc. (TSX:EXN) announced it had entered into new off-take purchase agreements for 2017 lead-silver and zinc concentrate production, likely representing a ~60% reduction in treatment and refining charges (TC/RCs). We expect this to positively benefit Excellon’s profitability since TC/RCs for the first nine months of 2016 were US$2.7 million or ~17% of gross sales. If we were to apply this discount to the first nine months of 2016, revenue would have increased ~12%, adjusted net income would go from being a loss to slightly positive and operating cash flow would be about breakeven, versus a meaningful loss. Coupled with the completion of the company’s optimization program which is slated for Q1 2017, we expect cash flow and profitability to improve materially in H2 2017. Excellon currently trades at a premium to peers at 1.67x NAV and 14.0x 2017e EV/CF versus peers at 1.10x NAV and 9.2x 2017e EV/CF. We believe this premium partially reflects the increased production and lower costs expected once the optimization program is completed at La Platosa. read more


Thursday, February 02, 2017 Derek Macpherson

EXN Discovers New Zones Above the Water Table

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Excellon Resources Inc. (TSX:EXN) announced additional results from its ongoing 25 km drill program at its La Platosa mine in Mexico. To date 35 holes totalling 5.4km have been completed and the program is focused on expanding and better defining the existing resource, along with testing new near-infrastructure areas above the water table. Today’s results were highlighted by the discovery of three new mineralized zones above the water table, which are likely to benefit operations in the near-term. As well, hole EX16LP1107 intersected 795 g/t Ag, 25.85% Zn and 9.25% Pb over 3.0m and appears to have expanded the Pierna Manto to the North and the Rodilla Manto to the South. Excellon currently trades at a premium to peers on a NAVPS and 2017e EV/CF basis which likely reflects the expected cost and production improvements from the ongoing optimization program. read more


Tuesday, January 31, 2017 Derek Macpherson

EXN Ops Continue Transition with Ongoing Optimization

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Excellon Resources Inc. (TSX:EXN) reported Q4 and 2016 production results and provided an update on the ongoing optimization program at its La Platosa mine in Durango, Mexico. Production in Q4 2016 increased by 4% QoQ and 3% YoY on an AgEq basis when adjusting for metal price differences. Operations continue to be impacted by water management challenges, limiting development into higher grade areas; however, the company continues to progress its optimization program which is expected to be completed in Q1 2017, resulting in dry mining conditions in Q2 2017. The completion of the optimization program is the key step to accelerate development and increase production while reducing costs at La Platosa. read more


Thursday, November 03, 2016 Derek Macpherson

EXN’s Weak Q3 Not Reflective of Medium Term Potential

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Excellon Resources Inc. (TSX:EXN) reported its Q3 2016 financials which reflected the weak operating results and ongoing water optimization program at its La Platosa Mine in Mexico. As a result of the quarter’s reduced production levels, cash costs increased by 83% QoQ and 55% YoY to US$17.95oz Ag. All-in sustaining costs (AISC) also increased significantly by 112% QoQ and 159% YoY to US$33.92/oz. While these results reflect the company’s weak operating results from Q3, in our view we do not consider them to be reflective of the company’s medium term potential. Once the ongoing water optimization program is complete, the company anticipates production to double and costs to decrease by 50%. In our view both operations and financial results are likely to improve in the new year as the optimization program lowers the water level in the mine.  read more


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