Gunnison Copper Corp. - Annual Report 2020

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EXCELSIOR MINING CORP.

ANNUAL INFORMATION FORM For the year ended December 31, 2020

Suite 2400, 1055 West Georgia Street. Vancouver, B.C. V6E 3P3

March 24, 2021

Page

EXCELSIOR MINING CORP. ANNUAL INFORMATION FORM TABLE OF CONTENTS

PRELIMINARY NOTES ........................................................................................................................... 1 Effective Date of Information .......................................................................................................... 1 Currency ........................................................................................................................................... 1 Metric Equivalents ........................................................................................................................... 1 Special Note Regarding Forward-Looking Information .................................................................. 1 Cautionary Note to U.S. Investors – ................................................................................................ 4 GLOSSARY ................................................................................................................................................ 6 ABBREVIATIONS ................................................................................................................................... 10 CORPORATE STRUCTURE ................................................................................................................. 11 Name, Address and Incorporation ................................................................................................. 11 Inter-corporate Relationships ......................................................................................................... 11 DESCRIPTION AND GENERAL DEVELOPMENT OF THE BUSINESS ...................................... 11 Three Year History ........................................................................................................................ 11 Year Ended December 31, 2018 Developments ............................................................................ 12 Year Ended December 31, 2019 Developments ............................................................................ 15 Year Ended December 31, 2020 Developments ............................................................................ 17 Developments Subsequent to December 31, 2020 and Outlook .................................................... 19 NARRATIVE DESCRIPTION OF THE BUSINESS ........................................................................... 21 Summary of the Business ............................................................................................................... 21 Competitive Conditions ................................................................................................................. 21 Employees ...................................................................................................................................... 21 Environmental Protection .............................................................................................................. 21 Social and Environmental Policies ................................................................................................ 22 MINERAL PROPERTIES ....................................................................................................................... 22 General ........................................................................................................................................... 22 Gunnison Project ............................................................................................................................ 22 Other Assets ................................................................................................................................... 50 RISK FACTORS ....................................................................................................................................... 50 DIVIDENDS .............................................................................................................................................. 66 DESCRIPTION OF CAPITAL STRUCTURE ...................................................................................... 66 MARKET FOR SECURITIES ................................................................................................................ 67 Market ............................................................................................................................................ 67 Trading Price and Volume ............................................................................................................. 67 Prior Sales ...................................................................................................................................... 67 ESCROWED SECURITIES AND SECURITIES SUBJECT TO CONTRACTUAL RESTRICTION ON TRANSFER ........................................................................................................... 68 DIRECTORS AND OFFICERS .............................................................................................................. 68 Cease Trade Orders, Bankruptcies, Penalties or Sanctions ........................................................... 70 Conflicts of Interest ....................................................................................................................... 71 LEGAL PROCEEDINGS AND REGULATORY ACTIONS .............................................................. 71 PROMOTERS ........................................................................................................................................... 72 INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS .................. 72 MATERIAL CONTRACTS .................................................................................................................... 72 INTEREST OF EXPERTS ...................................................................................................................... 73 ADDITIONAL INFORMATION ............................................................................................................ 74 AUDIT COMMITTEE ............................................................................................................................. 74

Audit Committee Charter ............................................................................................................... 74 Composition of the Audit Committee ............................................................................................ 74 Relevant Education and Experience .............................................................................................. 74 Reliance on Certain Exemptions .................................................................................................... 75 Reliance on Exemption in Subsection 3.3(2) or Section 3.6 .......................................................... 75 Reliance on Section 3.8 .................................................................................................................. 75 Audit Committee Oversight ........................................................................................................... 75 Pre-Approval Policies and Procedures ........................................................................................... 76 External Auditor Service Fees ....................................................................................................... 76 SCHEDULE A ........................................................................................................................................... 77

ANNUAL INFORMATION FORM EXCELSIOR MINING CORP.

PRELIMINARY NOTES

Effective Date of Information

The information contained in Excelsior Mining Corp.’s annual information form (“ AIF ” or “ Annual Information Form ”) is presented as of December 31, 2020 unless otherwise stated herein. Unless the context otherwise requires, all references to the “ Company ”, “ we ” or “ us ” shall mean Excelsior Mining Corp., together with its subsidiaries.

Currency

Unless specified otherwise, all references in the AIF to “dollars”, “$” or to “US$” are to United States of America dollars and all references to “Canadian dollars” or to “Cdn$” are to Canadian dollars.

Metric Equivalents

For ease of reference, the following factors for converting metric measurements into imperial equivalents are provided:

To Convert From Metric	To Imperial	Multiply by
Hectares	Acres	2.471
Metres	Feet (ft.)	3.281
Kilometres (km.)	Miles	0.621
Tonnes	Tons (2000 pounds)	1.102
Grams/tonne	Ounces (troy/ton)	0.029

Special Note Regarding Forward-Looking Information

This AIF and the documents incorporated by reference herein, contain “forward-looking information” and “forward looking statements” within the meaning of applicable Canadian and United States securities legislation (collectively herein referred to as “ forward-looking statements ”), including the “safe harbour” provisions of provincial securities legislation and the U.S. Private Securities Litigation Reform Act of 1995, Section 21E of the U.S. Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), and Section 27A of the U.S. Securities Act of 1933, as amended (the “ U.S. Securities Act ”). Forward-looking statements may include, but are not limited to, information with respect to:

the future price of copper;
the development of and production from the Gunnison Project (as defined below);
our planned exploration and development activities;
the adequacy of our financial resources;
the estimation of mineral resources and mineral reserves;
realization of mineral resource and mineral reserve estimates;
the timeline for commercial production at the Gunnison Project;

costs and timing of future development;
results of future development programs;
production and processing estimates;
capital and operating cost estimates;
statements relating to the economic viability of the Gunnison Project, including mine life, total tonnes mined and processed and mining operations;
approvals, consents and permits under applicable legislation;
our relationship with community stakeholders;
our executive compensation approach and practice;
litigation risks; currency fluctuations; and
environmental risks.

Wherever possible, words such as “plans”, “expects”, “projects”, “assumes”, “budgeted”, “strategy”, “scheduled”, “estimates”, “forecasts”, “anticipates”, “believes”, “intends” “modeled” and similar expressions or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative forms of any of these terms and similar expressions, have been used to identify forward-looking statements. Statements concerning mineral resource and mineral reserve estimates may also be deemed to constitute forward-looking statements to the extent that they involve estimates of the mineralization that will be encountered if the property is developed. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance are not statements of historical fact and may be forward-looking statements. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation, the following risks and uncertainties referred to under the heading “Risk Factors” in this AIF:

risks relating to the fact that the Company depends on a single mineral project;
operational risks inherent in the conduct of mining activities, including the risk of accidents, labour disputes, availability of reagents and power, increases in capital and operating costs and the risk of delays or increased costs that might be encountered during the development process;
risks inherent in the exploration and development of mineral deposits, including risks relating to changes in project parameters as plans continue to be redefined including the possibility that mining operations may not commence at the Gunnison Project;
assumptions regarding expected capital and operating costs and expenditures, production schedules, economic returns and other projections;
our production estimates, including accuracy thereof;
risks related to general economic conditions and in particular the potential impact of the COVID19 pandemic (“ COVID-19 ”) on the Company or its operations and the mining industry;
the fact that we have no mineral properties in commercial production and no history of production or revenue;
risks relating to variations in mineral resources and reserves, grade or recovery rates resulting from current exploration and development activities;
risks related to fluctuations in the price of copper as the Company’s future revenues, if any, are expected to be derived from the sale of copper;
risks related to a reduction in the demand for copper in the Chinese market which could result in an extended period of lower prices and demand for copper;
financing, capitalization and liquidity risks, including the risk that the financing necessary to fund the development and construction activities at the Gunnison Project may not be available on satisfactory terms, or at all;
the Company has no history of mining operations and no revenues from operations and expects to incur losses for the foreseeable future;

risks associated with secured debt and the copper stream agreement;
risks related to the Company obtaining and maintaining various permits required to conduct its current and anticipated future operations;
risks related to disputes concerning property titles and interest;
risks relating to the ability to access infrastructure;
risks related to the significant governmental regulation to which the Company is subject;
● environmental risks;
climate change risks;
risks related to the adequacy of financial assurance arrangements with State and Federal Governments;
reliance on key personnel;
risks related to increased competition in the market for copper and related products and in the mining industry generally;
cybersecurity risks;
risks related to potential conflicts of interests among the Company’s directors and officers;
exchange rate fluctuations between the Canadian and United States dollar;
uncertainties inherent in the estimation of inferred mineral resources;
land reclamation requirements may be burdensome;
risks associated with the acquisition of any new properties;
risks related to legal proceedings to which the Company may become subject;
potential liabilities associated with the acquisition of JCM (as defined herein);
our ability to comply with foreign corrupt practices regulations and anti-bribery laws;
changes to relevant legislation, accounting practices or increasing insurance costs;
significant growth could place a strain on our management systems;
share ownership by our significant shareholders and their ability to influence our governance;
risks relating to the Company’s Common Shares, including that future sales or issuances of our debt or equity securities may decrease the price of our securities;
the trading price of our Common Shares is subject to volatility due to market conditions;
the absence of dividends or intent to pay dividends in the near future;
certain actions under U.S. federal securities laws may be unenforceable;
our broad discretion relating to the use of any proceeds raised hereunder;
non-U.S. holders of Common Shares could be subject to U.S. federal income tax from the sale or other taxable disposition of Common Shares;
withholding to Non-U.S. investors will apply to our dividends on our Common Shares;
our being treated as a U.S. domestic corporation for U.S. federal income tax purposes;
the uncertainty of maintaining a liquid trading market for the Company’s Common Shares;
the absence of a market through which the Company’s securities, other than Common Shares, may be sold; and
risks related to the debt securities being unsecured.

This list is not exhaustive of the factors that may affect any of our forward-looking statements. Although we have attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Forward-looking statements involve statements about the future and are inherently uncertain, and our actual achievements or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, those referred to in this AIF under the heading “Risk Factors” and elsewhere in this AIF and the documents incorporated by reference. Our forward-looking statements are based on the beliefs,

expectations and opinions of management on the date the statements are made. In connection with the forward-looking statements contained in this AIF and the documents incorporated, or deemed to be incorporated, by reference, we have made certain assumptions about our business, including about our planned exploration, development and production activities; the accuracy of our mineral resource estimates; capital and operating cost estimates; production and processing estimates; the results, costs and timing of future exploration and drilling; timelines and similar statements relating to the economic viability of the Gunnison Project; timing and receipt of approvals, consents and permits under applicable legislation; and the adequacy of our financial resources. We have also assumed that no significant events will occur outside of our normal course of business. Although we believe that the assumptions inherent in the forward-looking statements are reasonable as of the date of this AIF, forward-looking statements are not guarantees of future performance and, accordingly, undue reliance should not be put on such statements due to the inherent uncertainty therein. For the reasons set forth above, prospective investors should not place undue reliance on forward-looking statements. Except as required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward-looking information.

Cautionary Note to U.S. Investors –

Technical disclosure regarding our properties included in this AIF and in the documents incorporated herein by reference has not been prepared in accordance with the requirements of U.S. securities laws. Without limiting the foregoing, such technical disclosure uses terms that comply with reporting standards in Canada and certain estimates are made in accordance with National Instrument 43-101 — Standards of Disclosure for Mineral Projects (“ NI 43-101 ”). NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Unless otherwise indicated, all mineral reserve and mineral resource estimates contained in the technical disclosure have been prepared in accordance with NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum Definition Standards on Mineral Resources and Reserves (“ CIM Definition Standards ”).

Canadian standards, including NI 43-101, differ significantly from the historical requirements of the Securities and Exchange Commission (the “ SEC ”), and mineral reserve and resource information contained or incorporated by reference in this AIF may not be comparable to similar information disclosed by U.S. companies.

The SEC has adopted amendments to its disclosure rules to modernize the mineral property disclosure requirements for issuers whose securities are registered with the SEC. These amendments became effective February 25, 2019 (the “ SEC Modernization Rules ”) and, following a two-year transition period, the SEC Modernization Rules will replace the historical property disclosure requirements for mining registrants that are included in SEC Industry Guide 7. U.S. companies will be required to provide disclosure on mineral properties under the SEC Modernization Rules for fiscal years beginning January 1, 2021 or later.

Under the SEC Modernization Rules, the definitions of “proven mineral reserves” and “probable mineral reserves” have been amended to be substantially similar to the corresponding CIM Definition Standards and the SEC has added definitions to recognize “measured mineral resources”, “indicated mineral resources” and “inferred mineral resources” which are also substantially similar to the corresponding CIM Definition Standards; however, there are still differences in the definitions and standards under the SEC Modernization Rules and the CIM Definition Standards. Therefore, the Company’s mineral resources and reserves as determined in accordance with NI 43-101 may be significantly different than if they had been determined in accordance with the SEC Modernization Rules.

NOTICE PURSUANT TO TREASURY DEPARTMENT CIRCULAR 230: NOTHING CONTAINED IN THIS AIF CONCERNING ANY U.S. FEDERAL TAX ISSUE IS INTENDED OR WRITTEN TO BE USED, AND IT CANNOT BE USED, BY A HOLDER, FOR THE PURPOSE OF AVOIDING U.S. FEDERAL TAX PENALTIES UNDER THE CODE (AS DEFINED BELOW). THIS SUMMARY WAS WRITTEN TO SUPPORT MATTERS ADDRESSED BY THIS DOCUMENT. EACH HOLDER SHOULD SEEK U.S. FEDERAL TAX ADVICE, BASED ON SUCH HOLDER’S PARTICULAR CIRCUMSTANCES, FROM AN INDEPENDENT TAX ADVISOR.

GLOSSARY

In the AIF, unless otherwise defined or unless there is something in the subject matter or context inconsistent therewith, the following terms have the meanings set forth herein or therein:

“ AIF ” or “ Annual Information Form ” means this annual information form and any appendices, schedules or attachments hereto;

“ Altius ” means Altius Royalty Corporation;

“ Altius Agreement ” means the Share Purchase and Royalty Option Agreement dated July 19, 2013 between Excelsior, the Trust and Callinan. Pursuant to the terms of the Altius Agreement, Callinan had the option to acquire certain gross revenue royalties (“ GRRs ”) on the Gunnison Project. On May 5, 2015, Altius Minerals Corporation acquired all of the outstanding securities of Callinan and on October 1, 2016, Altius Prairie Royalties Corp. and Callinan were amalgamated to form Altius;

“ AzTech ” means AzTech Minerals, Inc., an Arizona corporation, which was merged with and into Excelsior Arizona;

“ BCBCA ” means the Business Corporations Act (British Columbia), C-57, as amended;

“ Business Day ” means any day on which commercial banks are generally open for business other than a Saturday, Sunday or a day observed as a holiday (i) in Vancouver under the laws of British Columbia, (ii) in Toronto under the laws of Ontario, or (iii) under the federal laws of Canada;

“ Callinan ” means Callinan Royalties Corporation;

“ Code ” means the U.S. Internal Revenue Code of 1986, as amended;

“ Common Share ” means the common (voting) shares in the capital of Excelsior;

“ Company ” means, collectively, Excelsior, Excelsior Arizona, Excelsior JCM and Excelsior Holdings;

“ Control Person ” means any Person that holds or is one of a combination of Persons that holds a sufficient number of any of the securities of an issuer so as to affect materially the control of that issuer, or that holds more than 20% of the outstanding voting securities of an issuer except where there is evidence showing that the holder of those securities does not materially affect the control of the issuer;

“ Definitive Agreement ” means the agreement and plan of merger dated as of August 19, 2010 among Excelsior, Excelsior Arizona and AzTech, as amended from time to time;

“ Excelsior ” means Excelsior Mining Corp., a corporation incorporated under the laws of the Province of British Columbia;

“ Excelsior Arizona ” means Excelsior Mining Arizona, Inc., a company incorporated under the laws of Arizona, and which is a wholly-owned subsidiary of Excelsior;

“ Excelsior JCM ” means Excelsior Mining JCM, Inc., a company incorporated under the laws of Arizona, and which is a wholly-owned subsidiary of Excelsior;

“ Excelsior Holdings ” means Excelsior Mining Holdings, Inc., a company incorporated under the laws of Arizona, and which is a wholly-owned subsidiary of Excelsior;

“ Excelsior Stock Option Plan ” means the stock option plan of Excelsior, pursuant to which options to purchase Common Shares may be issued in accordance with the policies of the TSX;

“ Exchange ” or “ TSX ” means the Toronto Stock Exchange;

“ Feasibility Study ” or “ FS ” means the feasibility study on the Gunnison Project that is the subject of the Technical Report;

“ Greenstone ” means Greenstone Excelsior Holdings L.P., an affiliate of Greenstone Resources;

“ Greenstone II ” means Greenstone Resources II L.P., an affiliate of Greenstone Resources;

“ Greenstone IR Agreement ” means the Investor Rights Agreement dated August 13, 2014 between Greenstone and Excelsior, as amended by the Amending Agreement to the Greenstone IR Agreement dated January 19, 2018 between the Company, Greenstone and Greenstone No. 2 and further amended by the Second Amending Agreement to the Greenstone IR Agreement, dated December 5, 2018 between the Company, Greenstone, Greenstone II, Greenstone No. 1 and Greenstone No. 2;

“ Greenstone No. 1 ” means Greenstone Co-Investment No. 1 (Excelsior) L.P. an affiliate of Greenstone Resources;

“ Greenstone No. 2 ” means Greenstone Co-Investment No. 2 (Excelsior) L.P. an affiliate of Greenstone Resources;

“ Greenstone Resources ” means Greenstone Resources L.P.;

“ Greenstone 2018 Subscription Agreement ” means the Subscription Agreement dated November 21, 2018 between Greenstone II, Greenstone No. 1, Greenstone No. 2 and Excelsior pursuant to which Greenstone II, Greenstone No. 1 and Greenstone No. 2 collectively subscribed for a total of 13,050,840 Common Shares at a purchase price of Cdn$0.9462 per Common Shares for gross proceeds of US$9,443,793.83;

“ Gunnison Project ” means the Gunnison Copper Project consisting of unpatented mining claims, private land, exploration permits, mineral leases and direct ownership of mineral rights in an area that encompasses approximately 10 square miles, located in Cochise County, Arizona, approximately 62 miles east of Tucson, Arizona in the Johnson Camp mining district;

“ IRS ” means the United States Internal Revenue Service;

“ JCM ” or “ Johnson Camp ” means the Johnson Camp Copper mine located immediately adjacent to the Gunnison Project;

“ JCM Purchase Agreement ” means the asset purchase agreement dated October 7, 2015 between Christopher G. Linscott (as court appointed receiver for the assets of Nord) and Excelsior JCM pursuant to which Excelsior JCM acquires all of the assets of Nord as they relate to the JCM for total consideration of US$8.4 million;

“ Nebari ” means Nebari Natural Resources Credit Fund I, LP;

“ Nebari Credit Agreement ” means the credit agreement dated October 31, 2019 Excelsior, Excelsior Arizona and Nebari pursuant to pursuant to which Nebari has provided the Nebari Credit Facility;

“ Nebari Credit Facility ” means the US$15 million credit facility provided by Nebari to Excelsior and Excelsior Arizona pursuant to the Nebari Credit Agreement;

“ Non-U.S. Holder ” means any beneficial owner of Common Shares that is neither a U.S. Holder nor a partnership (including an entity treated as a partnership for U.S. federal income tax purposes).

“ Non-Voting Shares ” means the non-voting shares of Excelsior;

“ Nord ” means Nord Resources Corporation;

“ North Star Deposit ” means the North Star Deposit of the Gunnison Project as identified on Figure 1-1 in this AIF;

“ Person ” or “ person ” means a company or individual;

“ South Star Deposit ” means the South Star Deposit of the Gunnison Project as identified on Figure 1-1 in this AIF;

“ Stream Agreement ” means the copper purchase and sale agreement (the " Stream Agreement ") dated October 30, 2018 between Triple Flag, Excelsior, Excelsior Arizona and Excelsior JCM pursuant to which Triple Flag has committed to fund a deposit of US$65 million for the future purchase of refined copper from Excelsior Arizona;

“ Tax Act ” means the Income Tax Act (Canada), as amended, including the regulations promulgated thereunder;

“ Technical Report ” or “ Report ” means the technical report entitled “Gunnison Copper Project NI 43-101 Technical Report, Feasibility Study”, dated effective December 17, 2016 prepared by Richard Zimmerman, SME-RM.; Neil Prenn, MMSA-QPM; Thomas Drielick, P.E; Dr. Ronald J. Roman, P.E., D.Sc.; Douglas Bartlett, R.G.; and Michael Gustin, P.G., Ph.D.;

“ Triple Flag ” means Triple Flag Mining Finance Bermuda Ltd.;

“ Triple Flag Subscription Agreement ” means the subscription agreement dated November 30, 2018 between Triple Flag and Excelsior pursuant to which Triple Flag subscribed for a total of 13,818,977 Common Shares at a purchase price of Cdn$0.9462 per Common Share for gross proceeds of US$10 million;

“ Trust ” means the James L. Sullivan Trust dated November 24, 2004;

“ TSX ” or “ Exchange ” means the Toronto Stock Exchange;

“ U.S. ” or “ United States ” means the United States of America, any state thereof, and the District of Columbia;

“ U.S. Holder ” means a beneficial owner of Common Shares, that is, for U.S. federal income tax purposes: (i) a citizen or individual resident of the United States; (ii) a corporation (or other entity taxable as a corporation) organized under the laws of the United States, any state thereof or the District of Columbia; (iii) an estate whose income is subject to U.S. federal income taxation regardless of its source; or (iv) a trust that (1) is subject to the primary supervision of a court within the U.S. and the control of one or more U.S.

persons for all substantial decisions or (2) has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person; and

Words importing the singular number, where the context requires, include the plural and vice versa and words importing any gender include all genders.

ABBREVIATIONS

In the AIF, unless otherwise defined or unless there is something in the subject matter or context inconsistent therewith, the following abbreviations have the meanings set forth herein or therein:

Abbreviation	Term
%	percent
ADEQ	Arizona Department of Environmental Quality
APP	Aquifer Protection Permit
ASCu	Acid-soluble copper
AzTech	AzTech Minerals, Inc.
BADCT	Best-Available Demonstrated Control Technology
cm	Centimeter
Cu	Copper
EIS	Economic Impact Study
ft	foot (feet)
GA	General Arrangement
gpl	gram per liter
gpm	gallons per minute
G&A	General & Administrative
Ha	hectares
HDPE	High Density Polyethylene
IRR	Internal Rate of Return
ISR	In Situ Recovery
km	kilometer
kV	kilovolt
lb	pound
lixiviant	liquid medium used for metal extraction
M	meter
M3	M3 Engineering & Technology Corp.
Ma	million years ago
MDA	Mine Development Associates
Mlb	million pounds
mm	millimeter
NI 43-101	Canadian National Instrument 43-101
NPV	Net Present Value
PLS	Pregnant Leach Solution
QA/QC	Quality Assurance/Quality Control
RC	reverse circulation drilling
SEC	U.S. Securities & Exchange Commission
SG	specific gravity
SX-EW	Solvent Extraction (SX) / Electrowinning (EW)
TCu	Total copper
UIC	Underground Injection Control
WTP	Water treatment plant

CORPORATE STRUCTURE

Name, Address and Incorporation

Excelsior was incorporated under the name “Excelsior Mining Corp.” pursuant to the provisions of the BCBCA on June 9, 2005 with an authorized capital of an unlimited number of Common Shares without par value.

On October 14, 2010, a special resolution of shareholders was passed to create a new class of shares, the NonVoting Shares. Also on October 14, 2010, Excelsior effected consolidation of its Common Shares on the basis of three pre-consolidation Common Shares for one post-consolidation Common Share. Presently, the authorized share capital of Excelsior consists of an unlimited number of Common Shares, without nominal or par value, and an unlimited number of Non-Voting Shares, without nominal or par value. The Non-Voting Shares are convertible into Common Shares on the basis of one Non-Voting Common Share for one Common Share at the election of the holder of such Non-Voting Common Shares. All Common Share numbers reported in this AIF are reported on a post-consolidation basis with a corresponding adjustment to Common Share price if applicable.

The Common Shares are listed on the TSX under the trading symbol “MIN” and trade on OTCQX International under the symbol “EXMGF” and on the Frankfurt Exchange under the symbol “3XS”. Excelsior’s head office is located at Concord Place, 2999 N. 44th St, Suite 300, Phoenix, AZ, USA 85018 and its registered and records office is located at Suite 2400, 1055 West Georgia Street, Vancouver, British Columbia, V6E 3P3, Canada.

