Excelsior Gold Review and Rating

Excelsior Gold (EXG:AU), developing gold properties in WA for ore processing at nearby external milling facilities, has been classified as a Phase II company and rated ‘3’ (4 March 2016) on the five point PortfolioDirect rating scale where a ‘5’ is the highest rating on the risk adjusted quality scale.  Near term production has been increased by approximately one-third over what had been expected when the October 2015 PortfolioDirect rating was completed.  The rise in the US dollar gold price from $1,160/oz to $1,260/oz added approximately A$33 million to the appraised value.  The company is better positioned from a valuation standpoint but the market value is 46% higher.  The benefit of the current value premium is offset by the loss of future value momentum – a key ingredient in the rating methodology. It will need higher production or a longer operational life to sustain its current valuation which is set to fall after 2016. It is among the best positioned of the early stage gold miners to meet this common challenge but still needs to define a firm plan. (VIEW LINK)