Take physic, pomp

Excellon Resources (EXN.to): I want to believe

Excellon Resources (EXN.to) is a stock I held from late 2016 to early 2018, finally giving up the position (for a minor profit, but considering the plan it was basically a wash) after one disappointing quarter too many. But it’s one I’ve kept watching, not least because if it does get its act together and start producing the way it could now the La Platosa mine is dry it could be a sudden big winner. So it was good to see its 2q18 production numbers today because…

…that’s a distinct improvement. However, but but buttybut but, I’m not in a hurry to race back into the stock because it has a few things to prove yet, starting with the financials from that production number. When they get filed in mid-August I’ll be looking for lots of things, including…
…this. Previously, EXN would get around 90% of its production in the payables column and that’s what my estimate bar on the right represents (approx 573k oz AgEq). However, in 1q18 the breach between the two was 15.6% and that’s too much, it smacks of by-product metals stuffing the AgEq number without having enough hard cash to support it. So let’s see how close EXN gets to 573k payable, yeah? That and things like being operations cash flow positive, EBIT positive etc. Then there’s the question of how much the strong Zn prices helped and whether we’ll see that lift in Q3 and beyond. So treading carefully here, but I want to believe and though neutral the stock today, would be happy to see them report a couple of blowout financial quarters to reward its loyal holders.

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