Inter-corporate Relationships

As set out in the corporate structure chart below, Excelsior has two wholly-owned subsidiaries, Excelsior Arizona and Excelsior Mining Holdings, Inc., both incorporated under the laws of Arizona.

100%		EXCELSIOR MINING CORP. (British Columbia)	100%
			100%
EXCELSIOR MINING ARIZONA, INC.(1) (Arizona)			EXCELSIOR MINING HOLDINGS, INC. (Arizona)
100%
Gunnison Project and Johnson Camp (Arizona)

Effective March 1, 2021, Excelsior JCM was merged with and into Excelsior Arizona, with Excelsior Arizona as the surviving corporation.

DESCRIPTION AND GENERAL DEVELOPMENT OF THE BUSINESS

Three Year History

The principal business of Excelsior is the acquisition, exploration and development of copper mineral properties in Arizona. Significant business, operations and management developments for Excelsior over the three most recently completed fiscal years have been as follows:

Year Ended December 31, 2018 Developments

Closing of the Second Tranche of the 2017 Offering

On January 22, 2018, Excelsior announced that it closed the second tranche of a non-brokered private placement to raise up to a total of Cdn$26 million (approximately US$20.2 million) through the issuance of up to 26 million Common Shares at a price of Cdn$1.00 per Common Share (the “ 2017 Offering ”). The second tranche resulted in the Company issuing to Greenstone No. 2, 16,467,200 Common Shares at a price of Cdn$1.00 per Common Share for gross proceeds of Cdn$16,467,200 (approximately US$12.8 million). The first and second tranches of the 2017 Offering resulted in the Company issuing 38,635,200 Common Shares for aggregate gross proceeds of approximately US$30 million.

Permitting Process

On January 23, 2018, Excelsior announced that the EPA informed the Company that the public comment period for the UIC Permit had been extended in order to facilitate a public meeting scheduled for February 27, 2018 in Dragoon, Arizona.

On March 5, 2018, Excelsior announced that the EPA had informed the Company that the public comment period for the UIC Permit had officially ended. The EPA would review and respond to all comments received and after the conclusion of this process the UIC Permit would be issued. On June 25, 2018, Excelsior announced that the EPA had issued the UIC Permit with an effective date of August 1, 2018. The UIC Permit allows for the production of up to 125 million pounds of copper per annum.

On August 6, 2018, Excelsior announced that the 30-day appeal period with respect to the UIC Permit had ended. A total of two appeals were filed with the Environmental Appeals Board (the “ EAB ”); however, one of these appeals was subsequently withdrawn prior to the termination of the appeal period. The remaining appeal raised no new objections that were not previously addressed as part of the comprehensive permit review process that was undertaken by the EPA.

On October 5, 2018, Excelsior announced that a Settlement Agreement (the “ Settlement Agreement ”) had been concluded that would result in the dismissal of the appeal filed with respect to the UIC Permit. As per the terms of the Settlement Agreement, Excelsior, the EPA, and the Petitioners submitted to the EAB a joint stipulated motion to dismiss the appeal. The Settlement Agreement provides for additional monitoring wells and certain other matters. The Settlement Agreement does not take the place of the extensive protective measures, monitoring and reporting requirements of the UIC Permit and the APP. However, it does provide for additional items that are of benefit to local stakeholders.

On October 16, 2018, Excelsior announced that the EAB accepted the joint motion dismissing the appeal, and the EPA lifted the stay on the UIC Permit, thereby resulting in the UIC Permit becoming effective. The permitting process is now completed with all key operating permits in place and effective.

Project Financing Package

On October 31, 2018, Excelsior announced that it had entered into an agreement for a US$75 million project financing package. The US$75 million project financing package (collectively, the " Project Financing ") will be provided by Triple Flag, and consists of a US$65 million copper metal stream (the “ Stream ”) and a concurrent US$10 million private placement of common shares of Excelsior (the “ Equity Placement ”). The Company entered into the Stream Agreement with Triple Flag, whereby Triple Flag committed to fund a deposit of US$65 million (the " Stage 1 Upfront Deposit ") against the future sale and delivery by Excelsior Arizona of a percentage of the refined copper production from the Gunnison Project. Excelsior will sell to Triple Flag this percentage of refined copper at a price equal to 25% of the copper spot price. The exact percentages of copper production to be sold to Triple Flag varies as per the total production capacity. These percentages are detailed in the table below.

	Stage 1 (25 M lbs/yr)	Stage 2 (75 M lbs/yr)	Stage 3 (125 M lbs/yr)
Stage 1 Upfront Deposit	16.5%	5.75%	3.5%

Subsequent to notice from Excelsior that the Company will be expanding production capacity to an amount equal to or greater than 50 million pounds per annum, Triple Flag will have the option to increase its stream participation by paying an additional US$65 million (the “ Expansion Upfront Deposit ”).

Excelsior also retains the option to reduce the amount of the Stream by 50% by making a buy-down payment to Triple Flag (the “ Buy-Down Payment ”). The amount of the Buy-Down Payment depends on whether Triple Flag has exercised its option to provide the Expansion Upfront Deposit. The Buy-Down Payment is calculated as an amount that provides Triple Flag with an internal rate of return of 15% on 50% of the Stage 1 Upfront Deposit and, if applicable, 15% on 50% of the Expansion Upfront Deposit (in each case after taking into account the value of Stream deliveries (net of the 25% purchase price payment for such deliveries) made to Triple Flag prior to its payment.

The table below shows the percentage of production to be acquired by Triple Flag based on scenarios that include Triple Flag’s Expansion Option and Excelsior’s Buy-Down Right.

	Stage 1 (25 M lbs/yr)	Stage 2 (75 M lbs/yr)	Stage 3 (125 M lbs/yr)
Stage 1 Upfront Deposit + Expansion Option	16.5%	11.0%	6.6%
Stage 1 Upfront Deposit + Expansion Option + Buy-Down Right	16.5%	5.5%	3.3%
Stage 1 Upfront Deposit + Buy-Down Right	16.5%	2.875%	1.75%

In conjunction with the Stream, Excelsior completed the Equity Placement to raise proceeds of US$10 million (net of applicable fees and expenses). The Equity Placement consisted of the issuance to Triple Flag of an aggregate of 13,818,977 Common Shares at an aggregate subscription price of US$10 million, or equal to Cdn$0.9462 per share.

On November 30, 2018, Excelsior announced that it closed the Project Financing consisting of the Stream and the Equity Placement. The closing of the Project Financing resulted in Excelsior receiving initial gross proceeds of US$20 million. This amount consists of the initial US$10 million of the Stage 1 Upfront Deposit under the terms of the Stream Agreement, and US$10 million proceeds of the Equity Placement. The balance of the Stage 1 Upfront Deposit was provided in instalments at the request of Excelsior as it expended or allocated previously received funds for the construction of the Gunnison Copper Project.

In consideration of the Stream, Excelsior also issued to Triple Flag 3.5 million five-year common share purchase warrants, for a five-year term expiring on November 30, 2023, entitling Triple Flag to purchase 3.5 million Common Shares at an exercise price of Cdn$1.50 per share.

2018 Greenstone Financing

On November 21, 2018, Excelsior announced that Excelsior and Greenstone No. 1, Greenstone No. 2 and Greenstone II entered into the Greenstone 2018 Subscription Agreement with respect to the exercise of Greenstone’s pro-rata right over the issuance of Common Shares. Excelsior issued to Greenstone No. 1, Greenstone No. 2 and Greenstone II, collectively, an aggregate of 13,050,840 Common Shares at an aggregate subscription price of US$9,443,793.83 million, or equal to Cdn$0.9462 per share at current exchange rates (the “ 2018 Greenstone Financing ”).

On December 6, 2018, Excelsior announced the closing of the 2018 Greenstone Financing. Excelsior issued an aggregate of 13,050,840 Common Shares to Greenstone No. 1, Greenstone No. 2 and Greenstone II. Greenstone Resources and its affiliates now beneficially holds a total of 113,928,937 Common Shares, which represents approximately 47.74% of the issued and outstanding Common Shares.

Mine Construction Commences at the Gunnison Project

On December 4, 2018, Excelsior announced that mine construction had commenced at the Gunnison Project.

Excelsior’s drill contractor has commenced drilling the production wellfield and the accompanying compliance wells. A total of 63 wells, including 41 production wells and 22 compliance wells totalling approximately 82,000 feet was completed. The significant number of compliance wells will ensure groundwater monitoring as per state and federal regulatory requirements. The initial wellfield area will be 400 feet by 400 feet with a spacing of approximately 70 feet between delivery and production wells.

Construction activities included:

Wellfield drilling and infrastructure – The wellfield has been designed to provide maximum operational flexibility including reversing wells and adjustable flowrates to maximize copper production.
Access road construction - An additional access road south of the I10 Highway is currently being installed.
Johnson Camp Mine (“JCM”) plant upgrades – Upgrades to the processing facilities include enhanced controls and instrumentation, new rectifiers, increased solution heating capacity as well as a number of other modifications that will ensure Gunnison produces Grade A, 99.999% pure copper cathode.
Pipeline distribution and infrastructure – A two-mile-long high-density polyethylene (HDPE) pipeline corridor will safely transport solution to the JCM processing facilities. Pipeline corridor liners, double-pipe containment and maintenance ponds will ensure best practice in terms of environmental management and safety.
Electrical distribution and infrastructure – Electrical distribution to the wellfield will include moving and utilizing the existing substation near the crushing facilities that are currently on care and maintenance; thereby providing substantial cost savings to Excelsior.
Process pond upgrades and completions – The existing ponds are being modified to accommodate the copper solutions from the wellfield. Additional pregnant leach solution (PLS) capacity is also being created at Gunnison to provide operational flexibility.
New acid storage facilities – These new facilities have been designed to enable the Company to take advantage of market acid pricing opportunities as they arise.

Altius Exercises Final Royalty Option

On December 5, 2018, Excelsior announced that Altius had exercised the final royalty option under the Altius Agreement. As a result of the exercise of the final option, Altius paid the Company Cdn$5.0 million and in return received an additional gross revenue royalty (“ Construction GRR ”) on the Gunnison Project.

Under the terms of the Construction GRR, Altius has paid Cdn$5.0 million for a gross revenue royalty that is equal to (i) 0.625% while the plant capacity of all the plants operated or constructed by the Company or its affiliates for use in connection with the Gunnison Project (“ Plant Capacity”) is less than 75 million lbs. of copper per annum; and (ii) 0.5% while the Plant Capacity is greater than or equal to 75 million lbs. of copper per annum.

Combined with the GRRs that Altius previously acquired, Altius now holds a 1.625% GRR on the Gunnison Project while Plant Capacity is less than 75 million lbs. of copper per annum and 1.5% while the Plant Capacity is greater than or equal to 75 million lbs. of copper per annum.

Year Ended December 31, 2019 Developments

Mine Construction Progress Reports for the Gunnison Project

On January 31, 2019, Excelsior provided a mine construction progress report for the Gunnison Project. Construction highlights include:

A new access road south of the I10 Highway has been installed. Access to the production wellfield has been improved and overall transport efficiencies have been upgraded.
Collar drilling and cement casing of the initial wells was on-going in advance of down-hole activities, such as the installation of pumps and instrumentation.
Construction of the pipeline corridor connecting the processing facilities at the Johnson Camp Mine to the wellfield commenced. Jack and bore, the method of horizontal drilling that was employed to install a pipeline under the I10 Highway, was underway. Crews had completed the launch and receiving pits; horizontal boring was scheduled to mobilize in March 2019.

On May 9, 2019, Excelsior announced that it had successfully conducted production wellfield pump tests and provided a mine construction update report on the power transmission line, wellfield, pipeline corridor, acid storage tanks, evaporation and pregnant leach ponds, the JCM SX-EW facility upgrades and staffing.

On June 27, 2019, Excelsior announced that excavation under the I-10 Highway has been completed, allowing the pipeline corridor to be connected from the Gunnison production wellfield to the JCM processing facilities.

On July 16, 2019, Excelsior announced that it had completed the electrical power upgrades at the Gunnison Project. The power transmission line to the production wellfield is now ready to be energized. The new 69k/volt transmission line has been successfully linked over the I-10 freeway; thereby connecting the production wellfield to the newly relocated and upgraded substation at the Johnson Camp Mine. At the new substation, power will be transformed for distribution throughout the processing plant. Additionally, the Company has also completed new power transmission lines with pole transformers for the hydraulic control wells and to the evaporation pond.

On August 13, 2019, Excelsior announced that it had received the first delivery of acid to the Gunnison Copper Project in southern Arizona. In July, Excelsior completed the construction of three new acid storage tanks and a new acid unloading facility. The new acid storage tanks have capacity for 7500 tons of sulphuric acid, providing for excess operational and purchasing flexibility.

On August 27, 2019, Excelsior announced the successful completion of construction of the two-mile highdensity polyethylene (HDPE) pipeline corridor connecting the JCM processing facility to the production wellfield. Construction of the pipeline corridor included the installation of a bridge over an area of the property where elevation is required, and a 460-foot tunnel under the I-10 highway. The pipeline corridor contains 18" and 20” diameter PLS and raffinate lines, as well as a freshwater line and a utility line.

On September 10, 2019, Excelsior announced the successful completion of all ponds essential for production at the Gunnison Project. The Gunnison Project has six major ponds represented by five types: Pregnant Leach Solution (PLS), raffinate, evaporation, utility and draindown ponds. Some ponds are retrofits of existing ponds, while others are completely new constructions. Together, the PLS and raffinate ponds provide a closed-loop system for circulating mining fluids between the JCM production facilities and the wellfield. Excess solution will be transferred to the evaporation pond. Excelsior’s federal operating permit requires a bleed in excess of recovered solutions in order to maintain hydraulic control of wellfield operations. This bleed will be delivered to the evaporation pond for mechanically assisted evaporation. Additionally, there is a new utility pond that will be able to accept either raffinate or PLS solutions to give operational flexibility; and there is also a newly constructed pipeline draindown pond that will capture any solutions should Excelsior need to perform maintenance on the pipeline.

On September 12, 2019, Excelsior announced the successful completion of the drilling of the production wellfield at the Gunnison Project. A total of 41 production wells have been successfully drilled. The depth of each well is approximately 1300 feet, and all wells are open within the copper ore body. Injection and recovery wells are interspaced in an alternating and repeating pattern throughout the wellfield; spacing is approximately 70 feet from each injection well to a recovery well. Installation of the necessary infrastructure and instrumentation, including stainless steel pumps in the recovery wells, was subsequently completed. Working in parallel to the drilling of the injection and recovery wells, 16 compliance and monitoring wells surrounding the production wellfield have also been completed. Additionally, the primary header station, which contains piping connections and the controls needed to monitor and adjust flow rates, has been constructed.

Nebari Credit Facility

On November 1, 2019, Excelsior announced that it and Excelsior Arizona had entered into the Nebari Credit Agreement for the Nebari Credit Facility. The Nebari Credit Facility provides for an initial draw of US$5 million (the “ Initial Draw ”), and two additional draws of US$5 million each at the sole option of Excelsior Arizona. There are no common shares, warrants or other convertible securities issuable to Nebari in connection with the Nebari Credit Facility.

The Nebari Credit Facility has an initial term of 15-months from the date of the Initial Draw (the “ Maturity Date ”). The Nebari Credit Facility may be extended for up to two additional six-month periods (21-months and 27-months from the date of the Initial Draw). The proceeds of the Nebari Credit Facility were advanced to Excelsior Arizona, with Excelsior and one of its subsidiaries acting as guarantor for the Nebari Credit Facility. The Nebari Credit Facility is secured against the assets of Excelsior and certain of its subsidiaries. The Nebari Credit Facility shall bear interest at 14.2% per annum, payable monthly. An arrangement fee of 2.0% (US$300,000) (the “ Arrangement Fee ”) of the total available funds under the Credit Facility was paid on closing. The Arrangement Fee is creditable against interest payable on the draws under the Credit Facility, to a maximum of US$100,000 of interest per each draw.

Excelsior receives EPA Approval to Commence Mining Operations

On December 23, 2019, Excelsior announced that approval to commence mining operations through the injection of acid at the Gunnison Project had been received from the EPA.

Year Ended December 31, 2020 Developments

Mining Operations commence at the Gunnison Project

On January 2, 2020, Excelsior announced that it had commenced mining operations at the Gunnison Project. Delivery of mining fluids to the copper orebody commenced with fluids circulating through a closed-loop system until the concentration of copper held in solution meets sufficient grade to be treated through the JCM processing facilities to then extract copper and produce copper cathode sheets.

Operations Updates

On January 8, 2020, Excelsior provided an update on operations at the Gunnison Project. Initial copper recovery grades were exceeding feasibility study expectations. Pregnant leach solution (PLS) grade was measuring 0.15 grams per liter (gpl) copper in the primary recovery pond. Acid injection was being steadily increased and was at approximately 50% of the full production rate.

On February 4, 2020, Excelsior provided an update following the first month of mining operations at the Gunnison Project, announcing that it has collected a significant amount of data over the first month of operations and based on the data has identified optimization programs that are currently being implemented.

Excelsior completed the following optimizations to the production wellfield:

Improved preventative maintenance to limit pump and wellfield down-time;
Injection wells were retrofitted with pumps allowing them to be used as recovery wells when needed; and
Wellheads and related piping were reconfigured to allow for both injection and recovery operations in each well, this addition will make the wellfield entirely reversable in terms of fluid flow; thereby allowing for greater flexibility during operations.

These upgrades were planned to take place over time once nameplate production had been achieved; however, Excelsior decided to implement these changes during the ramp-up period to assist with breakthrough and production optimization.

On March 26, 2020, Excelsior provided an operations update, announcing that the retrofit and wellfield upgrades had been successfully completed. Excelsior also announced that due to unfolding global COVID19 pandemic, it was placing the Gunnison Project on temporary suspension, advising that the wellfield would continue to be maintained in accordance with all state and federal permit requirements during the suspension.

On April 9, 2020, Excelsior provided an update on the temporary suspension of operations at the Gunnison Project, announcing that it was taking steps to conserve cash and in order to provide liquidity during the suspension, it had received the second installment of the Nebari Credit Facility in the amount of US$5,000,000. Excelsior also announced that it was reducing its workforce, while retaining the personnel necessary to maintain the facilities and sustain environmental monitoring and compliance requirements, The Gunnison Project would be maintained in a safe care and maintenance state allowing Excelsior the ability to re-start the Project once the uncertainty caused by the COVID-19 pandemic was resolved.

On August 12, 2020, Excelsior announced the appointment of Mr. Robert Winton as Senior Vice President and General Manager of the Gunnison Project. Excelsior also provided an operations update, announcing that despite continued uncertainty surrounding the COVID-19 pandemic, it was planning for an eventual restart of mining operations and had recently begun injecting acid solution into a limited number of wells and then recovering solution from adjacent wells. The purpose of these activities was to test the retro-fit wells under small-scale operating conditions and to gain knowledge on the new “Push-Pull” operating procedures. Excelsior also announced that the small-scale activities are preferred by the Company as health risks to its

workforce related to COVID-19 continue and that it had put in place various procedures to mitigate the risk of transmission of the COVID-19 virus on site.

On November 10, 2020, Excelsior provided an operations update, announcing that limited operations in response to the COVID-19 pandemic had been implemented in order to optimize the many aspects of the production wellfield. Highlights of the wellfield optimization program include:

The issue of copper precipitates and other precipitates blocking wells has been solved; the upgrades to the wellfield implemented earlier in the year have proven effective;
Copper grades in the wells that have been consistently operated are in-line with expectations;
These activities have generated sufficient copper in solution to commence operation of the Solvent Extraction-Electrowinning (SX-EW) production facility, which has been turned on;
Copper cathode production was expected to commence within 30 days;
Staffing levels remain reduced and restricted due to the COVID-19 Pandemic. Operations have been conducted in a safe manner with only one COVID-19 case at Gunnison reported. In response, successful contact tracing and isolation measures were implemented without any requirement to shutdown operations;
Expansion of activities to surrounding wells is occurring, with a view to ramping-up to full, nameplate, capacity through 2021; and
It is expected that additional time will be required during this ramp-up to optimize the wells and resolve any challenges as they occur.

Results from current testing confirms that several wells have achieved partial acid breakthrough; these wells have shown no signs of precipitates blocking or restricting recovery flow. Therefore, Excelsior has confirmed that the need to backflush in order to remove precipitates diminishes or goes away entirely once breakthrough has occurred. Wells that have not broken through still require intermittent back flushing using the modified infrastructure, which has proven very effective.

On December 21, 2020, Excelsior announced that first copper cathode production had been achieved at the Gunnison Copper Project in Arizona. The wellfield optimization program has expanded to include more production wells; additional time will be required to bring the entire wellfield into production. First copper cathode sales are anticipated for January 2021.

Copper Offtake Agreement

On March 11, 2020, the Company announced it entered into a purchase and sale agreement with Trafigura Trading LLC for 100% of copper cathode production from the Gunnison Project in 2020 on commercially competitive terms.

Base Shelf Prospectus

On December 9, 2020, Excelsior announced it had filed a preliminary base shelf prospectus (the “ Shelf Prospectus ”) with each of the securities regulatory authorities in each of the Province of Canada (except Quebec). The final Shelf Prospectus was filed on December 22, 2020. The Shelf Prospectus enables Excelsior to make offerings of up to US$30,000,000 of any combination of common shares, debt securities, subscription receipts, units, warrants and share purchase contracts, during the 25-month period that the Shelf Prospectus, including any amendments thereto, remains valid. The nature, size and timing of any such financings (if any) will depend, in part, on Excelsior's assessment of its requirements for funding and general market conditions. Unless otherwise specified in the prospectus supplement relating to a particular offering of securities, the net proceeds from any sale of any securities will be used for working capital requirements and for the development, construction and maintenance of the Company’s mineral properties. The specific

terms of any future offering will be established in a prospectus supplement to the Shelf Prospectus, which supplement will be filed with the applicable Canadian securities regulatory authorities.

Developments Subsequent to December 31, 2020 and Outlook

Sale of First Copper Cathode

On January 28, 2021, Excelsior announced the sale of first copper cathode from the Gunnison Copper Project in Cochise County, Arizona. A total of 90,000 pounds of copper cathode were sold under the off-take agreement with Trafigura Trading LLC (see “Description and General Development of the Business – Three Year History – Year Ended December 31, 2020 – Copper Offtake Agreement” ). Assays confirm that the copper content achieved 99.998%; copper purity is projected to achieve 99.999% (“five-nines copper”) as per the feasibility design, for all future copper harvests.

Extension of Nebari Credit Facility

The Company requested and Nebari provided an extension of the term of the Nebari Credit Facility to March 23, 2022.

Bought Deal Financing

On February 10, 2021, Excelsior announced that it had entered into an agreement with Scotiabank and PI Financial Corp. as joint bookrunners and underwriters (the “ Underwriters ”), pursuant to which the Underwriters have agreed to buy on a bought deal basis 21,100,000 units (the “ Units ”) of the Company, at a price of C$0.95 per Unit for gross proceeds of approximately C$20 million (the “ 2021 Offering ”). Each Unit consists of one common share (each a “ Common Share ”) and one warrant (each a “ 2021 Warrant ”). Each 2021 Warrant is exercisable to acquire a Common Share at an exercise price of C$1.25 for a period of 18 months from the closing of the 2021 Offering.

The Company also granted the Underwriters an option, exercisable at the offering price for a period of 30 days following the closing of the 2021 Offering, to purchase up to an additional 3,165,000 Units to cover over-allotments, if any, and for market stabilization purposes.

On February 11, 2021, Excelsior announced that it had entered into an amending agreement with the Underwriters to increase the size of the 2021 Offering. Pursuant to the revised terms of the offering, the Underwriters have agreed to buy on a bought deal basis 29,000,000 Units of the Company, at a price of C$0.95 per Unit for gross proceeds of approximately C$28 million.

The Company also granted the Underwriters an option, exercisable at the offering price for a period of 30 days following the closing of the 2021 Offering, to purchase up to an additional 4,350,000 Units to cover over-allotments, if any, and for market stabilization purposes.

A prospectus supplement (the “ Prospectus Supplement ”) to the Shelf Prospectus was filed on February 12, 2021 with the securities commissions or securities regulatory authorities in each of the provinces of Canada, excluding Quebec.

