A case for CA$31.80 (undiluted), aka 8,616% upside from CA$0.37 (an 86 bagger!).

Excellon Resources Inc. is a Toronto-based mineral exploration and development company focused on silver and gold projects in Peru, the United States, and Germany.

• As of December 12, 2025, the company has a market capitalization of approximately CA$121.9 million, with 334 million shares outstanding and a share price around CA$0.37.
• Its portfolio includes the flagship Mallay Silver Mine (Peru), the advanced Kilgore Gold Project (Idaho, USA), the early-stage Tres Cerros gold-silver exploration property (Peru), and the recently optioned Silver City silver project (Germany).
• The company is led by CEO Shawn Howarth, who has emphasized rapid value creation through restarts and exploration.
• Key strengths include strategic partnerships (e.g., Glencore for offtake and financing at Mallay) and institutional backing (Sprott holds ~9.5% non-diluted ownership).
• As of Q3 2025, Excellon reported CA$18.2 million in cash equivalents (US$13.5 million) and total liquidity of ~CA$32.4 million, including an undrawn US$7.5 million pre-export facility from Glencore.
• The company is debt-free and positioned for execution, with Q3 exploration and evaluation expenses at CA$2.1 million, focused on Mallay rehabilitation and drilling.

Recent Developments and Project Highlights

Excellon's momentum stems from the May 2025 acquisition and restart plans for the Mallay Silver Mine, a past producer with significant upside in a bull metals market. Key updates from CEO Howarth:

• Mallay Silver Mine (Peru): Acquired in June 2025 for minimal upfront cash (structured earn-in), with ~US$18 million in total funding secured via equity and Glencore's facility.
• Glencore has committed to purchasing 100% of zinc-lead concentrates through 2028, providing revenue certainty and working capital.
• Historical investment totaled US$115 million; the mine operated from 2012–2018, producing ~7.7 million oz silver, 123 million lbs zinc, and 86 million lbs lead from 1.04 million tonnes of ore (average annual: ~1.1 million oz Ag, ~17.6 million lbs Zn, ~12.3 million lbs Pb at ~230 g/t Ag head grade).
• Processing capacity is 600 tonnes per day (tpd) via flotation.
• Phase 1 underground rehabilitation is complete, with permits in place; restart targeted for H1 2026 from the 4090 level, ramping to full capacity.
• An updated NI 43-101 resource estimate (historical: ~2.67 Moz AgEq indicated @626 g/t AgEq) is due Q4 2025 (upcoming catalyst), followed by 16,500 meters of definition drilling.
• Recent surface sampling at Shafra (part of the multi-stage Pierina-Shafra-Mallay system) returned up to 62 g/t Au, indicating district-scale potential.
• Note: Historical data is JORC-based and not NI 43-101 compliant, but I assume targets are met on time.
• Tres Cerros Gold-Silver Project (Peru): Acquired alongside Mallay in June 2025; early-stage with high-grade surface anomalies (e.g., 96% of samples anomalous in Au, up to 62 g/t Au) linking to Mallay's deep extensions.
• No defined resource yet, but positioned as a "standalone gold-silver district" with systematic exploration planned for 2026.
• Kilgore Gold Project (Idaho, USA): Advanced open-pit heap-leach project with indicated resources of 825,000 oz Au (44.6 Mt @ 0.58 g/t; inferred 136,000 oz @ 0.45 g/t), totaling ~1 Moz.
• The 2019 PEA outlined a 5-year mine life at 112,000 oz/year average (15,000 tpd), with pre-tax NPV7% of US$128 million (at US$1,300/oz Au), IRR 41%, initial capex US$81 million, and cash costs US$780/oz.
• Drilling permits are active; I assume development advances post-Mallay cash flows, with production starting 2029.
• Silver City (Germany): Optioned in 2024 from Globex; high-grade epithermal district with 750+ years of historical mining but no modern exploration. Early-stage, adding European diversification.

5-Year Bull Case Forecast (2026–2030)

• This forecast assumes a silver/gold bull market driven by 8% annual real money supply inflation, with prices ramping linearly to specified peaks (Ag US$200/oz, Au US$8,000/oz by 2030).
• Base metal prices (Zn, Pb) also bull to US$3/lb and US$2.50/lb, respectively.
• I model Mallay as the near-term cash generator (restart H1 2026, ramp to 180,000 tpa by 2027 at historical grades: 200 g/t Ag, 6.7% Zn, 3.7% Pb, 0.2 g/t Au; recoveries: 90% Ag/Pb, 85% Zn, 70% Au).
• Kilgore contributes from 2029 (scaled PEA profile: 56,000 oz in 2029, 112,000 oz in 2030).
• Tres Cerros/Silver City add ~CA$200–300 million in speculative optionality (not included).

