Excelsior Mining Secures US$75 Million Project Financing Package
26427809.2
NEWS RELEASE
Excelsior Mining Secures US$75 Million Project Financing Package
October 31, 2018
Excelsior Mining Corp. (TSX: MIN) (FSE: 3XS) (OTCQX: EXMGF) ("E xcelsior" or the “Company”)
is pleased to announce that the Company has entered into an agr eement for a US$75 million project
financing package. This comprehensive funding plan will enable Excelsior to transition the fully-permitted
Gunnison Copper Project in southeastern Arizona into America’s next new copper producer.
Stephen Twyerould, the President & CEO, commented, “In today’s challenging mining market, only
quality projects are able to secure funding. This financing del ivers superior long-term economics for
shareholders and allows us to quickly move into construction this year. Excelsior’s pathway to achieving
producer status is now clear, and we look forward to bringing the USA’s next new strategic metal producer
online in 2019.”
Shaun Usmar, CEO of Triple Flag Mining Finance Ltd., commented, “Triple Flag is excited to partner with
Excelsior to finance the Gunnison Copper Project. Our flexible and innovative financing will allow the
Gunnison Copper Project to quickly proceed to construction and production over the next year, delivering
a new, low-cost source of American copper. We congratulate the Excelsior team for its impressive
progress in advancing this project to fully funded status.”
Financing Package Highlights
The US$75 million project financing package (collectively, the "Financing") will be provided by Triple
Flag Mining Finance Bermuda Ltd. ("Triple Flag"), and consists of a US$65 million copper metal stream
(the “Stream”) and a concurrent US$10 million private placement of common s hares of Excelsior (the
“Equity Placement ”). The closing of these funding commitments is subject to vari ous conditions,
including the approval of the Toronto Stock Exchange. The Finan cing is expected to close during
November 2018 (the “Closing Date”).
Benefits for Excelsior
The Financing provides Excelsior with a comprehensive project funding solution that would cover
all capital expenditures and working capital requirements relat ed to the start-up of the Gunnison
Copper Project.
The Stream is not subject to interest payments and is unsecure d, thereby allowing for future
project debt financing to expand the project production capacit y up to the targeted 125 million
pounds per year.
The Stream provides an option for Triple Flag to provide an ad ditional US$65 million in funding
for the second stage expansion of the Gunnison Copper Project, while also preserving the right
of Excelsior to buy-down 50% of the Stream.
The Equity Placement provides further alignment between Excels ior and Triple Flag, with Triple
Flag acting as a true project partner.
26427809.2
2
This transaction allows Excelsior to complete the construction without incurring project debt
financing or the issuance of a large number of shares in a poor equity market.
Details of the Financing
Upfront Deposit
Excelsior and its subsidiaries, Excelsior Mining Arizona, Inc. (“Excelsior Arizona”) and Excelsior Mining
JCM, Inc. (“JCM”), have entered into a metals purchase and sale agreement (the "Stream Agreement")
with Triple Flag, whereby Triple Flag has committed to fund a d eposit of US$65 million (the " Stage 1
Upfront Deposit") against the future sale and delivery by Excelsior Arizona of a percentage of the refined
copper production from the Gunnison Copper Project. Excelsior will sell to Triple Flag this percentage of
refined copper at a price equal to 25% of the copper spot price . The exact percentages of copper
production to be sold to Triple Flag varies as per the total pr oduction capacity. These percentages are
detailed in the table below.
Stage 1
(25 M lbs/yr)
Stage 2
(75 M lbs/yr)
Stage 3
(125 M lbs/yr)
Stage 1 Upfront Deposit 16.5% 5.75% 3.5%
“At full production of 125 million pounds per annum, and using the same US$2.75 copper price from our
Feasibility Study, the Stream would add just an additional 7 ce nts per pound to our industry-leading all-
in-sustaining operating costs of US$1.23 per pound,” added Step hen Twyerould. “With this Stream, the
Gunnison Copper Project would still be one of the lowest cost pure copper producers in the United States,
and one of the lowest capex per pound copper projects in the industry.”