On February 22, 2021, Excelsior announced that the 2021 Offering closed and that the Underwriters exercised the over-allotment option in full. The Company issued a total of 33,350,000 Units at a price of C$0.95 per Unit for gross proceeds of C$31,682,500. Each Unit consists of one Common Share and one 2021 Warrant. Each 2021 Warrant is exercisable to acquire a Common Share at an exercise price of C$1.25 until August 22, 2022. The 2021 Warrants are listed for trading on the Toronto Stock Exchange under the symbol MIN.WT.

The net proceeds from the 2021 Offering will be used for working capital requirements and for the development, sustaining capital and maintenance of the Company’s mineral properties.

Merger

On March 1, 2021, the Company completed a merger of its wholly-owned subsidiaries Excelsior Arizona and Excelsior JCM, with Excelsior Arizona as the surviving entity. This merger will not have a material impact on operations and was completed for administrative purposes.

COVID-19

The current outbreak of the novel coronavirus (COVID-19) that was first reported from Wuhan, China, in December 2019, and any future emergence and spread of similar pathogens could have a material adverse effect on global economic conditions which may adversely impact our business and results of operations and the operations of our suppliers, contractors, service providers and the demand for our production. While initially the outbreak was largely concentrated in China and caused significant disruptions to its economy, it has now spread to many other countries and infections have been reported globally.

Worldwide the mineral extraction sector was impacted significantly as national, state, regional and local governments issued public health orders in response to COVID-19, including restricting the movement of people and goods.

Although multiple vaccines have been released and are being administered to the public, there have been coincidental mutations to the virus known as COVID-19 and which have been reported to be more virulent. Should vaccines prove less effective against the new virus strains resulting in a resurgence of COVID-19 during the year, it is anticipated that many governments would again issue public health orders which might include restricting the movement of people and goods. This in turn might impact the Company’s supply chain. Although copper prices have recovered with some subsidence of the global pandemic and the release of vaccines to counter the virus, copper prices could again be negatively impacted should there be a global resurgence of COVID-19. A continuing period of lower prices could significantly affect the Company’s economic potential or intentions with respect to the Gunnison Project.

While the media reports both new strains of the virus and a resurgence in COVID-19 cases globally, as of the date of these financial statements the State of Arizona has no travel restrictions in place. However, the State has previously demonstrated a willingness to issue defensive orders where it sees the need. Any such order that would significantly restrict the movement of people or goods could impact the Company's ability to access its properties and complete exploration, development or production programs in the current year. The Company has considered that there may be a continuation of periodic restrictions on activities until a sufficient proportion of the population has been vaccinated in the fight against COVID-19. As a result, the Company maintains a cautious approach as to the timing of ramping up operations activities.

The longer-term impact of these factors on the Company is not yet determinable, however they may have a material impact on the Company’s financial position, results of operations and cash flows in future periods. In particular, there may be heightened risk of mineral property impairment and liquidity or going concern uncertainty. As a result, impairment indicators for our mineral properties could arise if current conditions persist. We continue to work on revisions to our forecasts and operational plans in light of the continuing situation.

Outlook

Construction of the Gunnison Project was completed as of the end of the year 2019, copper production in solution from the wellfield started, and the Company advanced to the start-up and commissioning phase. Total

project-related capital expenditures for the Gunnison Project were previously forecast at approximately $88,000. Total capitalized expenditures including accruals on the Gunnison Project as of December 31, 2020 were $89,973. The forecast exceedance is the result of capitalizing operating costs to the project during the production ramp up phase.

Excelsior is maintaining a cautious approach and gradually expanding wellfield operations to allow for an operation that minimizes the risks of COVID-19 transmission. Excelsior’s focus continues to be on attaining a sustained production rate of 25 million pounds of copper per year, after which Excelsior will focus on expanding that production rate. The Company anticipates achieving the nameplate production rate of 25 million pounds per annum later in 2021. Achieving this outcome is contingent on managing COVID-19 conditions and successfully implementing many of our wellfield continuous improvement programs.

Significant Acquisitions

The Company has made no significant acquisitions for which disclosure is required under Part 8 of National Instrument 51-102.

NARRATIVE DESCRIPTION OF THE BUSINESS

Summary of the Business

The Company is focused on mining operations at its core asset, the Gunnison Project located in Cochise County, Arizona.

Competitive Conditions

The mineral exploration and mining business is a competitive business. The Company competes with numerous other companies and individuals in the search for and the acquisition of attractive mineral properties. The success of the Company will depend not only on its ability to operate and develop its properties but also on its ability to select and acquire suitable properties or prospects for development or mineral exploration.

The mineral resource industry is intensely competitive in all of its phases, and the Company competes with other mineral resource companies in connection with the acquisition of properties, the recruitment and retention of qualified personnel and contractors, the supply of equipment and, ultimately, customers for any copper that may be produced from the Gunnison Project if it reaches production. Many of the companies the Company competes with have greater financial resources, operational experience and technical facilities than the Company. Consequently, the Company’s future revenue, operations and financial condition could be materially adversely affected by competitive conditions. See also “Risk Factors”.

Employees

The Company had 58 employees as of December 31, 2020.

Environmental Protection

The Company understands the importance of environmental protection. The Company’s activities are subject to extensive federal, state and local laws and regulations governing environmental protection and employee health and safety. The Company is required to obtain government permits and comply with bonding requirements under environmental laws. All phases of the Company’s operations are subject to environmental regulation. These regulations mandate, among other things, the maintenance of water quality standards and land reclamation. They also set forth limitations on the generation, transportation, storage and disposal of solid and hazardous waste. Environmental legislation is evolving in a manner which will require stricter standards and enforcement, increased fines and penalties for non-compliance, and more stringent environmental

assessments of proposed projects. For further information related to environmental protection see “Mineral Properties – Gunnison Project – Mining Operations – Environmental and Permitting.”

The environmental protection requirements affect the financial condition and operational performance and earnings of the Company as a result of the capital expenditures and operating costs needed to meet or exceed these requirements. These expenditures and costs may also have an impact on the competitive position of the Company to the extent that its competitors are subject to different requirements in other governmental jurisdictions. To date the effect of these requirements has been limited due to the pre-construction stage of the Company, but they are expected to have a larger effect in future years as the Company commences the construction of the Gunnison Project and moves toward production. There is no assurance that future changes in environmental regulation, if any, will not adversely affect the Company’s operations.

Social and Environmental Policies

The Company places great emphasis on providing a safe and secure working environment for all of its employees and contractors, and it recognizes the importance of operating in a sustainable manner.

The Company’s Code of Business Conduct and Ethics (“Code of Conduct”) is the policy that sets out the standards which guide the conduct of the Company’s business and the behaviour of its employees, officers and our Board of Directors. The Code of Conduct, amongst other things, sets out standards in areas relating to:

Promotion and provision of a work environment in which individuals are treated with respect, provided with equal opportunity and is free of all forms of discrimination;
Ethical business conduct and legal compliance, including without limitation prohibition against accepting or offering bribes; and
Commitment to health and safety in our business operations, and the identification, elimination or control of workplace hazards.

The Company’s commitment to safety is defined in its Safety Handbook. The Company is committed to developing and maintaining programs that meet and where practical, exceed the requirements of the law. The Company’s ultimate goal is zero accidents and to earn the reputation of being a safety conscious operator.

MINERAL PROPERTIES

General

The Company’s only material mineral property is the Gunnison Project.

Gunnison Project

The following represents the summary of the Technical Report dated effective December 17, 2016 prepared by Richard Zimmerman, SME-RM; Michael M. Gustin, P.G., Ph.D.; Dr. Ronald J. Roman, P.E., D.Sc.; Neil Prenn, MMSA-QPM; R. Douglas Bartlett, R.G.; and Thomas Drielick, P.E. Unless specifically noted otherwise, the following disclosure regarding the Gunnison Project has been prepared under the authority and supervision and with the consent of the authors, each a “qualified person” within the meaning of NI 43101. The full Technical Report is incorporated by reference into this AIF and is available under Excelsior’s corporate profile on SEDAR at www.sedar.com.

Summary

M3 Engineering & Technology Corporation (“ M3 ”) was commissioned by Excelsior to prepare the Feasibility Study in accordance with the Canadian NI 43-101, for the Gunnison Project in Cochise County, Arizona, USA. The Project utilizes in situ recovery (“ ISR ”) methods to leach copper from a buried copper oxide deposit and extract the copper by conventional solvent extraction-electrowinning (“ SX-EW ”) technology. The ISR process involves injecting leach solutions acidified with sulfuric acid into the oxidized mineralization to get soluble copper into solution. Recovery wells pump the copper-bearing pregnant leach solution (“ PLS ”) to the surface for copper recovery by SX-EW into salable copper cathodes.

The Project envisages development in three production “stages” with capacities of 25 million pounds per annum (“ mppa ”) in Stage 1, 75 mppa in Stage 2, and 125 mppa in Stage 3. The stages to ramp up production were meant to minimize capital at risk until the ISR process at the Gunnison Project is better understood. For Stage 1 operations, Excelsior will use the neighboring JCM that has a functional 25 mppa SX-EW plant north of the Gunnison Project wellfield on the north side of Interstate 10 that it purchased in 2015.

In the current mine plan, Stage 2 production will commence in Year 4 of the mine life and will utilize the JCM SX-EW plant, as well as a new 50 mppa Gunnison SX-EW plant which will be located on the south side of Interstate 10, next to the Gunnison wellfield. Stage 3 production will commence in Year 7 of the mine life by doubling the size of the Gunnison SX-EW plant.

The Gunnison Project is located about 62 miles east of Tucson, Arizona on the southeastern flank of the Little Dragoon Mountains in the Cochise Mining District. The property is within the copper porphyry belt of Arizona. The Gunnison Project contains copper oxide and sulfide mineralization with associated molybdenum, in potentially economic concentrations. The material deposit within the Project area is the North Star (formerly known as I-10) deposit.

Excelsior’s method of extraction will be ISR of copper in oxidized, mineralized bedrock that lies 300 feet to 800 feet beneath of alluvial basin fill. The basin fill is typically above the water table and most of the oxidized mineralization is below the water table. The North Star copper deposit shows significant fracturing and jointing of the host rocks resulting in broken ground that is below the water table (saturated zone) and permeable. The copper silicates and oxides occur preferentially as coatings on the fracture planes and as veinlets or matrix fill to the broken fragments. This should result in preferential exposure of the copper minerals to leaching solution, thus reducing the amount of acid consumed by the un-exposed gangue rocks. The above features, combined with the large size of the deposit, suggest ISR is a viable approach to mining.

The techniques for ISR have evolved to the point where it is considered a controllable, safe, and environmentally friendly mining method with low capital and operating costs. The mining method has been demonstrated, with over 90% of uranium production in the United States coming from ISR operations. In addition to uranium, the technique has been successfully applied to the mining of oxide and sulfide copper, gold, sulfur, salt, phosphate and boron.

ISR is a closed-loop mining system, where ground water from the aquifer is utilized as the transport medium. Minerals or metals are dissolved in situ within the host formation using an appropriate lixiviant. Wells constructed in a distinct pattern are used to deliver (inject) the lixiviant to the ore horizon as it is drawn toward other (recovery) wells in the pattern, resulting in contact with the mineralization. The recovery wells are equipped with pumps that deliver the pregnant leach solution (PLS), which is the lixiviant plus dissolved metals, to the surface for processing. After processing, the solution is recycled to the wellfield to continue the leaching cycle, making ISR a continuous mining operation.

Several ISR operations for copper have operated or been permitted in Arizona including Miami (BHP-Billiton), San Manuel (BHP-Billiton), Silver Bell (ASARCO), Old Reliable (Ranchers Exploration), Santa Cruz (ASARCO et al.), Florence (BHP-Billiton), and Safford area (Kennecott Copper). Considerable expertise in copper oxide ISR mining is available in Arizona and elsewhere in the USA.

Excelsior selected M3 and other respected third-party consultants to prepare mine plans, resources/reserve estimates, process plant designs, and to complete environmental studies and cost estimates used for this report. All consultants have the capability to support the Project, as required and within the confines of their expertise. The costs are based on fourth quarter 2016 US dollars.

Key Data

The key results of the Feasibility Study are as follows.

The average annual Stage 3 production is projected to be approximately 125 million pounds of copper. Total life of operation production is projected at approximately 2,165 million pounds of copper.
The Project currently has 873 million short tons of measured and indicated oxide and transitional mineral resources (0.29% Total Copper Grade) at a 0.05% Total Copper cutoff grade, as well as 187 million short tons of inferred mineral resources (0.17% Total Copper Grade).
The Project currently has a diluted mineral reserve of 782 million short tons of probable mineral reserves (0.29% Total Copper Grade).
ISR is anticipated to recover 48.4% of the total copper with an average “sweep efficiency” of 74%.
The average life-of-mine direct operating cost is estimated to be $0.655 per pound of copper for the Base Case, which includes building a sulfuric acid plant that commences operation in Year 7 (Stage 3). The average life-of-mine direct operating cost for the Alternative Case (No acid plant) is $0.97 per pound of copper.
The estimated initial capital cost is $46.9 million.
The total life-of-operation sustaining capital cost for the Base Case is estimated to be $742 million while the total life-of-operation sustaining capital cost for the Alternative Case is $661 million.
The total cost for reclamation and closure is estimated to be $51.9 million and averages $0.024 per pound of copper recovered.
The economic analysis for the Base Case before taxes indicates an Internal Rate of Return (“ IRR ”) of 48% and a payback period of 4.6 years. Based on a copper price of $2.75 per pound, the Net Present Value (“ NPV ”) before taxes is $1,173 million at a 7.5% discount rate.
The economic analysis for the Base Case after taxes indicates that the Project has an IRR of 40.0% with a payback period of 6.5 years. The NPV after taxes is $807 million at a 7.5% discount rate.

Property Description and Location

The Project is located in Cochise County, Arizona, approximately 62 miles east of Tucson and 1.5 miles southeast of the historic Johnson Camp mining district. Figure 1-1 is a general location map and property location near the US Interstate 10 (I-10) freeway. Total area is approximately 9,560 acres (3,869 hectares).

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Figure 1-1: Project Location Map, North and South Star Deposits

The Project is held by Excelsior through is wholly-owned subsidiaries Excelsior Mining Arizona, Inc. (“ Excelsior Arizona ”) and Excelsior Mining JCM, Inc. (“ Excelsior JCM ”). Acquisition of all mineral interest from the James L. Sullivan Trust was completed in January of 2015. These assets represent, among other things, the mineral rights to the North Star and South Star Copper deposits. Additionally, in December 2015 Excelsior purchased all assets of Nord Resources Corporation, as they relate to the JCM, through a courtappointed receiver.

Accessibility, Climate, Local Resources, Infrastructure and Physiography

The Project is located in a sparsely populated, flat to slightly undulating ranching and mining area about 62 road miles east of Tucson, Arizona. The Tucson metropolitan area is a major population center (approximately 1,000,000 persons) with a major airport and transportation hub and well developed infrastructure and services that support the surrounding copper mining and processing industry. The towns of Benson and Willcox are nearby and combined with Tucson can supply sufficient skilled labor for the Project.

Access to the Project is via the I-10 freeway from Tucson and Benson to the west or Willcox to the east. The North Star deposit can be accessed via good quality dirt roads heading approximately 1 mile east from the south side of “The Thing” travel center and roadside attraction on the Johnson Road exit from I-10.

The elevation on the property ranges from 4,600 to 4,900 feet above mean sea level in the eastern Basin and Range physiographic province of southeastern Arizona. The climate varies with elevation, but in general the summers are hot and dry and winters are mild.

Vegetation on the property is typical of the upper Sonoran Desert and includes bunchgrasses, yucca, mesquite, and cacti.

History

There is no direct mining history of the North Star deposit; however, the district has seen considerable copper, zinc, silver and tungsten mining beginning in the 1880’s and extending to the present day. Modern mining and leaching operations at the Johnson Camp Mine, began in the 1970s by Cyprus Minerals. Successor owners and operators include Arimetco, North Star, Summo Minerals, and Nord Resources Corporation. Nord mined fresh material until mid-2010 and maintained leaching operations until late 2015, when the property was purchased by Excelsior.

In 1970, a division of the Superior Oil Company (“ Superior ”) joint ventured into the northern half of the North Star deposit with Cyprus and the private owners. During the early 1970’s, Superior did most of the drilling and limited metallurgical testing on North Star and by early 1974 had defined several million tons of low-grade acid-soluble copper mineralization.

Geological Setting and Mineralization

There are two oxide copper deposits controlled by Excelsior, North Star and South Star, both situated in the Mexican Highland section of the Basin and Range physiographic province. The province is characterized by fault-bounded mountains, typically with large igneous intrusives at their cores, separated by deep basins filled with Tertiary and Quaternary gravels.

The Gunnison Project (North Star) lies on the eastern edge of the Little Dragoon Mountains. The ages of the rocks range from 1.4 billion-year-old Pinal Group schists to recent Holocene sediments. The southern portion of the Little Dragoon Mountains consists predominantly of the Tertiary Texas Canyon Quartz Monzonite whereas the Pinal Group schists and the Paleozoic sediments that host the regional copper mineralization dominate the northern half.

Copper sulfide mineralization has formed preferentially in the proximal (higher metamorphic grade) skarn facies, particularly along stratigraphic units such as the Abrigo and Martin Formations near the contact with the quartz monzonite and within structurally complex zones. Primary mineralization occurs as stringers and veinlets of chalcopyrite and bornite. Primary (unoxidized) mineralization remains “open” (undetermined limits) at depth and to the north, south, and east. Oxidation of the mineralization occurs to a depth of approximately 1,600 feet, resulting in the formation of dominantly chrysocolla and tenorite with minor copper oxides and secondary chalcocite. The bulk of the copper oxide mineralization occurs as chrysocolla, which has formed as coatings on rock fractures and as vein fill. The remainder of the oxide mineralization occurs as replacement patches and disseminations.

Deposit Types

The North Star deposit is a classic copper-bearing, skarn-type deposit. Skarn deposits range in size from a few million to 500 million tons and are globally significant, particularly in the American Cordillera. The North Star deposit is large, being at the upper end of the range of size for skarn deposits, and is associated with a mineralized porphyry copper system that has been virtually unexplored.

Exploration

Since North Star’s discovery, numerous companies have explored the area. During this time period, extensive drilling and assaying, magnetic and IP geophysical surveys, metallurgical testing, hydrological studies, ISR tests, and preliminary mine designs and evaluations have occurred. The focus since the 1970’s has been to utilize ISR or a combination of ISR and open pits as a potential mining strategy.

Stephen Twyerould first became involved with the Gunnison Project in mid-2005 and AzTech (Excelsior precursor) became involved in mid-2006. Since that time, significant work has been completed such as cataloguing, reviewing and compiling high-quality historical data spanning over thirty years of investigations by Superior Oil and Gas, Cyprus, Quintana, CF&I, Magma Copper Corporation, Phelps Dodge Corporation, and James Sullivan. Excelsior conducted detailed ground magnetics over the exploration targets in June 2011.

Excelsior initiated a re-logging program in December 2010 that was completed in the third quarter of 2011. In addition, a re-assaying program began in March 2011 during which all of the Magma holes were re-assayed. In May 2011, a re-assay program was initiated for the Quintana Minerals holes (DC, S, and T series) to include sequential copper analyses for acid-soluble copper (“ ASCu ”). Previous results only included total copper (“ TCu ”) assays.

Drilling

The North Star deposit drillhole database includes 88 historical drillholes that were completed by several companies. These holes extend to a depth of approximately 2,450 ft below the surface at North Star and cover an area of approximately 310 acres, with additional drilling extending beyond this area. There is a slightly higher density of drilling along the central axis of the North Star deposit. The 88 holes drilled by previous owners include 5,585 assays for TCu and 2,754 assays for acid soluble copper as well as other assays for molybdenum, gold, silver, and tungsten.

Between 2010 and 2015, fifty-four diamond core holes have been drilled by Excelsior for a total of 78,615 feet of drilling. Fifteen of these holes were for metallurgical samples and the rest were drilled for resource definition or exploration purposes.

Sample Preparation, Analysis and Security

All of the drilling, sample preparation and analysis of the samples presented in this report was under the control of the previous property owners.

The laboratory sample preparation and analysis procedures used by the previous owners of the deposits are unknown; however, major commercial laboratories using best practices at the time completed the majority of analyses.

The data, information, samples and core from the deposits have been under the control and security of AzTech Minerals since November 2006 and then Excelsior since October 2010. The original Information and samples are stored at the Sullivan’s core storage facility in Casa Grande, with numerous copies held by Excelsior at its Phoenix, Arizona office. It is the opinion of Mine Development Associates (“ MDA ”), the reviewer of the assay data for this report, that the sample procedures, processes and security are reasonable and adequate.

Data Verification

The verification of location and assay data in the drillhole database covers historic drilling and the verification of the data collected by Excelsior. No significant issues have been identified with respect to the data provided by Excelsior’s quality assurance/quality control (“ QA/QC ”) programs. QA/QC data are not available for the historical drilling programs at North Star, but Excelsior analyses dominate the assays used directly in the estimation of the mineral resources. Additionally, most of the historical data were generated by well-known

mining companies, and the Excelsior drill data are generally consistent with the results generated by the historical companies.

Assaying and QA/QC procedures were industry standard. The TCu and ASCu assays used to estimate grades in the North Star model are acceptable for estimating mineral resources, based on MDA’s review of the available data for repeat, check, duplicate, standard and blank assays, and on paired comparisons of assay data from different drilling campaigns.

Mineral Processing and Metallurgical Testing

There are two fundamental parameters to estimate overall copper recovery and acid consumption for a commercial- scale ISR operation: metallurgical recovery and sweep efficiency. In essence:

Metallurgical recovery determines the amount and rate at which the copper dissolves from, and acid is consumed by, the rocks when contacted by the leach solution.
Sweep efficiency determines how much of the copper in the ground will be effectively contacted by leach solution during the mining process.

In addition to historic testing, Excelsior has commissioned several rounds of varied metallurgical testing from as early as 2011 through 2015 that were intended to demonstrate the copper recovery and acid consumption which could be expected in an ISR operation for the Gunnison Project. The most recent testing was conducted at Mineral Advisory Group Research & Development, LLC (“ MAG ”) in Tucson, Arizona under the direction and control of Dr. Ronald J. Roman, P.E. of Leach, Inc., Tucson, Arizona. The primary objectives of this most recent group of tests were to:

Determine the amount of copper that could be leached from the different ore types,
Determine the relationship between the percentage of copper leached and the acid consumption for the different ore types, and
Establish ISR metallurgical parameters at a feasibility level of confidence.

In addition to these tests, several rinsing tests were conducted for the purpose of determining a rinsing protocol to be employed after a block of ore had been leached by the ISR technique.

New Column Testwork

Since the 2014 PFS, two additional test programs have been completed. In the first of these 19 modified column tests were run. The purpose of the new column testing was to determine how different ore samples would respond to the same leaching parameters to determine the variability of the ore with respect to the leachability.

Column tests were run on 51 to 52 kg of material crushed to minus 1 inch using 15 gram per liter (“ gpl ”) sulfuric acid solution for up to 80 days. Separate columns were run for Lower Abrigo, Middle Abrigo, Upper Abrigo, and combined Martin/Escabrosa formations. The results show that the recovery of acid soluble copper ranges from 65% to +90% but was dependent on rock type with Lower Abrigo formation having the highest and shortest duration leach cycle and the Martin/Escabrosa column tests having the lowest recovery over the longest period. Nearly all of the column leach plots of recovery vs time had positive slopes at the end of leaching, indicating the leaching process had not completed in 80 days. As with prior test work, additional copper was recovered from the solubilization of minerals which do not report to the traditional ambient acidsoluble copper assay. These minerals include slowly soluble oxide copper minerals and transitional sulfides. Therefore the conventional “acid-soluble copper assay” gives a good, if not conservative, approximation of the amount of copper which can be leached from the ore in the presence of a weak sulfuric acid solution.

Core Tray Tests

The second new test program termed “Core Tray” tests was intended to more closely simulate the in-situ recovery process than the modified column tests. In the Core Tray test pieces of core were mounted in epoxy in a tray with only the natural fracture surface exposed to the leach solution flowing across the top through the core tray.