Key assumptions:

• Production: Mallay: 60,000 t (2026 ramp), 180,000 tpa thereafter. Kilgore: As PEA, partial in forecast window.
• Costs: Mallay opex US$90/t initial (mining/processing/G&A), inflating 8% pa; capex US$18M (2026), US$2M pa sustaining. Kilgore: US$800/oz cash costs (inflating 8%), capex US$100M (2028–2029).
• Other: No debt/taxes modeled for simplicity; constant FX (1.35 CAD/USD); 10% discount rate; perpetuity terminal value on 2030 CF (0% growth).

Price Trajectory (USD):

Projected Annual Free Cash Flows (US$ Millions):

• Cumulative FCF (2026–2030): ~US$1,880 million.
• NPV (10% discount, no terminal): US$1,251 million.
• Enterprise Value (with terminal): US$7,869 million (implies ~CA$10.6 billion fully diluted).

Valuation and Upside

• At 334 million shares, the bull case suggests a per-share value of ~CA$31.80 (undiluted), a 8,616% upside from CA$0.37.
• This embeds Mallay's restart delivering ~US$1.5 billion in LOM NPV at bull prices (vs. historical margins of ~US$15/oz AgEq) and Kilgore's re-rating to ~US$6.0 billion NPV (vs. 2019 PEA's US$128 million at US$1,300/oz).
• Optionality from Tres Cerros (district-scale Au-Ag) and Silver City could add 20–30% to EV.

Risks and Considerations

• Execution: Mallay restart delays (e.g., water issues, permitting) could push production to H2 2026; assumes successful resource expansion via Q4 2025 drilling.
• Metals Prices: Bull case is aggressive; a 50% pullback in Ag/Au could halve NPV.
• Costs/Inflation: 8% pa escalation modeled, but Peru/Idaho labor/fuel volatility could add 2–3% annually.
• Geopolitical: Peru operations face community/tax risks; Idaho is low-risk but permitting-sensitive.
• Dilution: Potential equity raises for Kilgore (~US$100M capex) could add 10–20% shares.

Green Flags

• CEO Shawn Howarth (since 2022) brings investment banking and mining advisory experience from Standard Chartered and Gryphon Partners.
• COO Paul Keller has built mines from greenfield to operations, with prior roles at Barrick and Rio Tinto.
• The team has a solid reputation for turnarounds and sustainable restarts in Peru.
• Skin in the game is evident: Insiders own ~7-10% (including director buys, e.g., Michael Hoffman ~C$131k in 2025), with grants of options/RSUs aligning interests.
• Excellon maintains low leverage post-restructuring.
• Strong hands mitigate: Strategic backers like Glencore (financing/offtake) and insider/institutional participation in oversubscribed raises provide support.

Plenty of Catalysts Ahead (Drill Results, Construction)

• Catalysts are robust into 2026.
• Mallay restart: Underground rehab ongoing, staged mill ramp-up targeting Q2 2026 (600 tpd capacity, fully permitted).
• Exploration: Q4 2025 underground drilling (Isguiz extension, Shafra gold-rich zone; 13,000m+ budgeted), geophysics, and initial results H1 2026.
• Additional upside from Tres Cerros permitting/community agreements and portfolio assets (Kilgore, Silver City).

Already Has Permits/Infrastructure to Some Extent/Brownfields/Optionality

• Mallay is a fully permitted brownfield restart (past-produced by Buenaventura, ~US$115 million historical infrastructure: 600 tpd mill, water treatment, adit/ramp access, 50km underground).
• Quick path to production with existing workforce/plant.
• Optionality across polymetallic (Ag-Pb-Zn) plus gold at Shafra/Mallay Deeps, Tres Cerros bulk-tonnage potential, and exploration projects in stable jurisdictions.

The Stock Is Worth 50% or Less Than NAV (Net Asset Value) or Book Price (Liquidation Value)

• The stock trades at a steep discount to restart NAV.
• Book value supports a baseline, with strong cash position.

Summary

My speculation in GR Silver doubled within a couple of months, so I sold 50% (as is my strategy) and redeployed that cash into Excellon Resources Inc. The monetary metals markets are on fire right now and will be in a bull run for 2026 and I assume 2027.

There will be pullbacks of 20-30% along the way and even a 50% pullback is likely, however if adjusting for inflation and matching 1980 highs, silver is destined to reach USD $220 and gold will move to $8000-$10000.

Excellon has strong hands backing it, Glencore and Eric Sprott for example, and Glencore has an agreement to take all lead-zinc into 2027. Glencore is also assisting with the re-start of the Mallay mine and were partners with the former operators.

I assume this company will experience a dramatic re-rating during the first half of next year due to one of its many catalysts, allowing me to once again, sell 50% (trade half of my upside to protect all of my downside) and redeploy into a new stock.