In consideration of the Stream, Excelsior shall also issue to T riple Flag 3.5 million five-year common
share purchase warrants, whose five-year term shall begin on th e Closing Date, entitling Triple Flag to
purchase 3.5 million Excelsior common shares at a strike price of C$1.50 per share issued.
Triple Flag Expansion Option and Excelsior Buy-Down Right
Subsequent to notice from Excelsior that the Company will be ex panding production capacity to an
amount equal to or greater than 50 million pounds per annum, Triple Flag will have the option to increase
its stream participation by paying an additional US$65 million (the “Expansion Upfront Deposit”).
Excelsior also retains the option to reduce the amount of the S tream by 50% by making a buy-down
payment to Triple Flag (the “Buy-Down Payment”). The amount of the Buy-Down Payment depends on
whether Triple Flag has exercised its option to provide the Exp ansion Upfront Deposit. The Buy-Down
Payment is calculated as an amount that provides Triple Flag wi th an internal rate of return of 15% on
50% of the Stage 1 Upfront Deposit and, if applicable, 15% on 50% of the Expansion Upfront Deposit (in
each case after taking into account the value of Stream deliveries (net of the 25% purchase price payment
for such deliveries) made to Triple Flag prior to its payment).
The table below shows the percentage of production to be acquir ed by Triple Flag based on scenarios
that include Triple Flag’s Expansion Option and Excelsior’s Buy-Down Right.
Stage 1
(25 M lbs/yr)
Stage 2
(75 M lbs/yr)
Stage 3
(125 M lbs/yr)
Stage 1 Upfront Deposit + Expansion Option 16.5% 11.0% 6.6%
26427809.2
3
Stage 1 Upfront Deposit + Expansion Option + Buy-
Down Right
16.5% 5.5% 3.3%
Stage 1 Upfront Deposit + Buy-Down Right 16.5% 2.875% 1.75%
Equity Placement
In conjunction with the Stream, Excelsior will complete the Equity Placement to raise proceeds of US$10
million (net of applicable fees and expenses). The Equity Placement will consist of the issuance to Triple
Flag of an aggregate of 13,818,977 Excelsior common shares at a n aggregate subscription price of US
$10 million, or equal to approximately Cdn$0.95 per share at current exchange rates. In addition, affiliates
of Greenstone Resources L.P. retain a pre-emptive right over th e issuance of common shares of the
Company. The overall size of the Equity Placement may be increa sed up to US$20 million dependent
upon Greenstone’s decision to exercise its pre-emptive right and in what proportion.
Advisors
Blake, Cassels & Graydon LLP acted as legal counsel to the Company. Torys LLP acted as legal counsel
to Triple Flag. Clarksons Platou Securities AS and BMO Capital Markets acted as financial advisors to
the Company.
About Triple Flag
Triple Flag Mining Finance Bermuda Ltd. and Triple Flag Mining Finance Ltd. together constitute Triple
Flag Mining. Triple Flag Mining primarily targets streaming and royalty investments in the mining sector
with backing by Elliott Management Corporation, an experienced global investment firm with more than
$35 billion of assets under management. Triple Flag Mining’s fo cus is on being a leading sought-after
long-term funding partner to mining companies throughout the co mmodity cycle. In less than 2 years,
Triple Flag has committed over US$800 million to the mining sec tor, with a primary focus on precious
metal streaming and royalty investments. For more information, visit http://www.tripleflagmining.com.
About Excelsior Mining
Excelsior “The Copper Solution Company ” is a mineral exploration and development company that is
advancing the Gunnison Copper Project in Cochise County, Arizon a. The project is a fully-permitted,
advanced staged, low cost, environmentally friendly in-situ rec overy copper extraction project. The
Feasibility Study projected an after-tax NPV of US$ 807 million and an IRR of 40% using a US$ 2.75 per
pound copper price and a 7.5% discount rate.
Excelsior’s technical work on the Gunnison Copper Project is supervised by Stephen Twyerould, Fellow
of AUSIMM, President & CEO of Excelsior and a Qualified Person as defined by National Instrument 43-
101. Mr. Twyerould has reviewed and approved the technical information contained in this news release.
Additional information about the Gunnison Copper Project can be found in the technical report filed on
SEDAR at www.sedar.com entitled: “Gunnison Copper Project, NI 4 3-101 Technical Report, Feasibility
Study” dated effective December 17, 2016.