Initially, the leach solution contained approximately 1.0 gpl free acid. The free acid was increased in steps with time until it reached 15 gpl free acid. The data collected were recorded and an estimate of the following information about the response of the sample to leaching made:

Incremental and cumulative recoverable copper, lbs/100 ft[2] of fracture surface
Incremental and cumulative recoverable copper, wt%
Incremental and cumulative gangue acid consumption, lbs/100 ft[2 ] of fracture surface
Incremental and cumulative net acid consumption, grams of acid/gram of copper leached
From these results the following were determined:
Recovery/time relationship
Acid Consumption/recovery relationship

The results of the Core Tray tests were stratified by rock type. Figure 1-2 is an example of the results for the Upper Abrigo formation. For all formations the time vs recovery curves still have positive slopes during the test times of up to 200 days. Figure 1-3 is the Core Tray acid consumption data for the Upper Abrigo formation that indicates that the acid consumption curve steepens with recovery as expected.

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Figure 1-2: Core Tray Time vs Copper Recovery Results for Upper Abrigo Formation

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Figure 1-3: Core Tray Copper Recovery vs Acid Consumption Results for Upper Abrigo Formation

Sweep efficiency (or mining efficiency) for the North Star deposit is considered a function of fracture intensity. The most highly fractured rocks where the majority of pieces of core are 4" or less are considered to have a sweep efficiency of 100%. In contrast, rocks that exhibit very weak fracturing are considered to have a low sweep efficiency of approximately 20%. The rocks at North Star exhibit a continuum of fracture intensities from very low (Fracture Intensity value of 1), to very high (Fracture Intensity value of 5), as determined by geological logging, geophysics and three-dimensional interpretation and modeling. To reflect this continuum, a polynomial algorithm was used to derive a predictive relationship between sweep efficiency and fracture intensity of the rocks.

Combining sweep efficiency with metallurgical test results and modelling of copper recovery it is possible to estimate cumulative copper recovery and acid consumption over a period of time for a 5-spot well pattern. The results of such calculations are shown in Table 1-1 below. The overall effect is for a weighted average total copper recovery of approximately 48% (acid soluble recovery of 74%).

Table 1-1: Predictive Model for Sweep Efficiency Factored, Cumulative Acid Soluble Copper Recovery and Acid Consumption for a 5-Spot Well Field Pattern

Cumulative Acid Soluble Cu Recovery (%)	Year 1	Year 2	Year 3	Year 4
Martin	10.2	48.9	66.1	72.8
Upper Abrigo	26.2	65.1	72.9	74.5
Middle Abrigo	25.4	56.0	67.9	75.0
Lower Abrigo	35.5	62.2	70.4	74.6
Bolsa, TQM, other*	35.5	62.2	70.3	74.5
Weighted average	21.0	56.2	68.8	73.9

Cumulative Acid Consumption (lb/lb)*	Year 1	Year 2	Year 3	Year 4
Martin	17.5	7.5	8.1	9.7
Upper Abrigo	6.6	5.3	6.8	9.0
Middle Abrigo	7.4	6.8	8.2	10.0
Lower Abrigo	3.7	4.3	5.4	6.9
Bolsa, TQM, other*	3.7	4.3	5.4	6.9
Weighted average	8.2	6.2	7.4	9.1

Mineral Resource Estimate

The North Star deposit mineral resources reported by MDA have been updated to include resources on lands newly acquired by Excelsior with the purchase of the Johnson Camp property. Table 1-2 is a summary of the oxide, transitional, and sulfide mineral resources tabulated at a total copper cutoff of 0.05% for oxide and transitional and 0.30% for sulfide. Table 1-3 is a summary of the sulfide portion of the deposit at a 0.50% TCu cutoff. Measured and indicated oxide and transition mineral resources are inclusive of mineral reserves.

Table 1-2: North Star Oxide, Transition, and Sulfide Mineral Resource Summary Effective October 1, 2016

	Short Tons	Total Cu	Contained Copper
Resource Category	(millions)	(%)	(million pounds)

Measured	200.7	0.36	1,439
Indicated	710.8	0.27	3,875
Measured + Indicated	911.6	0.29	5,315
Inferred	240.9	0.22	1,070
0.05% TCu cutoff for oxide and transitional, 0.30% TCu cutoff for sulfide

Table 1-3: North Star Sulfide Mineral Resource Summary Effective October 1, 2016

	Short Tons	Total Cu	Contained Copper
Resource Category	(millions)	(%)	(million pounds)
Measured	0.2	0.55	2
Indicated	6.3	0.6	76
Measured + Indicated	6.5	0.6	78
Inferred	5.3	0.58	62
0.50% TCu cutoff

Mineral Reserve Estimate

The mineral resource estimate discussed in Section 14 of the Technical Report is used to estimate the probable mineral reserve estimate for the North Star deposit. Table 1-4 shows the diluted Probable mineral reserve estimate as defined for the FS. The mineral reserves are in the Probable category. The estimate includes material from the measured and indicated categories of the mineral resource and excludes inferred mineral resources. It does not include material from the sulfide zone.

Table 1-4: Probable Diluted Reserve Estimate (October 2016)

Short Tons	782,153,183
TCu Grade (%)	0.29
TCu Contained Copper (lbs)	4,505,267,997
Average Total Copper Recovery (%)	48.4
Recoverable Copper (lbs)	2,179,489,338
*Probable reserves were defined from measured and indicated resources. Inferred resources were not converted into reserves.

The Probable mineral reserve estimate summary prepared for the FS was created using data and input from MDA and Excelsior. It is based on MDA’s resource estimate detailed in Section 14 of the Technical Report. It assumes the use of ISR as a mining method, which requires a wellfield (injection and recovery wells) and pumps pregnant leach solution to an SX-EW plant to recover the copper. The boundaries of the Probable mineral reserve were defined using economic parameters and then further modified to take into account lost production under the freeway and along some lease boundaries. Excelsior developed a wellfield / production schedule for the Project, and the mineral reserve estimate is the sum of the production schedule, which is discussed in Section 16 of the Technical Report.

Mining Method

Excelsior proposes to use the ISR method to extract copper from oxide mineralization located within the North Star Deposit (see location map on Figure 1-1). The ISR mining method was based on the fractured nature of the host rock, the presence of water-saturated joints and fractures within the ore body, copper mineralization that preferentially occurs along fracture surfaces, the ability to operate in the vicinity of Interstate 10, and to avoid the challenges of open pit mining in an area with alluvium overburden thickness ranging from approximately 300 feet to 800 feet.

The forecasted copper production for the Gunnison Project commences with an initial stage of 25 million pounds per annum (mppa) from Years 1 through 3, followed by a second stage of production of 75 mppa in Years 4 through 6, and followed a third stage reaching 125 mppa from Year 7 through Year 20 with a decline in production beginning in Year 21 through the end of the mine life in Year 24. The total amount of copper production forecast over the 24-year LOM is approximately 2,165 million pounds. The following inputs and assumptions were used to generate the copper extraction forecast:

Key physical parameters from MDA’s 100 foot x 50 foot resource block model such as rock type, specific gravity of each rock type, total copper percentage and acid soluble copper percentage, fracture intensity, ore thickness, water table elevation, ore greater than 0.05% total copper, and lease boundaries (see Section 14 of the Technical Report for details);

Incremental acid soluble copper recovery curves over a 4 year recovery period and recovery factor (as discussed in Section 13.3 of the Technical Report); and
Recovery well production rates described in Section 16.4.3 of the Technical Report.

ISR process injects a barren leach solution (“ lixiviant ”) with weak sulfuric acid into the ore body using a series of injection wells. The acidified solution dissolves oxide copper minerals as it migrates through the joints and fractures within the mineralized bedrock. Recovery wells surrounding each injection well extract copperbearing pregnant leach solution (“ PLS ”) and combine to form the feed solution for the SX-EW process.

The SX-EW facility is designed to recover copper from PLS at a copper feed grade of 1.63 gram per liter (“ gpl ”) (1.52 gpl net copper grade) to produce cathode-quality copper with 99.99% purity. The anticipated PLS flow rates are 3,800 gallons per minute (“ gpm ”) for Stage 1, 11,500 gpm for Stage 2, and 19,500 gpm for Stage 3. The process solutions are piped to and from the SX-EW plants in high density polyethylene (“ HDPE ”) piping. The process consists of the following elements (schematic representation in Figure 1-4):

ISR wellfield
Wellfield and drilling services building
Lined PLS and raffinate ponds
Solvent Extraction plant
Tank Farm for handling process liquids;
Electrowinning Tankhouse equipped with an Automatic Stripping Machine
Electrical substation
Sulfuric Acid Receiving/Storage
Administration offices, Security Building, and a Change House
Plant Warehouse, Laboratory, and Plant Maintenance buildings
Water treatment plant with a Clean Water Pond, Evaporation Ponds, and Solids Impoundments

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Figure 1-4: Recovery Process

Depleted portions of the mineralized zone are rinsed by injecting non-acidic (clean) water to flush out the leach solution and reduce the metals and other constituents to acceptable concentrations. A block of mineralization is considered depleted when the copper grade of the recovered PLS falls below an economic cut off. The rinsing process consists of a three-stage process consisting of an early rinse, rest period, and late rinse. Early rinsing flushes and dilutes the PLS remaining in the formation.

At a certain level of dilution, typically 90 percent, the wellfield is shut in allowing the intrinsic neutralization capacity of the formation to neutralize the acid in the diluted solution. The final stage of rinsing flushes out the neutralized solution until all regulated constituents are below stipulated concentrations. Injection and recovery wells are abandoned by grout injection from the bottom of the well when wellfield closure criteria have been satisfied.

Production wells will be designed to meet Underground Injection Control Class III requirements and will be constructed in accordance with the guidelines of ADEQ’s Mining BADCT Guidance Manual. Boreholes will be drilled using air rotary, direct mud rotary, reverse circulation mud rotary, or casing advance drilling methods. Borehole diameters will be sufficient to allow for installation of casing that will accommodate the pumps. The cased portions of the boreholes will be 12-inch nominal (small diameter injection/recovery wells and hydraulic control wells), 15-inch nominal (large diameter injection/recovery wells), and 10-inch nominal (observation and POC wells). The open borehole sections within bedrock will be 5 and 7 inches in nominal diameter. Well screen may be used if the borehole is unstable. The outer annulus of the cased portions of Class III wells will be grouted to 100 feet above the basin fill/bedrock contact (or static groundwater level, whichever is shallower). The ISR operations do not require hydraulic fracturing of the mineralized formation.

Water Treatment Plant

The water treatment plant (“ WTP ”) is planned for construction in Year 6 and 7, when the earliest producing wells are depleted and wellfield rinsing begins. The WTP is designed to provide treatment for mine-influenced water (“ MIW ”) primarily composed of raffinate bleed, wellfield conditioning return, and rinse water return from the ISR recovery wellfield. The WTP is conceptually designed with a capacity of approximately 1,600 gpm. Rinse water, wellfield conditioning return, and excess raffinate produced in Years 1 through 7 will be reused in the copper recovery process, with any excess going directly to the evaporation ponds.

Acid Generation Plant

Producing sulfuric acid (H2SO4) onsite from molten sulfur was evaluated against purchasing sulfuric acid delivered to site. The analysis is based on a long term delivered contract at a cost of $125 per (short) ton of sulfuric acid. The alternative of purchasing molten sulfur on a long term contract, also at $125 per ton and converting the sulfur to sulfuric acid onsite was determined to be more economical. Waste heat from the acid making process produces steam as a by-product to cogenerate electrical power which will be credited to the acid facility operating costs thereby lowering the effective cost of sulfuric acid to $46 per ton. Facilities required for onsite acid generation include molten sulfur rail unloading and storage facilities, sulfur burning plant, acid absorption area, steam turbine generation plant, water treatment, acid storage tanks, and cooling towers. The sulfuric acid plant is scheduled to be built in Year 6 as part of the Stage 3 expansion.

The results of the evaluation indicate that the IRR between purchasing acid and making acid onsite are the same but the increase in Net Present Value clearly favors making sulfuric acid onsite. For this reason, the sulfuric acid plant is considered as a component of the Base Case. Omitting the acid plant is termed the Alternative Case.

Acid requirements for the Project are approximately 9 pounds of acid per pound of copper produced. The proposed acid plant is a double-contact, double-absorption acid plant which will provide the highest conversion rate and lowest emission of sulfur dioxide gas, less than 500 parts per million by volume. The sulfur-burning sulfuric acid plant is sized for 1,625 tons per day (100% H2SO4), with the product acid strength of 98.5% H2SO4. Allowing for 2 weeks down time each year for maintenance, the acid plant operates at an average of 85% capacity.

Project Infrastructure

The primary access to the site will be from Interstate 10 via the Johnson Road exit between Benson and Willcox, Arizona. The mine access road to the Johnson Camp side of the property is approximately one mile long to the north. A new, asphalt paved access road to the Gunnison wellfield and plant site will head south and east from the Interstate exit for a distance of one mile.

The Johnson Camp mine, currently in care and maintenance mode, has existing plant facilities, ponds and infrastructure in operable condition. This site will be used for Stage 1, 2, and 3 production at its rated capacity of 25 mppa.

The Gunnison SX-EW plant will be constructed for Stage 2 production in Year 3 for operation in Year 4 at an initial rate of 50 mppa. The electrowinning building (tankhouse) will be a steel building with corrugated metal roofing and siding. It will contain 80 electrowinning cells on one end of the building and the Automatic Stripping Machine and the cathode handling equipment are on the other, with a paved cathode storage area outdoors. For Stage 3 production, 80 EW cells will be added to the opposite side of the building, mirroring the first 80 cells.

The Gunnison Tank Farm will be built for Stage 2 and have tankage added in Stage 3. It is uncovered and located downhill from the SX area and the tankhouse to facilitate gravity drainage of solutions to the Tank Farm. The Tank Farm has a concrete containment that drains to a sump with an oil-water separator to return spilled liquid to the proper location for recycling. There is a Plant Runoff Pond located downstream of the Tank Farm to capture any surface flows in the event of an upset condition at the plant.

Ancillary facilities needed to support the Gunnison Project include buildings, ponds, tanks, and trenches. Ancillary buildings include an Administration Building, Warehouse, Plant Maintenance building, Change House, Security Building (gatehouse), Wellfield Maintenance Building, Water Treatment Plant, and Sulfuric Acid Plant-Cogeneration complex. Other facilities will include ponds, and tanks. The Gunnison Project will use the existing assay lab located at the Johnson Camp mine.

Power for the facility will be taken from an existing 69 kilovolt power line feeding the existing Johnson Camp Mine located on the north side of I-10. The existing power line is owned by the Sulfur Springs Valley Electric Cooperative Inc. located in Willcox, Arizona. The power line approaches the plant site along the eastern boundary of Section 31 shown on Figure 4-2. A tap will be taken from the existing power line and a short, 0.3-mile power line will be constructed to connect to the plant main electrical substation, located near the EW building.

Fresh well water will be taken from existing wells and mine shafts on the Johnson Camp property and pumped to an existing 500,000 gallon fresh water/fire water storage tank located on Water Tank Hill at the JCM site. The lower 300,000 gallons in the storage tank will be reserved for fire water. Process water for plant use will be taken from the storage tank above this reserve level for fire suppression. The JCM site has an existing potable water system. The Gunnison site will be served by an additional 7,000 gallon potable water tank and chlorination system, which will use a water supply well to be constructed east of the operation during Stage 2 development.

Market Studies and Contracts

No market study has been conducted for the Project and there are no contracts in place related to metal sales at the time of this report. No direct marketing has been done for the copper cathode that would potentially be produced at the Project and therefore no off-take agreements exist. These options will be reviewed in detail when the Project proceeds. The Project will produce high-purity copper (LME Grade A) cathodes which are suitable for use without further refining.

The Feasibility Study has selected $2.75/lb copper as the price for the Base Case, which is consistent with the price used in the 2016 PFS Update. It also agrees with the three-year trailing (historic) average for copper price, which was $2.62/lb at the time the Feasibility Study was prepared.

Environmental and Permitting

Environmental Studies

Anthropological and floral and faunal studies were carried out by Excelsior in 2010 over the wellfield area. There is no potential for U.S. Fish and Wildlife Service endangered, threatened, proposed, and candidate species (special- status species) to occur in the study area.

An archaeological study was conducted that showed no cultural resource sites in the mining area. Further archeological and floral/faunal studies were conducted by WestLand Resources for areas covered by infrastructure such as the SX-EW plant, evaporation ponds, sulfuric acid plant and railway facilities. No cultural resource sites were identified.

Groundwater Modeling

A groundwater model was constructed by Clear Creek Associates to cover the greater Gunnison project area of 87.8 square miles in support of the Aquifer Protection Permit and Underground Injection Control Permit applications. The model was constructed using a number of extensive datasets created by Excelsior, including a detailed mapping of fracture intensity, which is key to groundwater flow in the Project area.

The model demonstrates that control of mining solutions can be maintained with hydraulic control wells located around the wellfield. Predicted pumping rates for hydraulic control presently range from a total of 15 gpm to approximately 200 gpm in later years. Water produced during hydraulic control will be used in the process, recycled or evaporated.

Water Management

The Project’s water management plan was designed to make the most efficient use of water resources and eliminate discharges. During Stage 1 of the Gunnison Project, existing lined ponds at JCM will be used. As production increases and Stage 2 and Stage 3 facilities are constructed south of Interstate 10, new solution and water management ponds will be constructed to support the project. These include: the PLS pond, Raffinate pond, Plant Runoff pond, Clean Water pond, Recycled Water pond, Evaporation ponds, and Solids Impoundments, which contain the precipitate from the Water Treatment Plant. With the exception of the Plant Runoff and Clean Water ponds, the ponds will be constructed with a double liner and a leak detection and recovery system between the liners according to prescriptive BADCT design.

Excess solutions will initially be routed to evaporation ponds where mechanical evaporators will be installed. During later stages of the Project, when the Water Treatment Plant is in operation, approximately 80% of the influent will be treated for reuse in the process or for rinsing, and it will report to the Clean Water Pond. The solids from the WTP process will be pumped to the Solids Impoundments as precipitated solids and the concentrate brine and filter backwash from the WTP will be pumped to the evaporation ponds. Groundwater produced from hydraulic control pumping will be conveyed to the Clean Water Pond or, if impacted by PLS, to the Evaporation Pond.

Geochemical Modeling

Geochemical modeling of raffinate and rinsing solutions indicates that the following 3-step closure strategy will result in concentrations of regulated constituents below Aquifer Water Quality Standards:

Step 1: Rinsing 3 pore volumes
Step 2: A rest phase (approximately 200 days or more) until near neutral pH conditions are attained
Step 3: Rinsing at least 2 additional pore volumes
Hydraulic control is maintained during rinsing

Community Relations

Excelsior has developed a broad-based community relations and stakeholder outreach program in support of the Gunnison Project. Elements of this program include:

Targeted stakeholder outreach to government, community, business, non-profit and special interest groups, and leaders at the local, county and state level.
Development of community relation and communication tools and resources (e.g. Project website, Project e- newsletter, and presentation materials);
Public open houses and technical briefings when appropriate.

Crucial elements of Excelsior’s community relations efforts will involve ensuring consistent and ongoing communication with all stakeholders, and providing opportunities for meaningful two-way dialogue and active public involvement. Excelsior will focus on ensuring the public benefits related to the Gunnison Project, such as employment opportunities, supplier services, infrastructure development and community investment are optimized for the local communities.

Economic Benefits

Excelsior commissioned an Economic Impact Study through Arizona State University’s W. P. Carey School of Business which forecasts the increase in economic activity within Arizona during the construction phase

and life of the mine. The economic impact of mine development to surrounding communities and the State in general:

Over 800 direct and indirect new jobs;
Employment benefits are distributed in mining, construction, professional & technical services, and government sectors as well as other sectors.
The annual average value added to Arizona’s Gross State Product (“ GSP ”) during the entire Project life – pre- production, production and closure – is approximately $109 million with approximately $28 million added within Cochise County. The total addition to the GSP is $2.9 billion, with $757 million locally within Cochise County.
Economically modeling predicts the Project will have an average annual impact on state revenues of $10.9 million for a total impact of $295 million.

Permitting

The Gunnison Project operations will require a number of Federal, state, and local government environmental permits. The environmental and permitting process involves, among other things, preparing a mine closure and reclamation plan for the Arizona State Mines Inspector. In addition, several permits must be obtained; the most important of which are an Aquifer Protection Permit (“ APP ”) from the State of Arizona, an Underground Injection Control permit from the US Environmental Protection Agency (“ USEPA ”) and the air quality permit from the State of Arizona. Currently, there are no known environmental liabilities for the Gunnison Project. The APP application was submitted to ADEQ on January 13, 2016 and it was found to be administratively complete. The UIC Permit application was received by USEPA on February 3, 2016.

The Project facilities regulated by APP are the ISR wellfield and nine impoundments: Solids Ponds 1a and 1b, 2a and 2b, and Solids Pond 3, Evaporation Ponds 1 and 2, the Recycled Water Pond, PLS Pond, Raffinate Pond and the Plant Runoff pond. BADCT for the wellfield includes the following elements: (1) balanced injection and recovery volumes, (2) hydraulic control pumping to maintain hydraulic gradients toward the wellfield, (3) operational controls regarding flow volumes and injection pressures, (4) well construction according to 40 CFR Subpart D, Section 146.30, (4) rinsing for closure, and (5) wellfield plugging and abandonment. The UIC Permit will focus on the design, construction, operation, and closure of the wellfield.

Table 1-5: Required Permits

Required Permits	Issuing Agency	Regulatory Program or Statute
Underground Injection Control (UIC) Permit (Application submitted February 2016)	United States Environmental Protection Agency (USEPA)	Safe Drinking Water Act
USEPA Identification Number (RCRA Subtitle C Site Identification Form 8700-12)	USEPA	Resource Conservation and Recovery Act (RCRA)
APP Individual Permit (for wellfield and impoundments) (Application submitted January 2016)	ADEQ	Environmental Quality Act – APP program
APP General Permits (for sewer system, other minor facilities)	ADEQ	Environmental Quality Act – APPprogram
AirQualityPermit	ADEQ	Clean Air Act
Drinking Water System Approval to Construct andApprovalofConstruction	ADEQ	Safe Drinking Water Act
Mined Land Reclamation Permit	Arizona State Mine Inspector	ARS. § 27-901
Intent to Clear Land	Arizona Department of Agriculture	ARS. § 3-904
Sewage System Permit	Cochise County Department of Health and Social Services	Environmental Quality Act – APP program
Encroachment Permit (for utility corridors under I-10)	Arizona Department of Transportation(ADOT)	AAC. R17-3-502
Dam Safety (for regulated impoundments)	ADWR	ARS. 45-1203 & 1206

Closure and Reclamation Costs

All closure activities, which are further described in Section 20 of the Technical Report, refer only to APP facilities. Non-APP facilities, such as buildings and infrastructure, will be reclaimed in accordance with the Mined Land Reclamation Program overseen by the Arizona State Mine Inspector’s Office. This program requires the development of reclamation plans that will ensure safe and stable post-mining land use. The plans must include cost estimates and financial assurance for implementing the reclamation plans.

Prior to recovery operations, Excelsior will provide a bond to ensure future mine closure expenses will be met. The amount of the bond will be based on the closure-remediation-reclamation cost estimates. Final closure of operational infrastructure including the containment ponds, tanks, and plants will commence once copper recovery has ended.

Closure of the ISR wellfield requires rinsing and neutralization of the portions of the formation that have been exposed to leaching. Clean water for rinsing will be provided by water supply wells and water from the Water Treatment Plant. Extracted rinse water will be treated with greater than 80 percent returned for additional rinsing and the remainder being entrained in the Solids Impoundment or disposed of in the Evaporation Ponds.

Rinsing is considered complete when the concentrations of all constituents are at or below acceptance criteria. Wells that are accepted as being sufficiently rinsed will be abandoned in accordance with ADWR criteria and the UIC Permit.

Process ponds, including PLS, Raffinate, Recycled Water, and Evaporation Ponds will be closed in accordance with Arizona BADCT requirements.

Capital and Operating Costs

Capital and operating costs for the Gunnison Copper Project were estimated on the basis of a feasibility design, estimates of materials and labor based on that design, analysis of the process flowsheets and predicted consumption of power and supplies, budgetary quotes for major equipment, and estimates from consultants and potential suppliers to the Project.

Capital Cost

Capital cost (“ CAPEX ”) is divided into initial and sustaining capital costs, as summarized in Table 1-6, below. Initial capital costs include separate estimates for wellfield development and improvements to the existing Johnson Camp plant to get the project into production, including the wellfield piping and electrical infrastructure, solution piping from the wellfield to the Johnson Camp plant and minor improvements to the Johnson Camp plant. The sustaining capital costs include the ongoing additions to the wellfield, the two stage development of the Gunnison SX-EW plant, the construction of a sulfuric acid plant, the installation of a railroad siding and railcar unloading facility at the sulfuric acid plant, the addition of the Water Treatment Plant, and capital equipment replacement. Estimates have been prepared to a Class 4 level as defined by Association for the Advancement of Cost Engineering.

