Insiders Are Buying Excellon Resources

Oct.10.13 | About: Excellon Resources (EXLLF)

In this article, I will feature one silver miner that has seen intensive insider buying during the last 30 days. Intensive insider buying can be defined by the following three criteria:

  1. The stock is purchased by three or more insiders within one month.
  2. The stock is sold by no insiders in the month of intensive purchasing.
  3. At least two purchasers increase their holdings by more than 10%.

Excellon Resources (OTCPK:EXLLF) is a mineral resource company operating in Durango and Zacatecas States, Mexico, and Ontario and Quebec, Canada. It produces silver, lead and zinc on its 100%-owned Platosa Property, located in the middle of the Mexican carbonate replacement deposit / silver belt.

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Insider buying during the last 30 days

Here is a table of Excellon's insider-trading activity during the last 30 days by insider.

Name Title Trade Date Shares Purchased Current Ownership (Direct+Indirect) Increase In Shares
Brendan Cahill CEO Sep 27 - Oct 4 1,150 53,930 shares 2.2%
Oliver Fernandez Director Sep 13 7,800 7,800 shares from 0 to 7,800 shares
John Sullivan Vice-President Sep 30 3,000 4,000 shares 300%
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There have been 11,950 shares purchased by insiders during the last 30 days.

Insider buying by calendar month

Here is a table of Excellon's insider-trading activity by calendar month.

Month Insider buying / shares Insider selling / shares
October 2013 150 0
September 2013 11,800 0
August 2013 0 0
July 2013 0 0
June 2013 1,000 0
May 2013 32,000 0
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There have been 44,950 shares purchased and there have been zero shares sold by insiders since May 2013.

Financials

Excellon reported the second-quarter financial results on August 14, with the following highlights:

Revenue $4.2 million
Net loss $5.0 million
Cash $5.8 million
Production 401,858 silver-equivalent ounces
Net cash costs $12.07 per silver ounce
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The net loss during the quarter resulted from decreased revenue from mine production, which was primarily attributable to the significant decline in silver prices and a negative revenue adjustment of approximately $3 million upon final settlement of sales of concentrate delivered at higher prices prior to the second quarter.

News

Excellon reported production results for the third quarter of 2013 on October 10, with the following highlights:

Production 607,252 silver-equivalent ounces
Net cash costs $7.77 per silver ounce
All-in costs $10.65 per silver ounce
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Excellon expects annual net cash costs and all-in costs (currently $8.77 and $15.60, respectively) to trend lower over the remainder of the year as mining continues to access higher-grade areas. The company remains focused on cost reduction and efficiency, as well as increasing production to maximize operating cash flow.

Excellon is targeting 2013 production of 1.35 million ounces of silver, 8.2 million pounds of lead and 11.9 million pounds of zinc or 2.1 million silver equivalent ounces (based on $24 silver, $0.90 lead and $0.90 zinc) at a targeted all-in cost of $14.00 per silver equivalent ounce.

Competition

Excellon's competitors include U.S. Silver & Gold (OTCQX:USGIF), Great Panther Silver (NYSEMKT:GPL), Scorpio Mining Corporation (SMNPF.PK), Alexco Resource Corporation (NYSEMKT:AXU), SilverCrest Mines (NYSEMKT:SVLC), and Aurcana (OTCPK:AUNFF).

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Excellon has the lowest net cash costs among these seven companies.

Here is a table of these competitors' insider-trading activities during the past six months.

Company Insider buying / shares Insider selling / shares
USGIF 711,915 0
GPL 10,000 0
SMNPF 40,500 0
AXU 10,000 16,068
SVLC 0 139,700
AUNFF 66,000 0
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Only Excellon has seen intensive insider buying during the last 30 days.

Conclusion

There have been three different insiders buying Excellon and there have not been any insiders selling Excellon during the last 30 days. Two of these three insiders increased their holdings by more than 10%. Excellon has an insider ownership of 10%.

Excellon's estimated 2013 silver production is 1.35 million ounces. The company's measured and indicated silver resources are 17.1 million ounces. I have a bullish bias for the stock currently based on the intensive insider buying.

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Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in OTCPK:EXLLF over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.