26427809.2
4
For more information on Excelsior, please visit our website at www.excelsiormining.com.
ON BEHALF OF THE EXCELSIOR BOARD
"Stephen Twyerould"
President & CEO
For further information regarding this press release, please contact:
Excelsior Mining Corp.
Concord Place, Suite 300, 2999 North 44th Street, Phoenix, AZ, 85018.
JJ Jennex, Vice President, Corporate Affairs
T: 604 723 1433
www.excelsiormining.com
Cautionary Note Regarding Forward-Looking Information
This news release contains "forward-looking information" concerning anticipated developments and events that may
occur in the future. Forward looking information contained in this news release includes, but is not limited to,
statements with respect to: (i) the closing the Financing, (ii) whether, and the extent which, Triple Flag will increase
its stream and provide Excelsior additional funding (iii) Greenstone’s participation in the Equity Placement, (iv) the
results of the Feasibility Study, including operating and c apital cost estimates and the economic benefits from the
Gunnison Copper Project; (v) the timeline for commencement of construction and commercial production from the
Gunnison Copper Project; and (vi) the ability to mine the Gunnison Copper Project using in-situ recovery mining
techniques.
In certain cases, forward-looking information can be identif ied by the use of words such as "plans", "expects" or
"does not expect", "is expected", "budget ", "scheduled", "estimates", "forecasts ", "intends", "anticipates" or "does
not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results
"may", "could", "would", "might" or "w ill be taken", "occur" or "be achieved" suggesting future outcomes, or other
expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance.
Forward-looking information contained in this news release is based on certain factors and assumptions regarding,
among other things, the estimation of mineral resources and mineral reserves, the real ization of resource and
reserve estimates, copper and other metal prices, the timing and amount of future development expenditures, the
estimation of initial and sustaining capital requirements, the estimation of labour and operating costs, the availability
of necessary financing and materials to continue to develop and construct the Gunnison Copper Project in the short
and long-term, the progress of development activities, the receipt of necessary regulatory approvals, the estimation
of insurance coverage, and assumptions with respect to currency fluctuations, environmental risks, title disputes or
claims, and other similar matters. While the Company considers these assumptions to be reasonable based on
information currently available to it, they may prove to be incorrect.
Forward looking information involves known and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of the Company to be materially different from any future results,
performance or achievements expressed or implied by the forward-looking information. Such factors include risks
inherent in the exploration and development of mineral de posits, including risks relating to changes in project
parameters as plans continue to be redefined including the possibility that mining operations may not commence at
the Gunnison Copper Project, risks relating to variations in mineral resources and reserves, grade or recovery rates
resulting from current exploration and development activiti es, risks relating to the abilit y to access infrastructure,
risks relating to changes in copper and other commodity prices and the worldwide demand for and supply of copper
and related products, risks related to increased competit ion in the market for copper and related products and in
the mining industry generally, risks related to current global financial conditions, uncertainties inherent in the
26427809.2
5
estimation of mineral resources, acce ss and supply risks, reliance on key pers onnel, operational risks inherent in
the conduct of mining activities, including the risk of acci dents, labour disputes, increases in capital and operating
costs and the risk of delays or increased costs t hat might be encountered during the development process,
regulatory risks, financing, capitalization and liquidity risks, including the risk that the financing necessary to fund
the exploration and development activities at the Gunnis on Copper Project may not be available on satisfactory
terms, or at all, risks related to disputes concerning property titles and interest, environmental risks and the
additional risks identified in the “Risk Factors” section of the Company’s reports and filings with applicable Canadian
securities regulators.
Although the Company has attempted to identify important factors that could cause actual actions, events or results
to differ materially from those described in forward-lo oking information, there may be other factors that cause
actions, events or results not to be as anticipated, esti mated or intended. Accordingl y, readers should not place
undue reliance on forward-looking information. The forward-looking information is made as of the date of this news
release. Except as required by applicable securities laws, the Company does not undertake any obligation to
publicly update or revise any forward-looking information.