Table 1-6: Summary of Capital Cost Spending Over the Life-of-Project

Stage	Copper Productio n	Description	Total ($000s)
Initial Capital (Stage 1)	25 mppa	Initial Wellfield Development; JCM SX-EW improvements, Pipelines between wellfield & JCM; Gunnison Evaporation Pond; Powerline rerouting.	$46,941
Stage 2 (Year 3)	75 mppa	Gunnison 50 mppa SX-EW; 80 EW cells; New PLS, Raffinate ponds; Gunnison ancillary bldgs.;	$117,030
Stage 3 (Year 6 & 7)	125 mppa	Wellfield Expansion; Gunnison 50 mppa SX-EW; 80 EW cells; Water Treatment Plant (WTP); Clean & Recycled Water Ponds; Solids Ponds 1A & 1B; Wellfield expansion; Railroad Siding & Railcar Unloading	$147,254
Acid Plant (Years 5 & 6)		Sulfuric Acid Plant, Molten Sulfur Handling, Cogen Plant; Boiler Water Treatment (Optional)	$81,246
Sustaining Capital		All wellfield drilling costs after Stage 1	$309,961
Sustaining Capital		All wellfield infrastructure expansion after Stage 1, Solids Impoundments 2 & 3.	$86,596
Total		Initial & Sustaining Capital Cost	$789,028

The capital cost estimates were based on general arrangement (“ GA ”) drawings for all Project plant areas. M3 used both escalated original and updated capital equipment quotations. Plant piping, plant electrical, and plant instrumentation disciplines were estimated with material take-offs (“ MTOs ”) based on piping and instrumentation diagrams (“ P&IDs ”) in conjunction with the GAs. Long runs of field piping, wellfield piping, infrastructure, and overhead powerlines were also estimated using MTOs. MTOs for civil excavation and ponds, concrete, steelwork, and architectural disciplines were based on civil drawings and GAs. Construction labor hours and wages were adjusted for current Davis-Bacon prevailing wages in Arizona.

Indirect capital costs were factored from the direct field cost.
Indirect field mobilization is 1.5% of the direct field cost without mobile equipment.
Temporary construction facilities are 0.5% of direct cost less mobile equipment.

Construction power is 0.1% of direct cost less mobile equipment.
Engineering Procurement and Construction management is 16.8% of the direct cost plus the indirect cost listed above.
EPCM temporary facilities and utility setup were estimated as 0.5% of total constructed cost.
Commissioning was estimated to cost 1% of plant equipment less mobile equipment.
Vendor supervision is estimated as 1.5% of plant equipment costs during construction and 0.5% of plant equipment costs, each, for pre-commissioning and commissioning.
Capital spare parts are estimated as 2.0% of plant equipment and commissioning spares are 0.5% of plant equipment.

Contingency for both wellfield development and plant improvements have been included at 20% of the total direct and indirect costs.

Owner’s costs include items for the initial capital cost that fall into the Owner’s responsibility. The Owner’s costs are estimated to be $5.5 million of which the largest item is the first fills three months of sulfuric acid for the wellfield ($2.0 million or 36%). Other major costs include:

Replacing the diluent and extractant for the Johnson Camp settlers
Sulfuric acid for electrolyte make-up
Staffing build-up and training
Construction insurance
Vehicle replacements

The accuracy range of the estimate is +15% to -15% suitable to support a feasibility study.

Sustaining capital costs include all capital expenditures that occur after production begins. For the Gunnison Project, major sustaining capital expenditures are planned for Year 3 when Stage 2 of the Project is constructed and Year 6 with Stage 3 of Project construction. Stage 2 includes construction of a 50 mppa SX-EW plant at the Gunnison site. Major facilities include a SX Facility with two extraction and one strip settlers; an 80-cell EW Tankhouse with an Automatic Cathode Stripping Machine; a Tank Farm to receive, store, process, and transfer process solutions; PLS and Raffinate Ponds, Sulfuric Acid Storage Tanks, a new Electrical Substation; and ancillary buildings including a Security Building with truck scale, Administration Building, Change House, Plant Warehouse, Plant Maintenance Building, and Wellfield Maintenance Building.

Stage 3 construction includes an 80 EW-cell expansion of the Gunnison SX-EW plant for an additional 50 mppa copper production (125 mppa total). Stage 3 also includes the installation of a Sulfuric Acid Plant with railroad siding/railcar unloading. The WTP will be added in Year 7. Separate capital cost build-ups were constructed for the Stage 2 and Stage 3 SX-EW plants, and the sulfuric acid plant. The WTP CAPEX was included in the Stage 3 expansion CAPEX. Indirect costs and 20% contingency were applied to the separate CAPEX build-ups but Owners Costs were only applied to the initial CAPEX.

Sustaining capital beyond Year 7 is primarily related to wellfield development, the installation of additional evaporation ponds and solids impoundments for water management and wellfield rinsing and abandonment.

Some of the costs and quantity estimates used by M3 were provided by others.

Veolia provided capital equipment and operating cost information for the Water Treatment Plant to be constructed in Year 7 to treat water returned from rinsing operations in areas of the wellfield that have been depleted of economically recoverable copper. These costs were not changed.
Kinley Exploration LLC, Overland Park, Kansas, prepared revised cost estimates in accordance with the FS production schedule for installation and development of extraction, injection, and hydraulic control wells, as well as well abandonment costs for existing wells and core holes and production wells that have been rinsed and are out of service.
For the 2014 PFS, NORAM Engineering and Constructors Ltd. Vancouver, British Columbia, Canada, provided capital and operating cost for the acid plant to be constructed in Year 6. These costs were scaled up mathematically to increase the sulfuric acid plant from 1350 stpd to 1625 stpd capacity.
MHF Services of Wexford, Pennsylvania estimated the capital costs to install a railroad siding off of the Union Pacific Southern Pacific railroad and rail transfer and unloading yard for deliveries of acid and/or sulfur.

Operating Cost

Operating costs for the Gunnison Project are separated into three basic categories: Wellfield, SX-EW, and General and Administrative (“ G&A ”). Operating costs for the Sulfuric Acid/Cogeneration Plant and Water Treatment Plant are also treated separately upon their addition to the Project.

ISR Wellfield Operating Cost

Wellfield operations involve injection of acidified raffinate from the SX-EW plant into injection wells, recovery of PLS from production wells, pumping the recovered PLS to a tank or pond for treatment in the SXEW plant, maintenance of the wells and wellfield, reconfiguring well equipment, and revising piping and electrical equipment within the wellfield as required.

Wellfield drilling and development are capitalized and are not included as an annual expense. The operating costs for the wellfield include labor to manage solutions, power to run the pumps, acid, maintenance, and supplies and services, which are summarized in Table 1-7 below.

Table 1-7: ISR Wellfield Operating Cost Breakdown

Item	Stage 1 (Year 3)	Stage 1 (Year 3)	Stage 2 (Year	6)	Stage 3 (Year 9)
	Annual cost ($000s)	Cost per lb. Cu	Annual cost ($000s)	Cost per lb. Cu	Annual cost ($000s)	Cost per lb. Cu
Wellfield Labor	818	0.032	1,180	0.016	1,542	0.012
Electrical power	706	0.028	1,997	0.027	3,403	0.027
Sulfuric Acid (Wellfield Make-up)	13,813	0.538	41,502	0.555	26,006	0.206
Maintenance	1,046	0.041	1,834	0.025	1,882	0.015
Supplies & Services	66	0.003	198	0.003	331	0.003
Total Wellfield Operating Costs	16,448	0.641	46,711	0.625	33,164	0.262

SX-EW Operating Cost

The operating cost for the combined SX/EW facilities averages $26.0 million per year or $0.220 per pound of copper produced for Stage 3 (Years 7 thru 20), not including G&A, water treatment costs, or evaporation ponds. Stage 1 plant operating costs average $7.3 million or $0.327 per pound. Stage 2 plant operating costs average $18.3 million per year or $0.261 per pound. Table 1.8 gives example years within Stages 1, 2, and 3 showing the breakdown of SX operating cost by operating labor, reagents, power, maintenance labor and spare parts, and operating supplies.

Table 1.8: Summary SX/EW Operating Cost

Category	Stage 1(Year 3)	Stage 1(Year 3)	Stage 2(Year 6)	Stage 2(Year 6)	Stage 3(Year 9)	Stage 3(Year 9)
	Annual cost ($000s)	Cost per lb. Cu	Annual cost ($000s)	Cost per lb. Cu	Annual cost ($000s)	Cost per lb. Cu
Operating Labor	$1,546	$0.060	$2,930	$0.039	$3,020	$0.024
Reagents	$1,027	$0.040	$3,202	$0.043	$4,316	$0.034
Electric Power	$3,154	$0.123	$8,435	$0.113	$13,450	$0.106
Maintenance Parts & Services1	$1,746	$0.068	$3,855	$0.052	$5,618	$0.044
Operating Supplies & Services	$201	$0.008	$513	$0.007	$802	$0.006
Total Operating Cost	$7,674	$0.299	$18,934	$0.253	$27,207	$0.215
1 - Includes maintenance labor costs.

General and Administrative Operating Costs

G&A costs include labor and fringe benefits for administration and support personnel and other support expenses detailed in Section 25.5.3. G&A expenses are projected to increase slightly with Stages 2 and 3, but decrease in cost per pound of copper produced as shown in Table 1-9.

Table 1-9: Summary SX-EW Operating Cost ($000)

Cost Item	Stage 1		Stage 2		Stage 3
	Annual cost ($000s)	Cost per lb. Cu	Annual cost ($000s)	Cost per lb. Cu	Annual cost ($000s)	Cost per lb. Cu
Production Basis (mppa)	25,648		74,773		126,433
Labor & Benefits	$3,495	$0.136	$3,884	$0.052	$3,884	$0.031
Other G&A Expenses	$2,700	$0.106	$2,918	$0.039	$2,918	$0.023
Total G&A Cost	$6,195	$0.242	$6,802	$0.091	$6,802	$0.054

Water Treatment Plant Operating Costs

WTP operation is related to rinsing operations and is therefore not an operating expense for copper production. An estimate of annual OPEX has also been developed based on vendor data, previous estimates for similar treatment systems and plant operating experience. Major OPEX categories include labor, utility power, chemical reagents, process consumables, waste disposal and compliance sampling, analysis and reporting. Annual wages for operators and electrical power cost are site specific, and were provided by M3. Life-of-mine (“ LOM ”) operating costs for the WTP are projected to total $103 million, or approximately $ 0.048 per pound of copper produced.

Sulfuric Acid Plant

Operating costs for the sulfuric acid plant, power cogeneration plant, and associated facilities is composed of labor, reagents, fuel (propane), power (which is a credit), maintenance, and operating supplies. Annual operating expenses are projected to average approximately $27.38 million or $46.45 per ton of sulfuric acid produced at a rate of approximately 589,500 tons per year. At average peak copper production of 125.4 mppa, the average acid production cost is approximately $0.22 per pound of copper.

Reclamation and Closure Cost

The reclamation and closure costs for the Project include reclamation and closure activities at both JCM and Gunnison plant sites, reclamation of legacy heaps and stockpiles at JCM, well abandonment and closure of the ISR wellfield, and bonding costs. ISR rinsing and water treatment activities are not included in this category. Much of the well abandonment will be conducted concurrently with production. Table 1-10 summarizes the total reclamation and closure costs for the Project. Details of the activities included in reclamation and closure are provided in Section 21.6. Approximately 50% ($24.2 million) of these expenses are projected to be made prior to the end of production.

Table 1-10: Summary of Reclamation and Closure Costs

Area	Reclamation & Closure Costs ($000s)
JCM Buildings, Ponds, Waste Dump & Heap	5,580
Well Abandonment	17,569
Gunnison Plant, Ponds	18,917
Bond Fees	8,334
Total	50,400

Economic Analysis

The financial evaluation presents the determination of the NPV, payback period (time in years to recapture the initial capital investment), and the IRR for the Project. Annual cash flow projections were estimated over the life of the operation based on the estimates of capital expenditures and production cost and sales revenue. The sales revenue is based on the production of a copper cathode.

The economic analysis was conducted on two cases: (1) a base case that includes the construction of a sulfuric acid plant in Year 7 of operation, lowering the price of acid from $125/ton to $46/ton (Base Case and (2) an alternate case that uses purchased sulfuric acid at $125/ton for the life of the operation (Alternate Case). Both cases use a copper price of $2.75/lb.

Table 1-11 compares the financial indicators for both the Base Case and the Alternate Case. The payback period does not represent the payback solely for initial CAPEX. Rather, it includes the accumulation of initial capital to start the Project using the existing Johnson Camp SX-EW plant and sustaining capital from two successive stages of construction for the Gunnison SX-EW plant, sulfuric acid plant, the rail spur, and water treatment plant. The payback period on initial capital, where Stage 2 is pushed out by three more years is 1.9 years pre-tax and 2.7 years after taxes.

Table 1-11: Financial Indicators

	Base Case	Alternate Case
	Base Case	Alternate Case
Years of Commercial Production	24	24
Total Copper Produced (million lbs)	2,165	2,165
LOM Copper Price (avg $/lb)*	$2.75	$2.75
Initial Capital Costs (million $)	$46.9	$46.9
Sustaining Capital Costs (million $)	$741.8	$660.6
Payback of Capital (pre-tax/post-tax)	4.5/6.4	4.4/4.9
Internal Rate of Return (pre-tax/post-tax)	48.4% / 40.2%	48.5% / 40.6%

Life of Mine Direct Operating Cost ($/pound Cu Recovered)	$0.65	$0.97
Life of Mine Total Production Cost ($/pound Cu Recovered)	$0.87	$1.18
Pre-tax NPV at 7.5% discount rate (million $)	$1173.1	$980.4

*Price provided by Excelsior

Table 1-12 provides a sensitivity analysis for the Base Case project financial indicators with the financial indicators when other different variables are applied. The results indicate that Project economics are impacted the most by fluctuation in the copper price. Fluctuation in the initial capital cost has the least impact on Project economic indicators.

Table 1-12: Base Case After – Tax Sensitivities ($millions)

	Copper Price	Copper Price
	NPV @ 7.5%	IRR%	Payback (yrs)
Base Case	$ 808.0	40.2%	6.4
20%	$ 1,115.7	51.7%	4.0
10%	$ 962.4	46.0%	4.6
-10%	$ 651.6	34.2%	6.9
-20%	$ 495.3	28.2%	7.4
	Operating Cost
	NPV @ 7.5%	IRR%	Payback (yrs)
Base Case	$ 808.0	40.2%	6.4
20%	$ 735.6	36.7%	6.7
10%	$ 771.8	38.4%	6.6
-10%	$ 843.3	41.9%	5.3
-20%	$ 878.0	43.6%	4.9
	Initial Capital
	NPV @ 7.5%	IRR%	Payback (yrs)
Base Case	$ 808.0	40.2%	6.4
20%	$ 802.7	38.5%	6.5
10%	$ 805.4	39.3%	6.5
-10%	$ 810.6	41.1%	6.4
-20%	$ 813.1	42.1%	6.4

The Alternate Case economic after tax sensitivities are shown below.

Table 1-13: Alternate Case After – Tax Sensitives ($millions)

	Copper Price	Copper Price
	NPV @ 7.5%	IRR %	Payback (yrs)
Base Case	$ 693.7	40.6%	4.9
20%	$ 1002.2	52.6%	4.0
10%	$ 848.0	46.7%	4.4
-10%	$ 536.3	34.1%	6.4
-20%	$ 378.4	27.3%	7.1
	Operating Cost
	NPV @ 7.5%	IRR %	Payback (yrs)
Base Case	$ 693.7	40.6%	4.9
20%	$ 593.1	36.3%	6.3
10%	$ 643.7	38.5%	6.1
-10%	$ 742.4	42.6%	4.7
-20%	$ 791.0	44.6%	4.5
	Initial Capital
	NPV @ 7.5%	IRR %	Payback (yrs)
Base Case	$ 693.7	40.6%	4.9
20%	$ 688.5	38.8%	5.0
10%	$ 691.1	39.6%	4.9
-10%	$ 696.3	41.6%	4.8
-20%	$ 698.8	42.7%	4.8

Adjacent Properties

The Gunnison Project lies within the porphyry copper metallogenic province of the southwestern United States. It is located in the Cochise Mining District, which is dominated by Cu-Zn skarns. With the acquisition of the Johnson Camp Mine, Excelsior now controls a majority of historical producing properties in the district. Tungsten and minor lead-silver-gold have been produced in adjacent properties in the district. In particular, tungsten has been historically produced in the area west of the Gunnison Project in the northern half of the Texas Canyon quartz monzonite stock before and during World War I. Lead-silver was also historically

produced from Paleozoic limestones in the Gunnison Hills east of the Gunnison Project in the early 1900s. Mineralization on adjacent properties is not necessarily indicative of the mineralization on the Gunnison Project. The author has relied on reports by others (as referenced) for the information presented in this section and has been unable to verify the information.

Interpretation and Conclusions

A production schedule has been developed using input from independent consultants and existing Project data. The production schedule anticipates recovery of 48.4% of the mineral reserves resulting in production of 2,165 million pounds of cathode copper over a mine life of 25 years.

The base-case economic analysis indicates an after-tax NPV of $806.6 million at a 7.5% discount rate with a projected IRR at 41.4%. The Base Case includes a sulfuric acid plant constructed in Year 6 to supply the acid for ISR copper extraction. If the sulfuric acid plant is replaced by purchased sulfuric acid supplied by rail, the NPV at a 7.5% discount rate is $691.2 million with projected IRR of 40.5%. Payback is anticipated in 6.5 years of production for the acid plant case and in 4.9 years in the case using purchased sulfuric acid.

The economics are based on $2.75/lb long-term copper price, a staged production schedule of 25 mppa for Years 1-3, 75 mppa for Years 4-6 and a full production design copper production rate of 125 mppa for Years 7-16, decreasing in the final 8 years of the mine life. Direct operating costs are estimated at $0.66/lb of copper in the acid plant case and $0.97/lb of copper using purchased acid. Initial capital costs are estimated at $46.9 million. Sustaining capital costs of $741.8 million are projected in the sulfuric acid plant case and $660.6 million using purchased sulfuric acid.

Project Risks

Project-specific risks are identified in Section 25.2 along with the measures that Excelsior envisages to mitigate these risks. The risks are primarily associated with the ability of the ISR wellfield to deliver copper to the SXEW plant(s) at the rate, grade, reagent cost, and well installation and operation costs as predicted in the financial model. These risks can be mitigated by operational flexibility, use of the acid plant to reduce the cost of reagents, and/or modification of the wellfield design. Permitting difficulties are a common issue for mine development projects in this era. The mitigation strategy is to develop support in the community and work closely with stakeholders, regulators, and community leaders to develop a realistic schedule for permit acquisition.

Project Opportunities

Several opportunities have been identified which could enhance the viability and economic attractiveness of the Project. Opportunities, detailed in Section 25.3, include higher copper recoveries than predicted, increases in the price of copper, identification of additional resources, wellfield optimization, and reductions to capital costs, particularly in the initial stage of operation.

Recommendations

Based on the results of the Feasibility Study, it is recommended that Excelsior proceed with development of the Project through basic and detailed engineering, once permitting has been obtained and financing is secured. The engineering for the project is relatively complete. The drilling, mineral resource estimation, wellfield mine planning, wellfield drilling and infrastructure development and the staged SX-EW plant have all been adequately defined. Until the initial wellfield is drilled and solution is pumped for processing, there is not much left to investigate. Additional work is recommended to advance the efforts to obtain the necessary environmental permits, refine the design and cost estimates for water treatment, and advance the design of the sulfuric acid/cogeneration plant to enable more conclusive evaluation of its economic benefit to later stages of the Project. Table 1-14 provides a proposed budget for the additional work recommended.

Table 1-14: Feasibility Budget for the Gunnison Project

Detail	Cost
	US$
Permitting Work
Gunnison APP	$150,000
Gunnison UIC	$150,000
JCM APP Amendment	$100,000
Other Permits	$50,000
Subtotal Permitting Work	$450,000
Sulfuric Acid Plant
Sulfuric Acid Plant proper (NORAM or other)	$350,000
Sulfuric Acid Storage	$50,000
Cogeneration Facilities	$50,000
Molten Sulfur Storage	$50,000
Railcar sulfur/sulfuric acid unloading	$50,000
Subtotal Sulfuric Acid Plant	$500,000

Total	950,000

Additional Information

Subsequent to the completion of the Feasibility Study, the Company completed the construction of the Gunnison Project in 2019 and entered the ramp-up phase. The table below provides an update to the key economic analysis metrics as compared to the Feasibility Study:

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Other Assets

The Company does not have any material assets other than those described above.

RISK FACTORS

Investing in our securities is speculative and involves a high degree of risk due to the nature of our business and the present stage of its development. The following risk factors, as well as risks currently unknown to us, could materially adversely affect our future business, operations and financial condition and could cause them to differ materially from the estimates described in forward-looking statements relating to the Company, or its business, property or financial results, each of which could cause purchasers of our securities to lose part or all of their investment. The risks set out below are not the only risks we face; risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business, financial condition, results of operations and prospects. You should also refer to the other information set forth or incorporated by reference in this AIF.

Risks Related to the Business of the Company

Excelsior depends on a single mineral project.

The Gunnison Project accounts for all of Excelsior's mineral resources and mineral reserves and exclusively represents the current potential for the future generation of revenue. Mineral exploration and development involve a high degree of risk that even a combination of careful evaluation, experience and knowledge cannot eliminate and few properties that are explored are ultimately developed into producing mines. Any adverse development affecting the Gunnison Project will have a material adverse effect on Excelsior's business, prospects, financial position, results of operations and cash flows.

Mining operations generally involve a high degree of risk.

Excelsior’s mining operations are subject to all of the hazards and risks normally encountered in the exploration for and development and production of metals, including, but not limited to: unusual and unexpected geologic

formations, environmental hazards, seismic activity, structural collapse, fire, flooding, variations in grade, deposit size, density and other geological problems, hydrological conditions, metallurgical and other processing problems, mechanical equipment performance problems, industrial accidents, the unavailability of power, the unavailability of materials and equipment including reagents and fuel, acid supply, labour force disruptions, unanticipated transportation costs, unanticipated regulatory changes, unanticipated or significant changes in the costs of supplies including, but not limited to, petroleum and reagents, acid supply, and adverse weather conditions and other conditions involved in the drilling and removal of material, these and other hazards may cause damage to, or destruction of, all or part of the Gunnison Project and other facilities, injuries or death to employees, contractors or other persons at the Company's mineral properties, severe damage to and destruction of the Company's property, plant and equipment, and contamination of, or damage to, the environment, and may result in the suspension of the Company's development and production activities. Safety measures implemented by the Company may not be successful in preventing or mitigating future accidents.

In addition, from time to time the Company may be subject to governmental investigations and claims and litigation filed on behalf of persons who are harmed while at its properties or otherwise in connection with the Company's operations. To the extent that the Company is subject to personal injury or other claims or lawsuits in the future, it may not be possible to predict the ultimate outcome of these claims and lawsuits due to the nature of personal injury litigation. Similarly, if the Company is subject to governmental investigations or proceedings, the Company may incur significant penalties and fines, and enforcement actions against it could result in the closing of the Gunnison Project or the JCM. If claims and lawsuits or governmental investigations or proceedings are finally resolved against the Company, the Company's financial performance, financial position and results of operations could be materially adversely affected.

Excelsior maintains insurance to protect against certain risks. At a minimum, these comply with all regulatory requirements and contractual obligations of the Company. However, insurance will not cover all of the potential risks associated with the Company’s operations. Excelsior also may be unable to maintain insurance to cover certain risks at economically feasible premiums. Insurance coverage may not continue to be available or may not be adequate to cover all resulting losses or liability. Excelsior might also become subject to liability for pollution or other hazards against which it may not be insured, may be underinsured or that Excelsior may elect not to insure against because of premium costs or other reasons. Losses from these events may cause Excelsior to incur significant costs that could have a material adverse effect upon its financial position, results of operations or cash flows.

The successful start of mining operations at, and the development of, the Gunnison Project into a commercially viable mine cannot be assured.

