Preliminary results from metallurgical test work at Excelsior Mining's (TSXV:MIN) Gunnison project in Arizona show that copper can be recovered rapidly and uniformly from fractured rock samples from the property. However, what's perhaps more important is that copper recoveries and acid consumption for the leaching process are consistent with results from the company's 2014 prefeasibility study (PFS). Excelsior CEO Stephen Twyerould is pleased with the results, and said that the consistency with the PFS will help increase confidence in the project for both the company and the market. "That [also] means that when we do the feasibility study, some of the key components, the economic drivers, are well understood," he said. The company conducted 10 fracture simulation leach tests on samples representing a variety of different structures and rock types at the project. Twyerould explained that the aim of the fracture simulation tests was to "recreate" underground fractured surfaces using drill cores that have intersected fractures at the property. Interestingly, he noted that Excelsior's process at Gunnison won't actually permeate rock. Instead, it will leach oxidized copper from existing fractures underground. "If there's a fracture already existing underground, then our solution just moves along that fracture. It doesn't permeate through the rock," he said. "When [our weak acid] solution moves along those fractured surfaces, it dissolves the oxide copper ... and then we pump it up to the surface." From there, solvent extraction and electrowinning will be used to produce copper cathode at the project. Project de-risking Joseph Gallucci of Dundee Capital Markets has also expressed positivity about Wednesday's news, stating in a note to clients that Excelsior's initial test results "show great promise." "We believe that these test results are very positive for MIN as they begin to remove some of the technical risk associated with a less common mining method," the note reads. "We maintain our thesis on MIN and believe that with this technical de-risking, MIN is poised to become a producing company or the next copper ISR takeover target."
Gallucci also points out in the report that Gunnison is the largest-known potential ISR project in the world, adding that Dundee believes that the project "ticks many of the same boxes" as Taseko Mines' (TSX: TKO,NYSEMKT:TGB) Florence copper project. Taseko acquired Florence via its takeover of Curis Resources last year, and based on the value of that transaction (~$79 million), the firm believes that Excelsior has an implied takeover valuation of $0.95 per share.Overall, Gallucci has assigned the company a "buy" rating with a takeover target of C$0.90 per share. While he notes that Gunnison is still an early stage project that "uses a less common mining method for copper," he also states that Dundee "would recommend the stock to investors willing to assume technical risk and a degree of permitting risk." Twyerould said that he doesn't expect permitting to be an issue for the project. Certainly, investors will continue to watch for further announcements regarding the project this year. Results from Excelsior's hydrological program are due in July. At close of day on Wednesday, Excelsior's share price was up 9.62 percent, trading at $0.285. Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article. Related reading: Stephen Twyerould on Excelsior Mining's In-situ Recovery Copper Project What are In-situ Recovery Copper Projects? Excelsior Secures 100-percent Ownership of Gunnison Copper Project Excelsior Mining Reports Positive Preliminary Metallurgical Test Results from Copper Investing News