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Excalibur Resources Ltd (2)
Symbol XBR
Shares Issued 70,521,500
Close 2015-05-22 C$ 0.015
Market Cap C$ 1,057,823
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Excalibur Resources to acquire toll mill in Peru

2015-05-25 09:08 ET - News Release

Mr. Tim Gallagher reports

EXCALIBUR PERU UPDATE

Excalibur Resources Ltd. has provided an update on its Peru activities. In June, 2014, the company signed a letter of intent with Carbocol Peru SAC to acquire 100 per cent of San Pedro I, a 900-hectare gold-copper concession held in the state of Piura in northern Peru, close to the border of Ecuador, for one million shares of Excalibur. In October, 2014, an adjacent 900-hectare mineral concession called San Pedro II was acquired from the Peru government. The company needs to incorporate a Peru subsidiary to close these transactions.

San Pedro I operations/enhancing ore trading model

German Castano, a director of Excalibur and president of Carbocol Inc., has been working with the local informal miners on San Pedro I for over a year, sending periodic batches of production to one of two local toll mill plants; however, in the fall of 2014, the Peru government closed one of the plants such that the remaining plant increased its minimum tonnage requirement and started paying less per ton. Also, without a flotation circuit, it does not process sulphide ore. So in December, 30 tons of ore were sent via truck to Lima in order to generate a better price, and also to develop relationships with the international metal trading community, resulting in a sale of $19,410 (U.S.) in January. Unfortunately, mining has been stopped for the last three months due to a very unusual and extended rainy season, and only recently was dry enough to resume operations. In future, to avoid the dependence on production solely from San Pedro, the company is now also seeking new sources of gold and copper ore with similar gross margins of $200 to $300 per ton. In order to attract and assess new sources of supply, the company is looking into buying a 10-ton-per-hour dry mill to crush ore to sand size that is high enough grade to be shipped directly to China without further local processing. This toll mill would charge the local miners roughly $30 (U.S.) per ton, and operate with similar margins generating up to $3,000 (U.S.) per day as a complement to the ore trading business model. This will require an investment in equipment of approximately $50,000 (U.S.), and take about three months to set up and permit. Strategically, Excalibur will have the option to choose which ore to buy, receive it as a deposit and/or blend it with other sources in order to maximize the profit margin, and increase the frequency of these ore trades.

"The state of Piura in northern Peru is a relatively unknown mining area with many informal miners producing high-grade material. We have faced various challenges in increasing production at San Pedro, so we are looking to also buy ore from other informal miners, and eventually offer a toll mill service in order to increase potential cash flow," commented Tim Gallagher, chairman and chief executive officer of Excalibur.

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