The commercial viability of a mineral deposit is dependent upon a number of factors which are beyond the Company's control, including the attributes of the deposit, commodity prices, government policies and regulation and environmental protection. Fluctuations in the market prices of minerals may render resources and deposits containing relatively lower grades of mineralization uneconomic. There is no certainty that Excelsior will be able to have available funds to finance mining operations, avoid potential increases in costs, recruit and train personnel, or that Excelsior will be able to update, renew and obtain all necessary permits to start or to continue to operate the Gunnison Project. Most of these activities require significant lead times, and Excelsior will be required to manage and advance these activities concurrently in order to begin production. A failure or delay in the completion of any one of these activities may delay production, possibly indefinitely, at the Gunnison Project and would have a material adverse effect on Excelsior's business, prospects, financial position, results of operations and cash flows. There is no assurance that Excelsior will ever achieve commercial production or that Excelsior will ever be profitable if production is achieved.

In addition, the Gunnison Project, given its unique geological conditions, will deploy an in situ wellfield recovery method that, while in use in other resource extraction sectors (most notably in uranium), will be one of the first of its kind to extract copper at commercial levels relying solely on this method. This in situ mining

method of the Gunnison Project presents additional development ramp-up risks and complexity compared to a traditional underground or open pit operation which could result in delays, interruptions, lower recoveries than forecasted and/or increased costs to the development of the Gunnison Project. These risks include the impact of precipitates or carbon-dioxide blocking or restricting recovery flow, which in turn reduces copper production.

There is no assurance that the in-situ extraction of copper at the Gunnison Project can be completed as currently contemplated in the feasibility study for the Gunnison Project. Specifically, there is no assurance that current operations will establish that the recoveries of leach copper solution, known as sweep efficiencies, will be as expected. In addition, the results of operations may indicate that changes to mining operations at the Gunnison Project may be required, which may result in delays and/or higher than anticipated construction and operating costs to achieve commercial production at the Gunnison Project.

Actual capital costs, operating costs and expenditures, production schedules and economic returns may differ significantly from those we have anticipated.

Our expected capital costs, operating costs and expenditures, All-In Costs, production schedules, economic returns and other projections for the Gunnison Project which are contained in the Technical Report are based on assumed or estimated future metals prices, cut-off grades, operating costs, capital costs and expenditures and other factors that each may prove to be inaccurate. Therefore, the Technical Report may prove to be unreliable if the assumptions or estimates do not reflect actual facts and events. For example, significant declines in market prices for copper or extended periods of inflation would have an adverse effect on the economic projections set forth in the Technical Report.

Any material reductions in estimates of mineralization or increases in capital costs and expenditures, or in our ability to maintain a projected budget or renew a particular mining permit, could also have a material adverse effect on projected production schedules and economic returns, as well as on our overall results of operations or financial condition. There is also a risk that rising costs for labour and material could have an adverse impact on forecasted construction costs and that shortages of labour and material could have a negative impact on any mine development schedule. An increase in any of these costs, or a lack of availability of commodities and goods, may have an adverse impact on our financial condition and results of operations.

The Company may be required to seek additional debt or equity capital in order to continue mining operations at the Gunnison Project and we may not be able to access capital on commercially reasonable terms or at all and, even if successful, we may not be able to raise enough capital to allow us to fully fund the costs required to continue mining operations at the Gunnison Project.

There is uncertainty relating to production estimates.

We have prepared estimates of future production and future production costs for the Gunnison Project. No assurance can be given that production estimates will be achieved. These production estimates are based on, among other things: the accuracy of reserve estimates; the accuracy of our assumptions as to future events and circumstances; metallurgical, geological and hydrological characteristics; and the accuracy of estimated rates and costs of mining and processing. Actual production may vary from estimates for a variety of reasons, including, among other things: actual ore mined varying from estimates of grade, tonnage, dilution, metallurgical and other characteristics; short-term operating factors relating to the ore reserves, such as the need for sequential development of ore bodies and the processing of new or different ore grades; risk and hazards associated with mining; natural phenomena, such as inclement weather conditions, underground floods, earthquakes, cave-ins; and unexpected labour shortages or strikes. Failure to achieve production estimates could have an adverse impact on our future cash flows, earnings, results of operations and financial condition.

General economic conditions may adversely affect Excelsior's growth, future profitability, ability to finance and operations.

Global financial conditions continue to be characterized as volatile. In recent years, global markets have been adversely impacted by various credit crises and significant fluctuations in metals prices and fuel and energy costs. Many industries, including the mining industry, have been impacted by these market conditions. Global financial conditions remain subject to sudden and rapid destabilizations in response to future events. A continued or worsened slowdown in the financial markets or other economic conditions, including but not limited to consumer spending, employment rates, business conditions, inflation, fuel and energy costs, consumer debt levels, lack of available credit, the state of the financial markets, interest rates and tax rates, may adversely affect our growth and profitability. Future crises may be precipitated by any number of causes, including natural disasters, geopolitical instability, changes to energy prices or sovereign defaults. If increased levels of volatility continue or in the event of a rapid destabilization of global economic conditions, it may result in a material adverse effect on commodity prices, demand for metals, including, copper, availability of credit, investor confidence, and general financial market liquidity, all of which may adversely affect our business and the market price of our securities.

In addition, the current outbreak of the novel coronavirus (COVID-19) that was first reported from Wuhan, China in December 2019, and any future emergence and spread of similar pathogens could have a material adverse effect on global economic conditions which may adversely impact our business and results of operations and the operations of our suppliers, contractors and service providers, and the demand for our production. While initially the outbreak was largely concentrated in China and caused significant disruptions to its economy, it has now spread to many other countries and infections have been reported globally. The spread of the coronavirus may have a significant adverse impact on our workforce, production levels, and our ability to continue operating the Gunnison Project. Government efforts to curtail the spread of the coronavirus may also result in temporary or long-term suspensions or shut-downs of our operations. The extent to which the coronavirus impacts our operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, new information that may emerge concerning the severity of the coronavirus and the actions taken to contain the coronavirus or treat its impact, among others. See “Outlook” for additional information on the Company’s response to COVID-19.

Moreover, the actual and threatened spread of the coronavirus globally could also have a material adverse effect on the regional economies in which we operate, could continue to negatively impact stock markets, including the trading price of our shares, could adversely impact our ability to raise capital, could cause continued interest rate volatility and movements that could make obtaining financing or refinancing our debt obligations more challenging or more expensive and could result in any operations affected by coronavirus becoming subject to quarantine. Any of these developments, and others, could have a material adverse effect on our business and results of operations.

The development of our properties will be subject to all of the risks associated with establishing new mining operations.

Development of our mineral properties will require the operation of mines, processing plants and related infrastructure as well as restarting the SX-EW plant at JCM. As a result, we are and will continue to be subject to all of the risks associated with establishing new mining operations and restarting operations in care and maintenance, including:

the timing and cost, which can be considerable, of the construction and operation of mining and
processing facilities;
the availability and cost of skilled labour, mining equipment and principal supplies needed for
operations;
the need to maintain necessary environmental and other governmental approvals and permits;

the availability of funds to finance mining operations;
potential opposition from non-governmental organizations, environmental groups, local groups
or other stakeholders which may delay or prevent mining operations; and
potential increases in construction and operating costs due to changes in the cost of labour, fuel,
power, materials and supplies.

It is common in new mining operations to experience unexpected costs, problems and delays during construction, development and mine start-up. Accordingly, we cannot provide assurance that our activities will result in profitable mining operations at our mineral properties.

Mineral reserve and mineral resource calculations are only estimates.

Any figures presented for mineral reserves and mineral resources in this AIF and the Technical Report are only estimates. There is a degree of uncertainty attributable to the calculation of mineral reserves and mineral resources as they are determined based on assumed future prices, cut off grades and operating costs. Until mineral reserves or mineral resources are actually mined and processed, the quantity of metal and grades must be considered as estimates only and no assurances can be given that some or all of the indicated levels of metals will be produced. In making determinations about whether to advance any part of the Gunnison Project to development, Excelsior must rely upon estimated calculations as to the mineral reserves, mineral resources and grades of mineralization on the Gunnison Project.

Estimating mineral reserves and mineral resources is a subjective process that relies on the judgment of the persons preparing the estimates. Estimates of mineral resources are, to a large extent, based on the interpretation of geological data obtained from drillholes and other sampling techniques. This information is used to calculate estimates of the configuration of the mineral resource, expected recovery rates, anticipated environmental conditions and other factors. As a result, mineral resource estimates for the Gunnison Project may require adjustments or downward revisions based upon further exploration or development work or upon actual production experience, thereby adversely impacting the economics of the Gunnison Project. In addition, the grade of ore ultimately mined, if any, may differ from that indicated by drilling results. There can be no assurance that minerals recovered in small-scale tests will be duplicated in large-scale tests under on-site conditions or in production scale. Any material change in the quantity of mineralization or grade may render portions of the Company's mineralization uneconomic and result in reduced reported mineralization. Any material reductions in estimates of mineralization, or of the Company's ability to extract this mineralization, could have a material adverse effect on the Company's results of operations or financial condition.

Changes in the market price of copper, which in the past has fluctuated widely, will affect the projected results of Excelsior's operations, financial position and cash flows.

Excelsior's revenues in the future, if any, are expected to be derived in large part from the sale of copper. The price of this commodity has fluctuated widely in recent years and is affected by factors beyond the control of Excelsior including, but not limited to international economic and political trends, changes in industrial demand, currency exchange fluctuations, economic inflation and expectations for the level of economic inflation in the consuming economies, interest rates, global and local economic health and trends, speculative activities, the availability and costs of substitutes and changes in the supply of this commodity due to new mine developments and mine closures. All of these factors, which are impossible to predict with certainty, will impact the viability of the Gunnison Project.

Reduction in the demand for copper in the Chinese markets may negatively impact Excelsior's operations and financial condition.

China has been a significant driver of global demand for minerals and metals, including copper. A slowing in China’s economic growth could result in lower prices and demand for copper. China is increasingly seeking

strategic self-sufficiency in key commodities, including investments in existing businesses or new developments in other countries. These investments may adversely impact future copper demand and supply balances and prices.

Excelsior will require additional capital in the future, and no assurance can be given that such capital will be available at all or available on terms acceptable to Excelsior.

Excelsior currently has no cash flow from production. While initial construction has been completed, the continued operations or expansion in production capacity of the Gunnison Project depends upon Excelsior's ability to obtain financing through strategic partnerships, equity or debt financings, production-sharing arrangements or other dilutive or non-dilutive means. There is no assurance that Excelsior will be successful in obtaining required financing on acceptable terms, or at all. If Excelsior is unable to obtain additional financing it may consider other options, such as (i) selling assets, (ii) selling equity, or (iii) selling interests in the Gunnison Project. If Excelsior raises additional funding by issuing additional equity securities or other securities that are convertible into equity securities, such financings may substantially dilute the interest of existing or future shareholders. Sales or issuances of a substantial number of securities, or the perception that such sales could occur, may adversely affect the prevailing market price of the Common Shares. With any additional sale or issuance of equity securities, investors will suffer dilution of their voting power and may experience dilution in earnings per share. If Excelsior raises additional funding by entering into stream agreements, royalty agreements or other similar agreements, the Company may be required to deliver a portion of future metals production or revenue derived from operations. Such contractual obligations may have a negative effect on our future financial condition and results of operations and investors may suffer dilution in earnings per share. There is no assurance we will be able to negotiate acceptable terms for the sale of any interests in the Gunnison Project. Failure to obtain additional financing could result in an indefinite postponement of further exploration and development of the Gunnison Project and will have a material adverse effect on Excelsior’s business, prospects, financial position, results of operations and cash flows.

Excelsior has no history of mining operations and no revenue from operations.

We have recently commenced the ramp-up phase leading to commercial production at the Gunnison Project and have achieved first copper production. However, copper production has not yet reached levels that are economically viable. As such, we are subject to many risks common to a start-up mining operation, including under-capitalization, cash shortages, limitations with respect to personnel, financial and other resources and lack of revenues. There can be no assurance that significant losses will not occur in the near future or that we will be profitable in the future. Our operating expenses and capital expenditures may increase in the future as consultants, personnel and equipment costs associated with advancing development and commercial production of our properties increase. We expect to continue to incur losses unless and until such time, if ever, we enter into commercial production and generate sufficient revenues to fund our continuing operations. There can be no assurance that we will generate any revenues. If we are unable to generate significant revenues at the Gunnison Project, we will not be able to earn profits or continue operations.

Excelsior has a history of losses and expects to incur losses for the foreseeable future.

Excelsior has incurred losses since its inception and expects to incur losses for the foreseeable future. Excelsior expects to continue to incur losses unless and until such time as the Gunnison Project enters into commercial production and generates sufficient revenues to fund continuing operations. The operation of the Gunnison Project will require the commitment of substantial financial resources. The amount and timing of expenditures will depend on a number of factors, including the progress of mining operations, the results of consultant analysis and recommendations, the rate at which operating losses are incurred, the execution of any agreements with strategic partners, and Excelsior's acquisition of additional properties. Some of these factors are beyond Excelsior's control. There can be no assurance that Excelsior will ever achieve profitability.

Risks associated with secured debt.

The Company’s obligations under the Nebari Credit Agreement are secured against the Gunnison Project. Any failure to meet any of the payment obligations under the Nebari Credit Agreement, or otherwise adhere to the positive and negative covenants therein or fulfill the other obligations thereunder, may trigger an event of default and a demand for full immediate repayment of all amounts outstanding under the Nebari Credit Agreement. We may be able to generate cash flow from operations in the future sufficient to service our debt and make necessary capital expenditures. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations. If the Company is unable to repay all amounts outstanding under the Nebari Credit Agreement, Nebari may realize on its security and the Company could lose its interest in the Gunnison Project.

Risks associated with Copper Stream Agreement.

Pursuant to the Stream Agreement with Triple Flag, the Company is required to maintain a leverage ratio of 3.5:1.0. The leverage ratio is calculated as the ratio of indebtedness of the Company to net income (adjusted for certain items). The applicability of the leverage ratio has been suspended until March 31, 2022 (the “ Leverage Ratio Grace Period ”). Because the Gunnison project is in the process of ramping up to production, management does not expect that the leverage ratio will be able to be met until some time in 2021. If the Company does not meet the leverage ratio prior to the end of the Leverage Ratio Grace Period, the Company will be in default of this covenant in the Stream Agreement. If the Company defaults, then Triple Flag will have certain options available to it. In a default scenario Triple Flag may demand from the Company all amounts and deliveries due from the Company to Triple Flag but not paid or made. In addition, Triple Flag may also elect to terminate the Stream Agreement. If Triple Flag terminates the Stream Agreement, it can seek to recover the greater of its target return amount and the value of the deliveries that would have occurred over the life of the Stream Agreement if it had not been terminated. A default under the Stream Agreement would also cause a default under the terms of the Nebari Credit Agreement. If the Company is unable to repay all amounts owing to Triple Flag and Nebari, Nebari may realize on its security and the Company could lose its interest in the Gunnison Project.

Excelsior requires various permits in order to conduct its current and anticipated future operations, and any delays in obtaining or a failure to obtain such permits, or a failure to comply with the terms of any such permits that Excelsior has obtained or will obtain, could have a material adverse impact on Excelsior.

Excelsior's current and anticipated future operations, including further exploration, evaluation and development activities on the Gunnison Project, require permits from various United States federal, state, and local government authorities. Obtaining or renewing governmental permits is a complex and time-consuming process. The duration and success of efforts to obtain and renew permits are contingent upon many variables not within Excelsior's control.

Shortage of qualified and experienced personnel in the various levels of government could result in delays or inefficiencies. Backlog within the permitting agencies could affect the permitting timeline of the Gunnison Project. Other factors that could affect the permitting timeline include (i) the number of other large-scale projects currently in a more advanced stage of development which could slow down the review process for the Gunnison Project and (ii) significant public response regarding the Gunnison Project that could lead to delays in the process or appeals of issued permits. There can be no assurance that all permits which Excelsior requires for its development activities and construction of expanded mining facilities and the conduct of mining operations will be obtainable or renewable on reasonable terms, or at all. Delays or a failure to obtain such

permits, or the expiry, revocation or a failure to comply with the terms of any such permits that Excelsior has obtained, could have a material adverse impact on Excelsior.

Title and other rights to the Gunnison Project and the JCM cannot be guaranteed and may be subject to prior unregistered agreements, transfers or claims and other defects.

Excelsior cannot guarantee that title to the Gunnison Project or the JCM will not be challenged. Excelsior may not have, or may not be able to obtain, all necessary surface rights to develop, or all water rights needed to operate the Gunnison Project. Title insurance generally is not available for mineral properties and Excelsior's ability to ensure that it has obtained secure claim to individual mineral properties or mining concessions comprising the Gunnison Project and the JCM may be severely constrained; however, Excelsior JCM does have title insurance for the portions of the JCM that are patented mining claims and fee title property. The Gunnison Project and the JCM may be subject to prior unregistered agreements, transfers or claims, and title may be affected by, among other things, undetected defects. Excelsior has not conducted surveys of all of the claims in which it holds direct or indirect interests. A successful challenge to the precise area and location of these claims could result in Excelsior being unable to operate on all or part of the Gunnison Project or the JCM as permitted or being unable to enforce its rights with respect to all or part of the Gunnison Project or the JCM. Surface owners may also be able to obtain damages or an injunction that prevents continued mining operations at the Gunnison Project. These circumstances could result in a material adverse impact on Excelsior and Excelsior not being compensated for its prior expenditures relating to the properties.

Excelsior needs to enter into contracts with external service and utility providers.

Mining, processing, development and exploration activities depend, to one degree or another, on adequate infrastructure. In order to develop a mine at the Gunnison Project, Excelsior will need to negotiate, conclude and maintain various agreements with external service and utility providers for power, water, transportation and shipping and these are important determinants that affect capital and operating costs.

There is no certainty that Excelsior will be able to conclude or maintain various agreements with external service and utility providers on economically feasible terms and this could have a material adverse effect on Excelsior’s results of operations, financial position and cash flows and render the development of a mine on the Gunnison Project unviable.

Excelsior is subject to significant governmental regulation.

Excelsior’s operations and exploration and development activities in the United States are subject to extensive federal, state and local laws and regulation governing various matters, including environmental protection, management and use of toxic substances and explosives, management of natural resources, exploration, development of mines, production and post-closure reclamation, exports, price controls, taxation, mining royalties, management of tailing and other waste generated by operations, labour standards and occupational health and safety, including mine safety, and historic and cultural preservation.

Failure to comply with applicable laws and regulations may result in civil or criminal fines or penalties or enforcement actions, including orders issued by regulatory or judicial authorities enjoining or curtailing operations or requiring corrective measures, installation of additional equipment or remedial actions, any of which could result in Excelsior incurring significant expenditures. Excelsior may also be required to compensate private parties suffering loss or damage by reason of a breach of such laws, regulations or permitting requirements. It is also possible that future laws and regulations, or a more stringent enforcement of current laws and regulations by governmental authorities, could cause Excelsior to incur additional expense, capital expenditures, restrictions on or suspensions of Excelsior's operations and delays in the development of the Gunnison Project.

The Canadian Extractive Sector Transparency Measures Act (“ ESTMA ”), which became effective June 1, 2015, requires public disclosure of payments to governments by mining companies engaged in the commercial development of minerals who are either publicly listed in Canada or with business or assets in Canada. Mandatory annual reporting is required for extractive companies with respect to payments made to foreign and domestic governments at all levels, including entities established by two or more governments. ESTMA requires reporting on the payments of any taxes, royalties, fees, production entitlements, bonuses, dividends, infrastructure improvement payments, and any other prescribed payment over C$100,000. Failure to report, false reporting or structuring payments to avoid reporting may result in fines of up to C$250,000 (which may be concurrent). If we find ourselves subject to an enforcement action or in violation of ESTMA, this may result in significant penalties, fines and/or sanctions imposed on us resulting in a material adverse effect on our reputation.

Excelsior’s activities are subject to environmental laws and regulations that may increase Excelsior’s costs of doing business and restrict the Company’s operations.

All of Excelsior's exploration, potential development and production activities in the United States are subject to regulation by governmental agencies under various environmental laws, including with respect to, air emissions, discharges into water, management of waste, management of hazardous substances, protection of natural resources, antiquities and endangered species and reclamation of lands disturbed by mining operations. Environmental legislation, including with respect to climate change, in many countries is evolving and the trend has been towards stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and increasing responsibility for companies and their officers, directors and employees. Compliance with environmental laws and regulations may require significant capital outlays on behalf of Excelsior and may cause material changes or delays in Excelsior's intended activities. There can be no assurance that future changes in environmental regulations will not adversely affect Excelsior's business, and it is possible that future changes in these laws or regulations could have a significant adverse impact on some portion of Excelsior's business, causing Excelsior to re-evaluate those activities at that time. Failure to comply with applicable environmental laws, regulations and permitting requirements may result in enforcement actions thereunder, including orders issued by regulatory or judicial authorities, causing operations to cease or to be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment or remedial actions.

Environmental hazards may exist on the Gunnison Project or the JCM that are unknown to Excelsior at the present time and that have been caused by previous owners or operators or that may have occurred naturally. Excelsior may be liable for remediating such damage.

Climatic conditions can affect Excelsior future operations.

Arizona can be subject to periods of drought. Operations at the Gunnison Project and JCM will require water for normal operations. A lack of necessary water for a prolonged period of time could affect operations at the Gunnison Project and JCM, and materially adversely affect Excelsior’s results of operations. Arizona can also be subject to significant rainfall events which could result in flooding and materially adversely affect the Company’s results of operations.

Governments are moving to introduce climate change legislation and treaties at the international, national, state/provincial and local levels. The regulatory requirements are evolving and are not consistent across the jurisdictions in which we operate. However, regulation relating to emission levels (such as carbon taxes) and energy efficiency is becoming more stringent. If the current regulatory trend continues, we expect that this will result in increased costs at our operations. In addition, the physical risks of climate change may also have an adverse effect on our operations. These risks include the following:

Sea level rise: Changes in sea levels could affect ocean transportation and shipping facilities that are used to transport supplies, equipment to our operations and products from those operations to world markets.
Extreme weather events: Extreme weather events (such as increased frequency or intensity of hurricanes, increased snow pack, prolonged drought) have the potential to disrupt operations at our mine. Extended disruptions to supply lines could result in interruption to production.
Resource shortages: our facilities depend on regular supplies of consumables (stainless steel, copper cable, acid, etc.) and reagents to operate efficiently. In the event that the effects of climate change or extreme weather events cause prolonged disruption to the delivery of essential commodities, our production efficiency is likely to be reduced.

The occurrence of such physical climate change events may result in substantial costs to respond to the event or recover from the event, and to prevent recurrent damage, through either the modification of, or addition to, existing infrastructure at our operations. The scientific community has predicted an increase, over time, in the frequency and severity of extraordinary or catastrophic natural phenomena as a result of climate change. We can provide no assurance that we will be able to predict, respond to, measure, monitor or manage the risks posed as a result. Physical climate change events, and the trend toward more stringent regulations aimed at reducing the effects of climate change, could impact our decision to pursue future opportunities, or maintain our existing operations, which could have an adverse effect on our business and our future operations.

We can provide no assurance that efforts to mitigate the risks of climate changes will be effective and that the physical risks of climate change will not have an adverse effect on our operations and profitability.

Failure to provide regulatory authorities with the required financial assurances could potentially result in the closure of one or more of our operations, which could result in a material adverse effect on our operating results and financial condition.

We are required by regulatory authorities of the State of Arizona and United States Federal Government to provide financial assurances sufficient to allow a third party to implement approved closure and reclamation plans if we are unable to do so. These laws are complex and govern the determination of the scope and cost of the closure and reclamation obligations and the amount and forms of financial assurance.

The amount and nature of the financial assurances are dependent upon a number of factors, including our financial condition and reclamation cost estimates. Changes to these amounts, as well as the nature of the collateral to be provided, could significantly increase our costs, making the maintenance and development of existing and new mines less economically feasible. Regulatory authorities may also require further financial assurances. To the extent that the value of the collateral provided to the regulatory authorities is or becomes insufficient to cover the amount of financial assurance we are required to post, we would be required to replace or supplement the existing security with more expensive forms of security, which might include cash deposits, which would reduce our cash available for operations and financing activities. We can provide no assurance that we will be able to maintain or add to our current level of financial assurance or that we will have sufficient capital resources to further supplement our existing security, which could result in a material adverse effect on our operating results and financial condition.

Excelsior may experience difficulty attracting and retaining qualified management and technical personnel to meet the needs of its anticipated growth.

