Please Note - MIN is my largest personal holding. The share price is nearing the end of an Apex formation, suggesting its about to make a significant move up or down (point A). The MACD (point B) has just turned bullish giving me cause to think the move shall be up.

Management has been relatively quiet but I believe that’s about to change. I asked MIN’s CEO some key questions this week and his responses are below. I urge “all” speculators/gamblers to take a serious look at MIN ASAP!

Q & A with Stephen Twyerould, President and CEO of Excelsior Mining

Q – What is your 30-seond elevator pitch for Excelsior?

“Excelsior Mining has a large multi-billion pound copper deposit in Arizona that is scheduled for full production in 2015 via the in-situ recovery mining method. This method does not involve digging the copper out of the ground but rather we are going to pump the copper to the surface using bore holes; and because we are going to use this mining method, we fully expect that our operating cost, our capital costs and our environmental footprint will be as good or better than any other conventional copper mine.” This story is all about superior economics – we are projecting operating costs of less than 70 cents per pound and there are few, if any, copper mines in the world that are able to consistently produce at that level.

Q – If the economics are so great, why has practically no one ever heard of in-situ recovery for copper?

The short answer is that it is very rare to find a copper deposit that has all the characteristics you need in order to be able to mine via in-site recovery; in fact, we have only really seen these deposits in Arizona. A geological anomaly has occurred here that has pushed oxidized copper ore bodies below the water table; normally oxides form at the surface so to locate such a deposit below the water table is rare and fortunate for us.

Q – You’ve been on this project since 2005. What attracted you to it?

At first I was thinking “open pit” so I didn’t like the project in the beginning. It has a highway over a section of the main deposit and a railway runs over a section of our secondary deposit. As an open pit,   I was thinking break-even at around a $2.50 per pound copper price. However, I then started looking at all the historical information surrounding in-situ recovery. Luckily, we have almost  all the core ever drilled on the project – over 200,000 feet. I could clearly see the fractured nature of the core and over a two-year period, I became completely convinced that the deposit could be successfully mined via in-situ recovery. My conclusions have not changed. With every new hydrological and metallurgical drill result that we return, we have yet to see a single test that does not indicate that his is an in-situ recovery project.

Q – Recently the Globe & Mail newspaper ran an article on how the issue of a proposed in-situ copper mine has divided the town of Florence. When you view opposition at projects such as Florence and Rosemont, does this concern you?

This type of thing is always a concern; however, our project is quite different than the others you mentioned. One of the key advantages that we have at our project is that it is situated in a very remote location. No one lives within several miles of the project which greatly reduces any community issues. No one is using the project area to acquire water for drinking or for agriculture. It’s an ideal location for mining and this is proven out by there being an operating open-pit copper mine just over a mile from our site. Almost without exception, the reason that projects are held up during the permitting process is because of community push-back. However, we are in an area of very low population density, in one of the most remote counties in the United States. We are very confident that we will be able to avoid a large scale opposition movement. Having said this, we will still approach our public consultation responsibilities proactively and professionally; we plan to begin our community outreach programs this year.

Q – You have said that this is the greenest, most environmentally friendly mining project that you have ever been involved with. These are not terms normally associated with mining. How is this a “green” mine?

The small environmental footprint is another reason why we do not anticipate significant opposition to our mine. When we have completed the mining of this deposit you will not be able to tell that a mine ever existed on the site. Because we are using injection and recovery wells to extract the copper, there is no permanent scarring of the natural landscape, unlike what happens with open-pit mining. Once mining is completed, the wells are buried and the site can be used for any desired application – including residential development. Furthermore, the remediation of the ground water is even more dramatic. Previous in-situ copper projects have demonstrated that full remediation of the groundwater can be accomplished within 100-days after mining is completed. No other mining method offers this benefit.

Q – So the end result is 100% remediation but what about the impact of the mine during the production phase?

That’s a great question. The in-situ mining method does not involve a lot of the deleterious issues normally associated with mining, such as big holes in the ground, waste dumps, tailings ponds, explosives, and a large mining fleet. All of this will translate into minimizing the things that people do not like about mining – ugly scars in the ground, dust and noise. The Gunnison Copper Project should prove to be a very low impact mine.

Q – So with the confirmation of the “green” mine story, I’d like to go back to the economics. Acid consumption is the Achilles Heel of any oxide copper project. Your deposit is a skarn and generally considered to be a higher acid consumer. What are the projected acid costs?

Both historical and recent metallurgical results indicate average acid consumption to be around 9 pounds of acid for every pound of copper produced. These are good numbers and contribute to Excelsior’s remarkable economic story. One thing that people need to understand is that we are not mining the acid consuming carbonate rocks; we’re going to leave those rocks in the ground. We are only mining the fracture veins, which contain the copper mineralization. Also, it is important for investors to understand that only half of our deposit rests within the higher-acid consuming rock. The lower section of our ore body sits within the Lower Abrigo Formation, which is not a high acid consumer; we intend to mine this section first.

Q – Your Preliminary Economic Study includes the construction an acid plant? Why are you considering this option?

