Home page of EXN
Chart 2 year

OPERATING MEXICO'S NEWEST BONANZA SILVER MINE - AGGRESSIVELY EXPLORING THE SURROUNDING DISTRICTS

Business Summary

Excellon Resources Inc., a mineral resource company operating in Durango State, Mexico, is committed to building value through production, expansion and discovery. The Company is producing silver, lead and zinc from high-grade manto deposits on its Platosa Property, strategically located in the middle of the Mexican silver belt.

PRODUCE

• High grade, low cost silver producer
• 2.3 million ounces of silver, 10.2 million pounds of lead, and 8.9 million pounds of zinc produced in the fiscal year ended July 31, 2007

EXPAND

• Large under-explored, strategically located property
• Increasing resources and mining capacity while awaiting a mill construction permit
• Evaluating additional properties

DISCOVER

• $12-million exploration program for the fiscal year ending July 31, 2009 underway
• Indications of large-scale mineralization on property
• Multi-tooled, focused exploration has led to steadily increased Mineral Resources since initial discovery in 1999.

STRATEGICALLY LOCATED IN THE MEXICAN SILVER BELT

Projects: Platosa Mine in Northeastern Durango State, Mexico

Excellon Resources Inc. in Durango State, Mexico, is committed to building value through production, expansion and discovery. The Company is producing silver, lead and zinc from high-grade manto deposits on its Platosa Property, strategically located in the middle of the Mexican silver belt.

In fiscal 2009, Excellon's focus remains on increasing its Mineral Resources through an aggressive $12-million exploration program, and expanding its operating capacity with the building of a mill at site. The Platosa Property, not fully explored, has several geological indicators of a large mineralized system, the tracking of which Excellon believes will lead to the discovery of a world class deposit.

The Potential

Excellon is continuing its surface and underground exploration and development program to locate both additional high-grade mineralization near the Platosa test-mine, and a near-source, large tonnage major carbonate replacement deposit ("CRD") system in the Mexican CRD Belt. These deposits, together with major vein systems, support the development of most of the large Mexican underground silver and base metal mines. The Platosa property is strategically located along the geological trend of these large deposits.

The Platosa Mine area is largely overburden covered and exploration into 2008 has relied on a combination of Geology, Natural Source Audio Magneto Tellurics ("NSAMT") geophysics, soil geochemical surveys, and biogeochemical surveys. These methods were instrumental in the discovery of the Guadalupe and Guadalupe South mantos and the NE-1 area mineralization. An airborne electromagnetic and magnetic ("AEM") survey was flown in early 2007; ground induced polarization magnetic and gravity surveys were undertaken in the spring and summer of 2008 and the results are now being incorporated into the Company's target delineation protocols.

The Location

The Platosa Property is well situated for mineral exploration and mine development. Located 45 kilometers north of Torreón, a major population centre with an international airport, Platosa is next to a regional power grid and has paved road access. There is an abundant local labour supply and a large service sector supporting other mines and heavy industrial activity in the region.

Excellon's Platosa property package is extensive at over 24,000 hectares. The mineralized system hosting the known Mineral Resource could extend for up to eight kilometres in any direction and still be on Excellon mineral concessions. Excellon's property holdings are divided into concessions it owns outright (some subject to a royalty), and concessions held under a joint venture agreement with Apex Silver Mines Limited (Excellon 51%, Apex 49%).

Production at Platosa

Platosa is an underground test-mine operation in which the mineralization is accessed by a 4 x 4 metre ramp; the mineralization is mined and trucked to surface, where it is crushed, sampled, and loaded into trucks for shipment. The present production rate (mining and crushing) is approximately 175 tons per day.

Crushed material from Platosa is shipped to the Naica Mill, owned by the Minera Maple division of the Industrias Peñoles Group, in Chihuahua State. Peñoles purchases the mineralization at Platosa based on mutually-agreed assay results, with an 80% provisional payment made, on average, 26 days after shipment. Final settlement is made in the second month following delivery. SGS Minerals Services, Durango, Mexico, independently samples the mineralization on behalf of Peñoles and Excellon.