Excelsior is dependent on the services of key executives including Excelsior's Chief Executive Officer and Senior Vice Presidents, and other highly skilled and experienced executives and personnel focused on managing Excelsior's interests and the advancement of the Gunnison Project, and on identifying new opportunities for growth and funding. Due to Excelsior's relatively small size, the loss of these persons or

Excelsior’s inability to attract and retain additional highly skilled employees required for the development of Excelsior's activities may have a material adverse effect on Excelsior's business or future operations.

In addition, Excelsior anticipates that with the Gunnison Project commencing production and if appropriate, it acquires additional mineral rights, Excelsior will experience significant growth in its operations. Excelsior expects this growth to create new positions and responsibilities for management and technical personnel and to increase demands on its operating and financial systems. There can be no assurance that Excelsior will successfully meet these demands and effectively attract and retain additional qualified personnel to manage its anticipated growth. The failure to attract such qualified personnel to manage growth would have a material adverse effect on Excelsior's business, financial position, results of operations and cash flows.

Increased competition could adversely affect Excelsior's ability to attract necessary capital funding or acquire suitable producing properties or prospects for mineral exploration in the future.

The mining industry is intensely competitive. Significant competition exists for the acquisition of properties producing or capable of producing copper or other metals. Excelsior may be at a competitive disadvantage in acquiring additional mining properties because it must compete with other individuals and companies, many of which have greater financial resources, operational experience and technical capabilities than Excelsior. Excelsior also may encounter increasing competition from other mining companies in its efforts to hire experienced mining professionals. The Company's competitors may be able to respond more quickly to new laws or regulations or emerging technologies, or devote greater resources to the expansion of their operations, than the Company can. In addition, current and potential competitors may make strategic acquisitions or establish cooperative relationships among themselves or with third parties. Increased competition could adversely affect Excelsior's ability to attract necessary capital funding or to acquire suitable producing properties or prospects for mineral exploration in the future. If Excelsior is unsuccessful in acquiring additional mineral properties or services or qualified personnel it will not be able to grow at the rate it desires, or at all. The Company may not be able to compete successfully against current and future competitors, and any failure to do so could have a material adverse effect on the Company's business, financial condition or results of operations.

Excelsior may experience cybersecurity threats.

Excelsior relies on secure and adequate operations of information technology systems in the conduct of its operations. Access to and security of the information technology systems are critical to Excelsior’s operations. To Excelsior’s knowledge, it has not experienced any material losses relating to disruptions to its information technology systems. Excelsior has implemented ongoing policies, controls and practices to manage and safeguard Excelsior and its stakeholders from internal and external cybersecurity threats and to comply with changing legal requirements and industry practice. Given that cyber risks cannot be fully mitigated and the evolving nature of these threats, Excelsior cannot assure that its information technology systems are fully protected from cybercrime or that the systems will not be inadvertently compromised, or without failures or defects. Disruptions to Excelsior’s information technology systems, including, without limitation, security breaches, power loss, theft, computer viruses, cyber-attacks, natural disasters, and non-compliance by third party service providers and inadequate levels of cybersecurity expertise and safeguards of third party information technology service providers, may adversely affect the operations of Excelsior as well as present significant costs and risks including, without limitation, loss or disclosure of confidential, proprietary, personal or sensitive information and third party data, material adverse effect on its financial performance, compliance with its contractual obligations, compliance with applicable laws, damaged reputation, remediation costs, potential litigation, regulatory enforcement proceedings and heightened regulatory scrutiny.

Conflicts of interest may arise among the Company's directors and officers as a result of their involvement with, or shareholdings in, other mineral resource companies.

Certain of Excelsior's directors and officers also serve as directors or officers for, or have significant shareholdings in, other companies involved in natural resource exploration and development or mining-related activities. To the extent that such other companies may participate in ventures in which Excelsior may participate in, or in ventures which Excelsior may seek to participate in, its directors and officers may have a conflict of interest in negotiating and concluding terms respecting the extent of such participation. In all cases where the Company's directors and officers have an interest in other companies, such other companies may also compete with Excelsior for the acquisition of mineral property investments. Such associations may give rise to conflicts of interest for Excelsior's directors and officers resulting in a material and adverse effect on the Company’s profitability, results of operation and financial condition. As a result of these potential conflicts of interest, Excelsior may miss the opportunity to participate in certain transactions, which may have a material adverse effect on its financial position. The directors of the Company are required by law to act honestly and in good faith with a view to the best interests of the Company and its shareholders and to disclose any interest which they may have in any project or opportunity of the Company, but each officer or director has the identical obligation to other companies for which such officer or director serves as an officer or director.

Excelsior is exposed to exchange rate fluctuations because it raises funds in Canadian dollars and its costs are incurred in United States dollars.

Exchange rate fluctuations may affect the costs that Excelsior incurs in its operations. Excelsior has historically raised funds in Canadian dollars and its costs are incurred principally in United States dollars. Any appreciation of the US dollar against the Canadian dollar will reduce the purchasing power of each Canadian dollar raised, which could increase the risk that the Company would not be able to finance its operations and projects. The Company has assessed this risk and has not presently adopted an active currency hedging program given the current currency exchange rates.

Uncertainty exists related to inferred mineral resources.

Inferred Resources are estimated on the basis of limited geological evidence and sampling and while, by definition, it can reasonably be expected that a majority of inferred mineral resources referred to in this prospectus could be upgraded to indicated resources with further exploration, there is no assurance of such further exploration will take place, or that further exploration will result in the Company’s inferred resources being converted into measured or indicated mineral resources as there may be limited ability to assess geological continuity. Due to the uncertainty that may attach to inferred mineral resources, there is no assurance that inferred mineral resources will be upgraded to resources with sufficient geological continuity to constitute proven and probable mineral reserves as a result of continued exploration.

Land reclamation requirements for the Company’s mineral properties may be burdensome.

Land reclamation requirements are generally imposed on mineral exploration companies (as well as companies with mining operations) in order to minimize long term effects of land disturbance. Reclamation may include requirements to:

treat ground and surface water to drinking water standards;
control dispersion of potentially deleterious effluents; and
reasonably re-establish pre-disturbance land forms and vegetation.

In order to carry out reclamation obligations imposed on the Company in connection with exploration, development and production activities, Excelsior must allocate financial resources that might otherwise be spent on further exploration and development programs. In addition, regulatory changes could increase the Company's obligations to perform reclamation and mine closing activities. If the Company is required to carry out unanticipated reclamation work, its financial position could be adversely affected.

Risks inherent in the acquisition of new properties.

Excelsior may actively pursue the acquisition of exploration, development and production assets consistent with its acquisition and growth strategy. From time to time, Excelsior may also acquire securities of or other interests in companies with respect to which it may enter into acquisitions or other transactions. Acquisition transactions involve inherent risks, including but not limited to:

accurately assessing the value, strengths, weaknesses, contingent and other liabilities and potential
profitability of acquisition candidates;
ability to achieve identified and anticipated operating and financial synergies;
unanticipated costs;
diversion of management attention from existing business;
potential loss of key employees or key employees of any business acquired;
unanticipated changes in business, industry or general economic conditions that affect the
assumptions underlying the acquisition;
decline in the value of acquired properties, companies or securities;
assimilating the operations of an acquired business or property in a timely and efficient manner;
maintaining the Company’s financial and strategic focus while integrating the acquired business
or property;
implementing uniform standards, controls, procedures and policies at the acquired business, as
appropriate; and
to the extent that the Company makes an acquisition outside of markets in which it has previously
operated, conducting and managing operations in a new operating environment.

Acquiring additional businesses or properties could place increased pressure on the Company’s cash flow (if any) if such acquisitions involve a cash consideration. The integration of the Company’s existing operations with any acquired business will require significant expenditures of time, attention and funds. Achievement of the benefits expected from consolidation would require the Company to incur significant costs in connection with, among other things, implementing financial and planning systems. The Company may not be able to integrate the operations of a recently acquired business or restructure the Company’s previously existing business operations without encountering difficulties and delays. In addition, this integration may require significant attention from the Company’s management team, which may detract attention from the Company’s day-to-day operations. Over the short-term, difficulties associated with integration could have a material adverse effect on the Company’s business, operating results, financial condition and the price of the Common Shares. In addition, the acquisition of mineral properties may subject the Company to unforeseen liabilities, including environmental liabilities, which could have a material adverse effect on the Company. There can be

no assurance that any future acquisitions will be successfully integrated into the Company’s existing operations.

Any one or more of these factors or other risks could cause Excelsior not to realize the anticipated benefits of an acquisition of properties or companies, and could have a material adverse effect on its financial condition.

Excelsior may become subject to legal proceedings.

Due to the nature of its business, the Company may become subject to regulatory investigations, claims, lawsuits and other proceedings in the ordinary course of its business. The results of these legal proceedings cannot be predicted with certainty due to the uncertainty inherent in litigation, including the effects of discovery of new evidence or advancement of new legal theories, the difficulty of predicting decisions of judges and juries and the possibility that decisions may be reversed on appeal. There can be no assurances that these matters will not have a material adverse effect on the Company’s business.

Excelsior may be exposed to potential liabilities associated with the acquisition of JCM.

We conducted due diligence with respect to the JCM prior to our acquisition of such assets in December 2015; however, there is no certainty that our due diligence procedures revealed all of the risks and liabilities associated with the acquisition of JCM. There may be material environmental or other material liabilities that we are not aware of and, accordingly, the potential monetary cost of such liabilities is also unknown.

Failure to comply with the U.S. Foreign Corrupt Practices Act (“FCPA”), as well as the anti-bribery laws of the nations in which we conduct business (such as the Corruption of Foreign Public Officials Act of Canada (“CFPOA”)), could subject us to penalties and other adverse consequences.

Our business is subject to the FCPA which generally prohibits companies and company employees from engaging in bribery or other prohibited payments to foreign officials for the purpose of obtaining or retaining business. The FCPA also requires companies to maintain accurate books and records and internal controls, including at foreign-controlled subsidiaries. In addition, we are subject to other anti-bribery laws of the nations in which we conduct business that apply similar prohibitions as the FCPA (such as the CFPOA and the OECD Anti-Bribery Convention). Our employees or other agents may, without our knowledge and despite our efforts, engage in prohibited conduct under our policies and procedures and the FCPA or other anti-bribery laws that we may be subject to for which we may be held responsible. If our employees or other agents are found to have engaged in such practices, we could suffer severe penalties and other consequences that may have a material adverse effect on our business, financial condition and results of operations.

Legislative actions, potential new accounting pronouncements, and higher insurance costs are likely to impact our future financial position or results of operations.

Future changes in financial accounting standards may cause adverse, unexpected revenue fluctuations and affect our financial position or results of operations. New pronouncements and varying interpretations of pronouncements are expected to occur in the future. Compliance with changing regulations of corporate governance and public disclosure may result in additional expenses. All of these uncertainties are leading generally toward increasing insurance costs, which may adversely affect our business, results of operations and our ability to purchase any such insurance, at acceptable rates or at all, in the future.

A period of significant growth can place a strain on management systems.

If we experience a period of significant growth in the number of our personnel this could place a strain upon our management systems and resources. Our future will depend in part on the ability of our officers and other key employees to implement and improve our financial and management controls, reporting systems and

procedures on a timely basis and to expand, train and manage our employee workforce. There can be no assurance that we will be able to effectively manage such growth. Our failure to do so could have a material adverse effect upon our business, prospects, results of operation and financial condition.

Significant shareholders of the Company could influence our business operations and sales of our Common Shares by such significant shareholders could influence our Common Share price.

To the best knowledge of the Company, as of the date of hereof, Greenstone Resources, through its affiliates Greenstone, Greenstone II, Greenstone No. 1 and Greenstone No. 2, hold 116,028,937 Common Shares representing approximately 42.28% of our outstanding Common Shares. Greenstone has control over the passage of any resolution of our shareholders (such as would be required, to amend our constating documents or take certain other corporate actions).

Negative Operating Cash Flow.

Given that none of the Company’s properties have yet to enter commercial production and generate cash flow, the Company had negative operating cash flow for its financial year ended December 31, 2020. To the extent that the Company has negative cash flow in future periods, the Company may need to deploy a portion of its cash reserves to fund such negative cash flow.

Risks Related to our Securities

Future sales or issuances of debt or equity securities could decrease the value of any existing Common Shares, dilute investors’ voting power, reduce our earnings per share and make future sales of our equity securities more difficult.

We may sell or issue additional debt or equity securities in offerings to finance our operations, exploration, development, acquisitions or other projects. Our significant shareholders, including Greenstone may also sell the Common Shares they hold in the future.

We cannot predict the size of future sales and issuances of debt or equity securities or the effect, if any, that future sales and issuances of debt or equity securities will have on the market price of the Common Shares.

Sales or issuances of a substantial number of equity securities, or the perception that such sales could occur, may adversely affect prevailing market prices for the Common Shares. With any additional sale or issuance of equity securities, investors will suffer dilution of their voting power and may experience dilution in the Company’s earnings per share. Sales of our Common Shares by shareholders might also make it more difficult for us to sell equity securities at a time and price that we deem appropriate.

Our Common Share price has experienced volatility and may be subject to fluctuation in the future based on market conditions.

The market prices for the securities of mining companies, including our own, have historically been highly volatile. The market has from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of any particular company. In addition, because of the nature of our business, certain factors such as our announcements and the public’s reaction, our operating performance and the performance of competitors and other similar companies, fluctuations in the market prices of our resources, government regulations, changes in earnings estimates or recommendations by research analysts who track our securities or securities of other companies in the resource sector, general market conditions, announcements relating to litigation, the arrival or departure of key personnel and the factors listed under the heading “Special Note Regarding Forward-Looking Information” can have an adverse impact on the market price of our Common Shares.

Any negative change in the public’s perception of our prospects could cause the price of our securities, including the price of our Common Shares, to decrease dramatically. Furthermore, any negative change in the public’s perception of the prospects of mining companies in general could depress the price of our securities, including the price of our Common Shares, regardless of our results. Following declines in the market price of a company’s securities, securities class-action litigation is often instituted. Litigation of this type, if instituted, could result in substantial costs and a diversion of our management’s attention and resources.

Future issuances of securities by us or sales by our existing shareholders may cause the price of our securities to fall.

The market price of our securities could decline as a result of issuances of securities by us or sales by our existing shareholders in the market, or the perception that these sales could occur. Sales of our Common Shares by shareholders might also make it more difficult for us to sell equity securities at a time and price that we deem appropriate. With an additional sale or issuance of equity securities, investors will suffer dilution of their voting power and may experience dilution in earnings per share.

Excelsior does not intend to pay dividends in the foreseeable future.

No dividends on the Company’s Common Shares have been declared or paid by Excelsior to date. Excelsior does not currently anticipate that dividends will be declared in the foreseeable future. Payment of future dividends, if any, will be at the discretion of Excelsior's Board of Directors after taking into account many factors, including Excelsior's operating results, financial condition and current and anticipated cash needs.

Non-U.S. Holders of Common Shares could be subject to U.S. federal income tax from the sale or other taxable disposition of Common Shares.

It is possible that the Company will be considered a U.S. real property holding corporation for U.S. federal income tax purposes if its assets are determined to consist primarily of “United States real property interests” as defined in the Internal Revenue Code of 1986, as amended, or the Code, and applicable Treasury regulations. Under the Foreign Investment in Real Property Tax Act, or FIRPTA, certain Non-U.S. Holders may or may in the future be subject to U.S. federal income tax on any gain from the disposition of shares of our Common Shares, in which case they would also be required to file U.S. tax returns with respect to such gain. In general, whether these FIRPTA provisions apply depends on the amount of our Common Shares that such Non-U.S. Holders hold. In addition, such Non-U.S. Holders may or may in the future be subject to withholding if, at the time they dispose of their shares, our common stock is not regularly traded on an established securities market within the meaning of the applicable Treasury regulations. So long as our Common Shares continue to be regularly traded on an established securities market, only a Non-U.S. Holder who has owned, actually or constructively, more than 5% of our Common Shares at any time during the shorter of (i) the five-year period ending on the date of disposition and (ii) the Non-U.S. Holder’s holding period for its shares may or may in the future be subject to U.S. federal income tax on the disposition of our Common Shares under FIRPTA.

Withholding to Non-U.S. investors will apply to our dividends on our Common Shares.

Because we are a U.S. corporation for U.S. federal income tax purposes, a 30% withholding tax (subject to reduction under an applicable tax treaty) will generally apply to dividend distributions we make to non-U.S. persons. Because we may not know the extent to which a distribution is a dividend for U.S. federal income tax purposes at the time it is made, for purposes of these withholding rules we may treat the entire distribution as a dividend.

The Company expects that it will be treated as a U.S. domestic corporation for U.S. federal income tax purposes.

The Company believes that it should be treated as a U.S. domestic corporation for U.S. federal income tax purposes under Section 7874 of the U.S. Internal Revenue Code and be subject to U.S. tax on its worldwide income. Treatment of the Company as a U.S. corporation for U.S. federal income tax purposes may have adverse tax consequences for non-U.S. shareholders. Holders of the Company's Common Shares are urged to consult their own tax advisors regarding the acquisition, ownership and disposition of the Company's Common Shares. This paragraph is only a brief summary of these tax rules.

There is no assurance of a sufficient liquid trading market for the Company’s Common Shares in the future.

Shareholders of the Company may be unable to sell significant quantities of Common Shares into the public trading markets without a significant reduction in the price of their Common Shares, or at all. There can be no assurance that there will be sufficient liquidity of the Company’s Common Shares on the trading market, and that the Company will continue to meet the listing requirements of the TSX or achieve listing on any other public listing exchange.

DIVIDENDS

Excelsior has not, since the date of its incorporation, declared or paid any dividends on its Common Shares and does not currently have a policy with respect to the payment of dividends. For the immediate future, Excelsior does not envisage any earnings arising from which dividends could be paid. The payment of dividends in the future will depend on Excelsior’s earnings, if any, Excelsior’s financial condition and such other factors as the directors of Excelsior consider appropriate.

DESCRIPTION OF CAPITAL STRUCTURE

The authorized share capital of Excelsior consists of an unlimited number of Common Shares and an unlimited number of Non-Voting Shares. As of the date of this AIF, 274,419,834 Common Shares and no Non-Voting Shares were issued and outstanding as fully paid and non-assessable shares.

The holders of the Common Shares are entitled to receive notice of and to attend and vote at all meetings of the shareholders of Excelsior and each Common Share confers the right to one vote in person or by proxy at all meetings of the shareholders of Excelsior. The holders of the Common Shares, subject to the prior rights, if any, of any other class of shares of Excelsior, are entitled to receive such dividends in any financial year as the Board of Directors of Excelsior may by resolution determine. In the event of the liquidation, dissolution or winding-up of Excelsior, whether voluntary or involuntary, the holders of the Common Shares are entitled to receive, subject to the prior rights, if any, of the holders of any other class of shares of Excelsior, the remaining property and assets of the Company.

The Non-Voting Shares are restricted securities within the meaning of National Instrument 51-102. NonVoting Shares do not carry the right to vote at any meetings of the shareholders. Non-Voting shares may be converted at the option of the holder into Common Shares on the basis of one (1) Non-Voting Share for one (1) Common Share of Excelsior. As the Non-Voting Shares are convertible into Common Shares, pursuant to Multilateral Instrument 62-104, a take-over bid for the Common Shares must also be made to the holders of the Non-Voting Shares.

MARKET FOR SECURITIES

Market

Excelsior’s Common Shares are listed on the TSX under the trading symbol “MIN” and trade on the OTCQX International under the symbol “EXMGF” and on the Frankfurt Exchange under the symbol “3XS”.

Trading Price and Volume

The following table sets out the monthly high and low trading prices and the monthly volume of trading of the Common Shares of Excelsior on the TSX for the most recently completed financial year:

	High (Cdn$)	Low (Cdn$)
January 2020	1.23	0.94	3,717,384
February 2020	1.12	0.71	4,523,075
March 2020	0.88	0.42	4,848,171
April 2020	0.63	0.42	1,861,101
May 2020	0.74	0.55	1,329,360
June 2020	0.79	0.60	2,695,245
July 2020	0.85	0.64	1,640,642
August 2020	0.87	0.72	1,105,786
September 2020	0.82	0.63	1,331,603
October 2020	0.70	0.60	849,526
November 2020	1.03	0.62	2,706,001
December 2020	1.19	0.96	2,459,878

Prior Sales

The following summarizes the Common Shares issued by Excelsior during the most recently completed financial year.

		Number of Securities	Price per Share / Exercise Price ($)
January 24, 2020	Common Shares issued pursuant to the exercise of stock options	10,084	1.11
January 28, 2020	Common Shares issued pursuant to the exercise of stock options	31,250	1.12
November 16, 2020	Common Shares issued pursuant to the exercise of stock options	100,000	0.23
December 21, 2020	Common Shares issued pursuant to the exercise of stock options	5,173	0.92
December 23, 2020	Common Shares issued pursuant to the exercise of stock options	500,000	0.23

ESCROWED SECURITIES AND SECURITIES SUBJECT TO CONTRACTUAL RESTRICTION ON TRANSFER

As at December 31, 2020, Excelsior has no escrowed securities or securities subject to contractual restriction on transfer.

DIRECTORS AND OFFICERS

The names and provinces or states and countries of residence of the directors and officers of Excelsior as at December 31, 2020, positions held by them with Excelsior and their principal occupations for the past five years are as set forth below. The term of office of each of the present directors expires at the next annual general meeting of shareholders. After each such meeting, the Board of Directors appoints the Company’s officers and committees for the ensuing year.

Name, Province or State and Country of Ordinary Residence of Nominee(1) and Present Positions with Excelsior	Principal Occupation during the last Five Years(1)	Period from which person has been a Director or Officer	Number of Common Shares Held(2)
Mark Morabito(4) Director, Chairman British Columbia, Canada	Chairman and Chief Executive Officer of King & Bay West Management Corp. since December 2009.	April 4, 2007	2,467,527
Stephen Twyerould(5) Director, President, CEO Arizona, USA	President and Chief Executive Officer of Excelsior since October 14, 2010.	October 14, 2010	5,116,345
Fred DuVal(3) Director Arizona, USA	President of DuVal and Associates since 2001.	June 28, 2018	Nil
Colin Kinley(5) Director Kansas, USA	Currently Director and Senior Advisor, President and CEO of Kinley Exploration LLC from 2007 to present; Director; COO of Eco Oil and Gas Ltd. from 2011 to present; President CEO of Manx Energy Inc. 2009 to present.	October 14, 2010	352,258
Jim Kolbe(3) Director Arizona, USA	President, JTK Consulting, Inc.	February 15, 2012	329,258
Stephen Axcell(5) Director Colorado, USA	Independent Consultant providing services to the Mining Industry.	August 20, 2018	Nil

Michael Haworth(3)(5)(6) Director United Kingdom	Managing Partner with Greenstone Capital LLP since August, 2013.	September 9, 2014	Nil
Lord Robin Renwick(4) Director United Kingdom	Director, Stonehage Fleming since August 2000.	October 20, 2014	311,640
Roland Goodgame Chief Operating Officer Colorado, USA	Senior Vice President, Business Development of the Company since December, 2020; Senior Vice President from November, 2020 to December, 2020; Chief Operating Officer from April, 2017 to November, 2020; Executive Vice President of Excelsior from May, 2014 to April, 2017.	October 14, 2010	1,998,719
Greg Duschek(7) Senior Vice President & Chief Financial Officer Arizona, USA	Senior Vice President & Chief Financial Officer of the Company since December 23, 2020; Interim Chief Financial Officer of the Company from May 5, 2020 to December 23, 2020; General Manager of the Company from April 2018 to May 5, 2020; Site Controller of the Company from September 2017 to April 2018; Site Controller at Kinross Gold from May 2013 to September 2017.	May 5, 2020	Nil
JJ Jennex VP Corporate Affairs British Columbia, Canada	Corporate Communications Consultant to the Company since July, 2018; Strategic Advisor, King & Bay West Management Corp. from May 2010 to June, 2018.	April 25, 2011	339,459
Robert Winton	General Manager & Senior Vice President Operations of the Company since August, 2020; President & General Manager of Nystar Clarksville Inc. from January 2018 to August 2020; Vice President, MBU of Hudbay Minerals Inc. from September 1997 to June 2016	August 24, 2020	Nil
Sheila Paine Corporate Secretary British Columbia, Canada	Corporate Secretary of King & Bay West Management Corp. since December 2009.	May 17, 2010	Nil

(1) The information as to city and province of residence and principal occupation, not being within the knowledge of Excelsior, has been furnished by the respective directors individually.