If you are able to produce your own acid on site then you are shielded from any major fluctuations in the sulphuric acid price, and more importantly, your cost of acid is reduced substantially. As you said earlier, acid is the Achilles Heel of any copper project and we anticipate that acid will be responsible for approximately 40% of the overall operating costs, so anything we can do to reduce this cost will have a positive effect on the overall economics. The Gunnison property is blessed with exceptional infrastructure and this includes having the main Union Pacific Railway line running through the property. We will look to bring in sulphur from the west or east coast via this railway line. Another thing that is very interesting is that during the chemical process that converts sulphur into sulphuric acid, a great deal of heat is produced. This heat is used to generate electricity which contributes to the improved economics of producing your own acid. Since we are now talking about alternative energy sources, I should mention that we are also very interested in exploring potential cost savings through the use of solar power. Southern Arizona has one of the best environments in the world for this type of technology and we will be determining the economic case for incorporating things such as solar panels into our mine plan.

Q – The public company is just over one-year old. How was your first year?

We have had a remarkable year of successful field work. As a result of our in-fill drill program, we added over a billion pounds to our resource. Our hydrological and metallurgical results were better than expected. We released a very robust Preliminary Economic Assessment as well as an equally encouraging Economic Impact Study. We have consistently hit our milestones; however, our shareholders are not interested in a technical success; they want a market success. The number one  thing we hear from our shareholders is that we “have hung in there” over the last 12 months despite a general downturn in the market. What this means is that the substantial value we created in the last 12 months is yet to register on the share price.  We believe this will change and the value will be “added back in” as we advance the project this year.

Q – What are your goals for the company in 2012?

We see ourselves as value creators and this will be our focus again this year. Before the end of the year, we plan to complete a pre-feasibility study. To achieve this, the bulk of the work that we will be doing will revolve around hydrology. We need to map out and understand exactly how the ground water is moving because this will ultimately decide our mine plan. We will also do more metallurgical tests and  more infill drilling  to upgrade another large portion of our resource to the measured and indicated categories. We hope to announce the details of this work program shortly.

Q – Who are your largest shareholders? Is anyone covering you at this time?

We currently have coverage from four Canadian brokerage firms – Union, Byron, Mackie and Northern Securities. For a relatively new company, I think that the amount of coverage that we have been able to attract is noteworthy. Needless to say, all of these analysts have 12-month price targets well in excess of where Excelsior  trades today. Our largest shareholder is the Sullivan Family Trust. These are the children of the former owner of the project, Jim Sullivan. As a whole, management has the next largest block of shares at around 17% on a non-diluted basis. Actually, our Chairman, Mark Morabito has been buying in the market as of late and it is always a good sign to see a management group that is completely aligned with the investor.

Q – What is your take on the copper market both long-term and near term.

I am a big believer that we are going to continue to see higher commodity prices across the board and this is especially true for copper. You really cannot do much without copper; it’s the heart of all industrial applications and so there is always going to be demand. However, copper is notoriously cyclical. The beauty of our story is that the economics of our project do not hinge on a high copper spot price. We like to say that if the copper price is high then we are going to make a lot of money; whereas if the copper price is low we are still going to be profitable; we will still be in business when others are not.

Thank you.

A brief comment on the substantial trading volume at Geologix Explorations. Since my initial comments on Geologix on January 17th, the company’s shares are up nearly 40% (from C$0.22 to $0.31) and have traded a staggering 57.0 million shares in 2 weeks, including one particularly active day as the TSX’s most active stock at almost 30.0 million shares in one day.

My comments on Geologix came on the heels of an encouraging news release regarding high-grade expansion drill results, and although it’s not unusual for trading volume to increase after a positive news release, it’s clear that recent developments at the company’s Tepal project in Mexico, and the pending news flow expected in the coming months, have attracted the attention of new investors who recognize the disconnect between the value of the project and the company’s market cap. This renewed investor interest has allowed a large portion of  shares to move from weak hands into stronger longer-term holders who see the bigger potential for the project and the company in the coming months.

A series of pending news items, including drill results, geophysical results, a new resource estimation, and completion of a pre-feasibility study are all expected in the coming weeks and months.

Many readers inquired how such big volume can take place without a perceived bigger move in the share price. First off, a 50% increase in the share price in a little over two weeks is big (it’s just like a $21 stock going to $31). Second, this stock had lots of high volume (note A on chart) and one can assume those folks are using liquidity to get out from a losing position (which is better now than later). Third, there’s now high frequency trading on the TSX and computers trading for half-cents and pennies (like down in the U.S) is now a way of life north of the border. The bigger the activity the more of those traders are attracted to the stock and it feeds on itself. But all in all, this was very good for GIX and is setting up the shares to be able to move higher and faster if and when good news arrives.

Technically, the stock is breaking above key downtrend lines while approaching key moving averages. The second chart shows you a classic saucer bottom that I believe is the foundation for the share price to return to much loftier levels on the heels of lots of news flow in the coming weeks and months. It’s been my opinion that their projects are worth a multiple of what the total market cap has been for several months. I’m not alone on my bullish assessment.