Miguel Auza Project

Exploration:

The large Miguel Auza Property has high potential for the discovery and exploitation of additional epithermal Ag, (Au), Pb and Zn veins of a style similar to those exploited profitably for decades in the Fresnillo camp 150 km to the south and elsewhere in the prolific Mexican Silver Belt. There is also developing evidence of carbonate replacement deposit (CRD) potential.

Despite the long mining history of the camp very little exploration has been carried out and the historic data record is almost non-existent. During its tenure of the property Silver Eagle focused on developing the Calvario Vein system and only began a concentrated review of the potential of the overall property shortly before ceasing activities. Several additional vein systems are known including those exploited by the Spaniards in the 1500s and the property remains largely under-explored. The Company's intention is to carry out an initial exploration program on the property beginning in the fall of 2009. The goal of this Phase 1 program will be to develop drill targets for a subsequent program.

The Phase 1 program will have three areas of focus as noted below but will be flexible and resources will be reallocated as areas of significant potential emerge. These areas are as follows:

• Calvario Veins - These veins were exploited historically and by Silver Eagle in 2007 and 2008. There is a suggestion that they represent the distal portion of a CRD system to be found at depth or on adjacent, unexplored portions of the system. The program will examine the potential to develop economic tonnages of Ag, Pb, Zn mineralization along the known veins and their possible extensions into less explored adjacent areas. It is highly likely that a drilling program will be required to fully evaluate this possibility;
• North Veins - These high-grade Ag veins were exploited by the Spaniards who stopped exploitation when they reached the water table since no dewatering technology was available at that time. There is a historic shaft, which provided access to these veins. Its rehabilitation to facilitate direct access to the veins at depth will be considered. A Phase 2 drilling program recommendation is likely; and
• Regional Exploration - Basic mapping and sampling will be carried out to more fully understand the potential of the numerous known vein systems and to uncover additional ones. Of particular interest is the possibility of CRD potential on the property.

The three sub-programs will be run in parallel and it is anticipated they will require six months to complete.

Mining Operations:

The Calvario Vein mining operation, accessed by the King Ramp, was placed on care and maintenance in December 2008. Depending on progress of the exploration program, which will require access to portions of the vein, some back filling of the stoped areas may be undertaken to maintain the integrity of the openings should a decision be made to resume mining in the future. The ramp has been developed to a depth of approximately 175 m vertical.

Processing:

A small flotation mill was present on the property when Silver Eagle acquired the property. This mill was expanded and used to process oxide material as Silver Eagle developed the King Ramp and the sulphide portion of the Calvario Vein system. The mill was further expanded and modernized during 2008 and processed Calvario sulphide mineralization for three months until mid-December 2008.

Excellon began shipping Platosa ore to the mill in mid-March 2009. The mill operating schedule is set to match shipments from Platosa and the throughput required to maximize metallurgical results therefore does not always operate seven days a week.

For the mid-March to July 31, 2009 period throughput averaged 280 tonnes per operating day and has been as high as 375 tonnes per day. To the end of July 30,000 tonnes of Platosa ore grading 1,089 g/t Ag, 8.82% Pb, 10.05% Zn had been processed.

Recoveries have averaged 78% for Ag reporting to the Pb concentrate, 10% for Ag reporting to the Zn concentrate for a total of 88% Ag recovery. Pb recovery has averaged 71.3% and Zn recovery 71.1%. Concentrate shipments totaled 2,993 tonnes of silver-lead and 3,386 tonnes of silver-zinc.

Recent News: EXCELLON ANNOUNCES FURTHER EXPANSION OF THE HIGH-GRADE 623 MANTO: 1,195 g/t (35 OPT) Ag, 14.8% Pb, 15.0% Zn over 7.05 m in Hole EX09-LP654

Excellon Resources Inc. announced assay results for six additional holes at its Platosa Property.

