Q&A with Excalibur Resources (C.XBR) Chairman Tim Gallagher

Since you last spoke with Stockhouse in November how has your flagship Catanava project progressed?

Excalibur Resources (CNQ: C. XBR, Stock Forum) is pursuing the micro-mining approach, which is the search for small, near-surface deposits that can be extracted at a low cost. The progress at Catanava is as follows:

• The environmental permit was received in November 2011, which allowed the construction and installation of the plant
• The equipment was installed and tested, all motors are working http://youtu.be/nZ-ZQ5Bu1TA
• The three Action Mining Micron Wave tables have been installed. We’re testing them and material by increasing the size of the batch testing in order to optimize the flow and the grind over the next quarter. http://youtu.be/Xufk-0ZXjEQ
• The construction of the buildings, which contain the wave tables, concentrator and furnace rooms are nearing completion

What is the significance of the 43-101 Technical report on the Catanava Gold Property your company released on April 23, 2012?

The filing of the 43-101 non-resource report is a key step in the TSX-V application process and the goal to increase our profile and share trading.

Also, the document highlights some good results from a surface sample of up to 15.15 g/t gold, 160.7 g/t silver and an underground sample of up to 7.58 g/t gold and 55 g/t silver that were taken by author of the report.

When do you expect being listed on the Toronto Venture Exchange?

We hope that TSX-V listing will take about 90 days.

When does your company expect to begin production?

We are in “test mode” and hope to finalize all equipment adjustments and material tests over the next two to three months such that we are in commercial production later in 2012. Currently, we have 50 tons of ¼ inch material in the fine ore hopper that we are processing.

Are you planning to bring in a partner(s) to help develop this project?

The Minera Catanava project in the Zacatecas State of Mexico is a 51/49% Joint Venture between Minera Apolo as management and Excalibur Resources as finance partner, respectively.

What is the extent of management’s equity stake in the company?

Directors and officers own about 20%. Also, two HNW shareholders hold about 10% each.

How much cash do you have on hand and what is your monthly cash burn rate?

After the current financing, the company will have about $1 million in cash. Since signing the deal September 2010, we have invested any average $100,000 per month into the Catanava project for a total of $1.8 million.

Do you need to raise more money through the equity markets anytime soon?

The financing plus potential warrant exercises over the next year, as well as achieving positive cash flow from operations, means that we will not need to go back to the market.

Where does Excalibur Resources go from here?

The main focus is the completion of the plant including the installation of the roof, security doors, electrical, dore furnace, etc.

Since the explosives application paperwork has been completed, we expect the official military inspection in May and the explosive permit in June.

If everything comes together as planned, our goal is to pay a dividend, based the high margin gold production at our Catanava project in Mexico. To further increase potential cash flows and shareholder value we plan to increase the size of the plant. At current capacity, we have 50 to 100 years of material to process, i.e. 100 km of veins. With the success of this operation, we are on the lookout for other small gold production projects that we can either buy or develop so that we can diversify and grow our cash flow.

Disclosure: Excalibur Resources is a Stockhouse client

http://www.stockhouse.com/Community-News/2012/May/3/Gold-junior-expects-near-term-positive-cash-flow-f

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