Three of these holes were designed to locate massive sulphide extensions to the 623 Manto discovered in July of this year. The results for Holes LP653 and LP654 provide further evidence of the high-grade nature of the manto and there are indications that it may link with the Guadalupe Manto. Hole EX09-LP654 intersected 1,195 g/t Ag, 14.8% Pb, 15.0% Zn over 7.05 metres (m), while hole LP653 located 25 m to the north cut 1,020 g/t Ag, 7.6% Pb, 1.6% Zn over 0.45 m. Such variations in intersection width are not unusual in deposits of this sort and have been experienced elsewhere on the property. Assays for LP653, LP654 and LP645, also in the 623 Manto, are shown in the table below

Drilling to date has defined the 623 Manto as an elongate irregularly-shaped NNE-SSW trending 100 m by 30 m body that remains open, particularly to the south.

"This additional high-grade massive sulphide mineralization in the 623 Manto is very encouraging and we are optimistic that it will add to our Mineral Resource estimate. We expect that a new independently-prepared 43-101 estimate for Platosa will be ready before year-end," said John Sullivan, Excellon's Vice-President Exploration.

In light of these encouraging results and continued strong cash flow from Platosa, a third drill has been mobilized and will resume the sub-program designed to discover the high-tonnage proximal source of the manto deposits. Drilling will begin in the la Zorra area on the southern portion of the Saltillera-la Zorra corridor located approximately five kilometres west of the mantos.

The second drill rig continues to be active 50 to 100 m northeast of the 623 Manto, in the NE-1 extension area. Holes continue to intersect sulphide-rich breccia with limited amounts of semi-massive to massive sulphides. Hole LP649 intersected 1,130 g/t Ag, 16.2% Pb, 1.9% Zn over 0.55 m included within an intersection of 134 g/t Ag, 2.2% Pb, 0.50% Zn over 5.85 m. Drilling continues in this area.

Assays for the six holes reported here are shown in the table below and on the accompanying map. All intervals are estimated true thicknesses. In addition to these six holes there have been 2 holes, which did not intersect significant sulphides drilled since the last exploration press release dated October 6, 2009.

The Platosa exploration program and initial exploration underway at Excellon's Miguel Auza property are supervised by John Sullivan, Excellon's Vice-President of exploration, in consultation with Dr. Peter Megaw of IMDEX Inc. Drill core samples are prepared and assayed by SGS Minerals Services (SGS) in Durango, Mexico. When required, sample pulps are sent to.

Fundamental Considerations

La Platosa, Durango, Mexico

• Currently producing in excess of planned rate of 150 tonnes per day, long term mine plan underway
• Annual US$7.5 Million dollar exploration program in progress
• Over 24 thousand hectares of land

Miguel Auza, Zacatecas, Mexico

• 100% ownership of over 41 thousand hectares of mineral rights
• On site mill & mine built and developed by Silver Eagle Mines Inc.
• Historic mining district with excellent mineral discovery potential using modern technologies

Toronto Stock Exchange Listed - EXN

$13 million of new 2009 equity, in excess of $6million cash at July 09
Strong operating cash flow sufficient to fund exploration program

EXCELLON'S FINANCIAL SITUATION HAS DRAMATICALLY IMPROVED AS THE FIGURES FOR THE 3 AND 9 MONTHS ENDING IN APRIL 2009 DEMONSTRATE:

THE EXPLORATION POTENTIAL IS IMPRESSIVE AS THE DRILL RESULTS BELOW SUGGEST:

EXCELLON PRODUCES ENOUGH CASH-FLOW AND HAS AMPLE LIQUIDITY ON HAND TO ARGRESSIVELY PERSUE ITS OBJECTIVES.

Technical Considerations

Disclosure:
The author has not been paid to write this article, nor has he received any other inducement to do so.

Disclaimer:
The author's objective in writing this article is to invoke an interest on the part of potential investors in this stock to the point where they are encouraged to conduct their own further diligent research. Neither the information nor the opinions expressed should be construed as a solicitation to buy or sell this stock.

Investors are recommended to obtain the advice of a qualified investment advisor before entering into any transactions in the stock - or use their own brains.

In our opinion, the best approach is to buy a diversified portfolio of stocks like THE TIMELESS PRECIOUS METAL FUND or THE SIERRA MADRE GOLD & SILVER VENTURE FUND instead of shares of only a small number of companies.