(2) Common Shares beneficially owned, directly and indirectly, or over which control or direction is exercised, at the date hereof, based upon the information furnished to Excelsior by individual directors and officers. Unless otherwise indicated, such Common

Shares are held directly. These figures do not include Common Shares that may be acquired on the exercise of any stock options held by the respective directors or officers.

(3) Current Member of the Audit Committee of Excelsior.
(4) Current Member of the Compensation, Nominating and Corporate Governance Committee of Excelsior.
(5) Current Member of the Project Steering Committee of Excelsior.
(6) Michael Haworth is a Managing Member of Greenstone Capital LLP and a Director of Greenstone Management Ltd., the General Partner to Greenstone Resources. Greenstone Resources, through its affiliates Greenstone, Greenstone II, Greenstone No. 1 and Greenstone No. 2, is the beneficial owner of 116,028,937 Common Shares representing approximately 42.28% of the issued and outstanding Common Shares
(7) Effective May 5, 2020, Mr. Duschek was appointed Interim Chief Financial Officer to replace Mr. Roger Baer who served as Interim Financial Officer. Mr. Baer was appointed Interim Chief Financial Officer effective February 28, 2020 to replace Mr. Barry Dahl who resigned as Chief Financial Officer effective February 28, 2020. Mr. Duschek was appointed Senior Vice President & Chief Financial Officer effective December 23, 2020.

As of December 31, 2020, the directors, nominees, officers and other members of Management of Excelsior, as a group beneficially owned, directly or indirectly, 10,915,202 Common Shares of Excelsior representing 3.98% of the total issued and outstanding Common Shares of Excelsior.

Cease Trade Orders, Bankruptcies, Penalties or Sanctions

No director or executive officer of Excelsior is, or has been in the last 10 years, a director, chief executive officer or chief financial officer of any company (including Excelsior) of an issuer that, while that person was acting in that capacity,

(a) was the subject of a cease trade order or similar order or an order that denied the issuer access to any exemptions under Canadian securities legislation, for a period of more than 30 consecutive days; or
(a) was subject to an event that resulted, after that person ceased to be a director, chief executive officer or chief financial officer, in the company being the subject of a cease trade or similar order or an order that denied the issuer access to any exception under Canadian securities legislation, for a period of more than 30 consecutive days.

Except as disclosed below, no director or executive officer or shareholder holding a sufficient number of securities of Excelsior to materially affect the control Excelsior:

(a) is, as at the date of this AIF, or has been within the 10 years before the date of this AIF, a director or executive officer of any company (including Excelsior) that while that person was acting in that capacity, or within a year of that person ceasing to act in the capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold its assets; or
(b) has, within 10 years before the date of this AIF become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director, executive officer or shareholder.

No director or officer of Excelsior or a shareholder holding a sufficient number of Common Shares to affect materially the control of Excelsior has been subject to:

(a) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or

(c) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision.

By Order of the Supreme Court of Newfoundland and Labrador (the “Court”) dated June 17, 2020, Deloitte Restructuring Inc. (“Deloitte”) was appointed as the receiver and manager (the “Receiver”) of all current and future assets, undertakings, and properties of the Kami Mine Limited Partnership, Kami General Partner Limited, and Alderon Iron Ore Corp. The receivership was initiated by a secured creditor of the Kami Mine Limited Partnership after its failure to refinance the secured debt due to the COVID-19 pandemic. Mr. Morabito was a Director of Alderon Iron Ore Corp. and a Director of Kami General Partner Limited until March 24, 2020.

Conflicts of Interest

Certain directors and officers of Excelsior are also directors, officers or shareholders of other companies that are similarly engaged in the business of acquiring, developing and exploiting natural resource properties. Such associations to other public companies in the resource sector may give rise to conflicts of interest from time to time. As a result, opportunities provided to a director of Excelsior may not be made available to Excelsior, but rather may be offered to a company with competing interests. The directors and senior officers of Excelsior are required by law to act honestly and in good faith with a view to the best interests of Excelsior and to disclose any personal interest which they may have in any project or opportunity of Excelsior, and to abstain from voting on such matters.

The directors and officers of Excelsior are aware of the existence of laws governing the accountability of directors and officers for corporate opportunity and requiring disclosure by the directors of conflicts of interests and Excelsior will rely upon such laws in respect of any directors’ and officers’ conflicts of interest or in respect of any breaches of duty by any of its directors and officers.

Michael Haworth is a Managing Member of Greenstone Capital LLP and a Director of Greenstone Management Ltd., the General Partner to Greenstone Resources. Mr. Haworth has disclosed to Excelsior that he has an interest in any transaction between the Company and Greenstone Resources, Greenstone, Greenstone II, Greenstone No. 1 or Greenstone No. 2.

LEGAL PROCEEDINGS AND REGULATORY ACTIONS

During the most recently completed financial year, (i) no penalties or sanctions were imposed against the Company by a court or regulatory body and (ii) no settlement agreements were entered into by the Company with a court or a securities regulatory authority. Except as disclosed below, the Company and its properties are not subject to any legal or other actions, current or pending, which may materially affect the Company’s operating results, financial position or property ownership.

On June 24, 2020, Hydro Resources Holdings, Inc. and its affiliates (the “Plaintiffs”) filed suit in Texas District Court against the Company, Kinley Exploration LLC and Roland Goodgame to recover unpaid amounts related to drilling services that were provided to the Company. The Company disputed the Texas action and all claims and causes of action were dismissed on December 7, 2020. Subsequent to year end, on January 7, 2021, the Plaintiffs refiled suit in the Superior Court of Arizona against the Company and Kinley Exploration LLC seeking to recover the unpaid amounts ($2.167 million exclusive of interest and costs) related to drilling services that were provided to the Company. The Company is disputing this action and the amounts payable to the Plaintiffs and believes that the Company will ultimately prevail. The Company filed a Motion to Dismiss the Arizona matter on March 4, 2021.

PROMOTERS

No person has acted as a promoter of Excelsior during the last two most recently completed financial years or during the current financial year.

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

Other than as set forth below and other than transactions carried out in the ordinary course of business of the Company, none of the directors or executive officers of Excelsior, any shareholder directly or indirectly beneficially owning, or exercising control or direction over, more than 10% of the outstanding Common Shares, nor an associate or affiliate of any of the foregoing persons has had, during the three most recently completed financial years of the Company or during the current financial year, any material interest, direct or indirect, in any transactions that materially affected or would materially affect the Company.

Greenstone Resources, through its affiliates Greenstone, Greenstone II, Greenstone No. 1 and Greenstone No. 2, is the beneficial owner of 116,028,937 Common Shares representing approximately 42.28% of the issued and outstanding Common Shares. Mr. Haworth is a Managing Member of Greenstone Capital LLP and a Director of Greenstone Management Ltd., the General Partner to Greenstone Resources. The details of Greenstone’s strategic investments in Excelsior are described under “Glossary”, “Description and General Development of the Business – Three Year History – Year Ended December 31, 2018 Developments –Closing of the Second Tranche of the 2017 Offering” and “Description and General Development of the Business – Three Year History – Year Ended December 31, 2018 Developments –2018 Greenstone Financing”.

TRANSFER AGENT AND REGISTRAR

Excelsior’s registrar and transfer agent is TSX Trust Company. with its office located at 2700 – 650 West Georgia Street, Vancouver, British Columbia, V6B 4N9.

MATERIAL CONTRACTS

The Company has entered into the following material contracts:

(a) Definitive Agreement, as amended, as described in this AIF under “Glossary”.
(b) Management Services Agreement dated as of May 17, 2010 between King & Bay West Management Corp. (“ King & Bay West ”) and the Company pursuant to which King & Bay West provides the Company with administrative and management services, including shared facilities, geological, technical, accounting, investor relations, legal and corporate development services. The fees for these management services are determined and allocated to the Company based on the cost or value of the services provided to the Company as determined by King & Bay West, and the Company reimburses King & Bay West for such costs on a monthly basis.
(c) Altius Agreement, as described in this AIF under “Glossary”.
(d) Greenstone IR Agreement as described in this AIF under “Glossary”.
(e) JCM Purchase Agreement as described in this AIF under “Glossary”
(f) Amending Agreement to the Greenstone IR Agreement dated January 19, 2018 between the Company, Greenstone and Greenstone No. 2 pursuant to which certain rights granted to Greenstone under the Greenstone IR Agreement were amended to permit the joint or several exercise by Greenstone and Greenstone No. 2.

(g) Second Amending Agreement to the Greenstone IR Agreement dated December 5, 2018 between the Company, Greenstone, Greenstone II, Greenstone No. 1 and Greenstone No.2 pursuant to which certain rights granted to Greenstone and Greenstone No. 2 under the Amending Agreement to the Greenstone IR Agreement were amended to permit the joint or several exercise by Greenstone, Greenstone II, Greenstone No. 1 and Greenstone No. 2.
(h) Stream Agreement, as amended, as described in this AIF under “Glossary” and “Description and General Development of the Business – Three Year History – Year Ended December 31, 2018 Developments – Project Financing Package”.
(i) Nebari Credit Agreement as described in this AIF under “Glossary” and “Description and General Development of the Business – Three Year History – Year Ended December 31, 2019 Developments – Nebari Credit Facility”.
(j) Underwriting Agreement dated February 12, 2021 between the Company, Scotia Capital Inc. and PI Financial Corp. pursuant to which the 2021 Offering was completed, as described in this AIF under Description and General Development of the Business – Three Year History – Developments Subsequent to December 31, 2020 and Outlook – Bought Deal Financing”.
(k) Warrant Indenture dated February 22, 2021 between the Company and TSX Trust Company governing the terms of the 2021 Warrants, as described in this AIF under Description and General Development of the Business – Three Year History –Developments Subsequent to December 31, 2020 and Outlook – Bought Deal Financing”.

INTEREST OF EXPERTS

The disclosure with respect to the Gunnison Project contained in this AIF is based on the Technical Report jointly prepared by Richard Zimmerman, SME-RM; Michael M. Gustin, P.G., Ph.D.; Dr. Ronald J. Roman, P.E., D.Sc.; Neil Prenn, MMSA-QPM; R. Douglas Bartlett, R.G.; and Thomas Drielick, P.E., each a qualified person as defined in NI 43-101. Each of Messrs. Zimmerman, Gustin, Roman, Prenn, Bartlett and Drielick has reviewed and approved the scientific and technical disclosure with respect to the Gunnison Project contained in this AIF under the heading “Mineral Properties”, except for the section titled “Additional Information”. The remainder of scientific and technical disclosure contained in this AIF has been reviewed and approved by Stephen Twyerould, Fellow of AUSIMM, President & CEO of Excelsior and a Qualified Person as defined by NI 43-101.

To the best knowledge of the Company, except for Mr. Twyerould, none of the qualified persons referenced above, or any director, officer, employee or partner thereof, as applicable, received or has received a direct or indirect interest in the property of the Company or of any associate or affiliate of the Company. As at the date hereof, the aforementioned persons (except for Mr. Twyerould), and the directors, officers, employees and partners, as applicable, of each of the aforementioned companies and partnerships beneficially own, directly or indirectly, in the aggregate, less than one percent of the securities of Excelsior. Except for Mr. Twyerould, none of the qualified persons referenced above is or is expected to be elected, appointed or employed as a director, officer or employee of the Company or any associate or affiliate of the Company. Mr. Twyerould is the President & CEO of the Company and information as to his ownership of securities of the Company is set forth under the heading “Directors and Officers” in this AIF.

The Company’s auditors are PricewaterhouseCoopers LLP, Chartered Professional Accountants, who have prepared an independent auditor’s report dated March 24, 2021 in respect of the Company’s consolidated financial statements as at December 31, 2020 and 2019 and for years then ended. PricewaterhouseCoopers LLP has advised that they are independent with respect to the Company within the meaning of the Chartered Professional Accountants of British Columbia Code of Professional Conduct.

ADDITIONAL INFORMATION

Additional information on the Company may be found on SEDAR at www.sedar.com. Additional information, including directors’ and officers’ remuneration and indebtedness to Excelsior, principal holders of the securities of Excelsior and securities authorized for issuance under equity compensation plans, is contained in Excelsior’s management information circular for its most recent annual general meeting, which is filed on SEDAR. Additional financial information is provided in Excelsior’s audited consolidated financial statements for the year ended December 31, 2020 and the related management’s discussion and analysis of financial conditions and results of operations, both of which are available on SEDAR.

AUDIT COMMITTEE

Pursuant to the provisions of National Instrument 52-110 Audit Committees (“ NI 52-110 ”), reporting issuers are required to provide disclosure with respect to its audit committee, including the text of the audit committee’s charter, composition of the committee, and the fees paid to the external auditor. Accordingly, the Company provides the following disclosure with respect to its Audit Committee.

Audit Committee Charter

Excelsior has adopted a Charter of the Audit Committee of the Board of Directors, which is attached as Schedule A to this AIF.

Composition of the Audit Committee

Excelsior’s Audit Committee is comprised of three directors Jim Kolbe, Michael Haworth and Fred DuVal. As defined in NI 52-110, Messrs. Kolbe and DuVal are considered “independent” and are “financially literate”. Mr. Haworth is “financially literate”; however, as a nominee of Greenstone Resources he is not considered “independent”.

Relevant Education and Experience

All of the members of the Audit Committee are senior level executive business persons with extensive experience in financial matters; each has a broad understanding of accounting principles used to prepare financial statements and varied experience as to general application of such accounting principles, as well as the internal controls and procedures necessary for financial reporting, garnered from working in their individual fields of endeavour. In addition, each of the members of the Audit Committee have knowledge of the role of an audit committee in the realm of reporting companies from their years of experience as directors and/or senior officers of public companies other than Excelsior.

Mr. Kolbe is a veteran Republican member of the U.S. House of Representatives for Arizona’s 8th congressional district, having retired after serving 11 terms from 1985 to 2007. During his tenure as congressman, Mr. Kolbe served as chair of the Subcommittee on Foreign Operations, Export Financing and Related Programs of the House Appropriations Committee. After retiring from office, Mr. Kolbe was appointed to the Advisory Committee for Trade Policy and Negotiations in September of 2010. Currently Mr. Kolbe is a fellow at the German Marshall Fund, as well as a consultant for McLarty Associates, a strategic advisory and advocacy firm, offering high-level strategic consultancy services to a broad spectrum of U.S. and multinational companies. Throughout his distinguished career, Mr. Kolbe has participated as a member of the audit committee of various entities. Mr. Kolbe obtained a Bachelor of Arts in Political Science from Northwestern University in 1965 and an M.B.A. in Economics from Stanford University in 1967.

Mr. Haworth co-founded Greenstone Resources in 2013 after a 16 year career in the mining sector. Mr. Haworth, with his co-founder, oversees all aspects of the management of Greenstone Resources. He also services as a director of Greenstone Management Ltd., Greenstone Resource’s General Partner and is a member

and co-Chairman of Greenstone Resources’ Investment Committee. Prior to founding Greenstone Resources, Mr. Haworth founded and is a director of Ncondezi Energy Limited (AIM). Until 2006 he held the positions of Managing Director and Head of Mining and Metals Corporate Finance of JP Morgan in London, United Kingdom. Mr. Haworth obtained a Bachelor of Commerce from University of Witwatersrand, South Africa in 1988 and his Chartered Accountant designation from the South African Institute of Chartered Accountants in 1992. Mr. Haworth is a non-practicing Chartered Accountant.

Mr. DuVal is currently a consultant to many American businesses, and a member of Dentons Law, the largest law firm in the world. He is also a senior advisor to Macquarie Infrastructure on public-private partnerships. Mr. DuVal was the Democratic nominee for Governor of Arizona in 2014 and served as Chairman of the Arizona Board of Regents and on the Arizona Commerce Commission. Mr. DuVal was Chief of Protocol of the United States, Assistant to President Clinton in the White House and responsible for all Governors and state issues; he was also the Political Director for Vice President Al Gore. Mr. DuVal obtained a Bachelor of Arts, Luce Scholar for International Studies from Occidental College in 1976 and his J.D. from Arizona State University in 1980.

Reliance on Certain Exemptions

At no time since the commencement of the Company’s most recently completed financial year, has the Company relied on any of the exemptions contained in the following sections of NI 52-110: section 2.4 ( De Minimis Non-audit Services ), section 3.2 ( Initial Public Offerings ), section 3.4 ( Events Outside Control of Member ), section 3.5 ( Death, Disability or Resignation of Audit Committee Member ) or an exemption from NI 52-110, in whole or in part, granted under Part 8 ( Exemptions ) of NI 52-110.

Reliance on Exemption in Subsection 3.3(2) or Section 3.6

As a result of Michael Haworth being a Managing Member of Greenstone Capital LLP and a Director of Greenstone Management Ltd., the General Partner to Greenstone Resources, the Company is relying on the exemption contained in subsection 3.3(2) ( Controlled Companies ) of NI 52-110. Neither Greenstone Capital LLP nor Greenstone Management Ltd. have securities trading on a marketplace. Mr. Haworth’s background as a Chartered Accountant allows him to provide valuable oversight and analysis as a member of the Audit Committee. Mr. Haworth is also able to exercise the impartial judgement necessary for him to fulfill his responsibilities as an Audit Committee member, and his appointment is required by the best interests of the Company and its shareholders.

At no time since the commencement of the Company’s most recently completed financial year, has the Company relied on the exemptions contained section 3.6 ( Temporary Exemption for Limited and Exceptional Circumstances ) of NI 52-110.

Reliance on Section 3.8

At no time since the commencement of the Company’s most recently completed financial year, has the Company relied on section 3.8 ( Acquisition of Financial Literacy ) of NI 52-110.

Audit Committee Oversight

At no time since the commencement of the Company’s most recently completed financial year, has the Company’s Board of Directors failed to adopt a recommendation of the Audit Committee to nominate or compensate an external auditor.

Pre-Approval Policies and Procedures

Pursuant to the terms of the Company’s Audit Committee Charter, the Audit Committee is required to review and pre-approve any non-audit services provided by the Company’s external auditors. The Audit Committee has adopted a written Audit Committee Pre-Approval Policy with respect to audit and non-audit services to be performed by the Company’s external auditors. The Audit Committee will pre-approve all audit services provided by the external auditor through their recommendation of the external auditor as shareholders’ auditors at the Company’s annual meeting and through the Audit Committee’s review of the external auditor’s annual audit plan. The Audit Committee Chair may pre-approve a request for non-audit services where the aggregate fees are estimated to be less than or equal to $50,000 but the Chair must advise other Audit Committee members of such pre-approval no later than the next regularly scheduled Audit Committee meeting. For nonaudit services where the aggregate fees are estimated to be greater than $50,000, the approval of the full Audit Committee is required. In no event can the external auditor undertake non-audit services prohibited by legislation or professional standards.

External Auditor Service Fees

In the following table, “audit fees” are fees billed by Excelsior’s external auditor for services provided in auditing Excelsior’s annual financial statements for the subject year and include audits of its subsidiaries and interim reviews of quarterly financial statements.

“Audit-related fees” are fees not included in audit fees that are billed by the auditor for assurance and related services that are reasonably related to the performance of the audit or review of Excelsior’s financial statements. During the Company’s fiscal years ended December 31, 2020 and December 31, 2019, there were no fees billed in this category.

“Tax fees” are fees billed by the auditor for professional services rendered for tax compliance, tax advice, corporate acquisitions, corporate reorganization and structuring. For the fiscal years ended December 31, 2020 and December 31, 2019 these fees related to Canadian and US tax compliance services, general tax consultations on matters related to Federal, Provincial, Payroll, Sales and US taxes.

“All other fees” are fees billed by the auditor for products and services not included in the foregoing categories.

The fees paid by Excelsior to its auditor during the Company’s fiscal years ended December 31, 2020 and December 31, 2019, by category, are as follows:

Year Ended	Audit Fees	Audit Related Fees	Tax Fees	All Other Fees
December 31, 2020	US$160,095	Nil	US$22,610	Nil
December 31, 2019	US$129,198	Nil	US$71,710	Nil

SCHEDULE A

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AUDIT COMMITTEE CHARTER

As of March 25, 2019

The following Audit Committee Charter was adopted by the Audit Committee of the Board of Directors and the Board of Directors of Excelsior Mining Corp. (the “Company”):

Mandate

The primary function of the audit committee (the “Committee”) is to assist the Company’s Board of Directors in fulfilling its financial oversight responsibilities by reviewing the financial reports and other financial information provided by the Company to regulatory authorities and shareholders, the Company’s systems of internal controls regarding finance and accounting and the Company’s auditing, accounting and financial reporting processes. Consistent with this function, the Committee will encourage continuous improvement of, and should foster adherence to, the Company’s policies, procedures and practices at all levels. The Committee’s primary duties and responsibilities are to:

serve as an independent and objective party to monitor the Company’s financial reporting and internal control system and review the Company’s financial statements;
review and appraise the performance of the Company’s external auditors; and
provide an open avenue of communication among the Company’s auditors, financial and senior management and the Board of Directors.

Composition

The Committee shall be comprised of a minimum three directors as determined by the Board of Directors, all of whom shall be free from any relationship that, in the opinion of the Board of Directors, would interfere with the exercise of his or her independent judgment as a member of the Committee.

All members of the Committee shall have accounting or related financial management expertise. All members of the Committee who are not financially literate will work towards becoming financially literate to obtain a working familiarity with basic finance and accounting practices. For the purposes of this Audit Committee Charter, the definition of “financially literate” is the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can presumably be expected to be raised by the Company's financial statements.

The members of the Committee shall be elected by the Board of Directors at its first meeting following the annual shareholders’ meeting. Unless a Chair is elected by the full Board of Directors, the members of the Committee may designate a Chair by a majority vote of the full Committee membership. The position description and responsibilities of the Chair are set out in Schedule “A” attached hereto.

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Meetings

The Committee shall meet a least quarterly , or more frequently as circumstances dictate. As part of its job to foster open communication, the Committee will meet at least annually with the Chief Financial Officer and the external auditors in separate sessions. The Committee may ask members of management of the Company or others to attend meetings or to provide information as necessary.

Quorum for the transaction of business at any meeting of the Committee shall be a majority of the number of members of the Committee or such greater number as the Committee shall by resolution determine.

Meetings of the Committee shall be held from time to time as the Committee or the Chair shall determine upon 48 hours’ notice to each of its members. The notice period may be waived by unanimous resolution of the Committee.

The Committee shall keep minutes of its meetings which shall be submitted to the Board. The Committee may, from time to time, appoint any person who need not be a member, to act as a secretary at any meeting.

Any matters to be determined by the Committee shall be decided by a majority of votes cast at a meeting of the Committee called for such purpose. Actions of the Committee may be taken by an instrument or instruments in writing signed by all of the members of the Committee, and such actions shall be effective as though they had been decided by a majority of votes cast at a meeting of the Committee called for such purpose. The Committee shall report its determinations to the Board at the next scheduled meeting of the Board, or earlier as the Committee deems necessary.

Responsibilities and Duties

To fulfill its responsibilities and duties, the Committee shall:

1. Documents/Reports Review

(a) review and update this Audit Committee Charter as required; and
(b) review the Company's financial statements, MD&A and any annual and interim earnings press releases before the Company publicly discloses this information and any financial reports or other financial information (including quarterly financial statements), which are submitted to any governmental body, or to the public, including any certification, report, opinion, or review rendered by the external auditors.

2. External Auditors

(a) review annually, the performance of the external auditors who shall be ultimately accountable to the Company’s Board of Directors and the Committee as representatives of the shareholders of the Company;
(b) obtain annually, a formal written statement of external auditors setting forth all relationships between the external auditors and the Company, consistent with the professional standards for the external auditors;
(c) review and discuss with the external auditors any disclosed relationships or services that may impact the objectivity and independence of the external auditors;

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(d) take, or recommend that the Company’s full Board of Directors take appropriate action to oversee the independence of the external auditors, including the resolution of disagreements between management and the external auditor regarding financial reporting;
(e) recommend to the Company’s Board of Directors the selection and, where applicable, the replacement of the external auditors nominated annually for shareholder approval;
(f) recommend to the Company’s Board of Directors the compensation to be paid to the external auditors;
(g) at each meeting, consult with the external auditors, without the presence of management, about the quality of the Company’s accounting principles, internal controls and the completeness and accuracy of the Company's financial statements;
(h) review and approve the Company's hiring policies regarding partners, employees and former partners and employees of the present and former external auditors of the Company;
(i) review with management and the external auditors the audit plan for the year-end financial statements and intended template for such statements; and
(j) review and pre-approve all audit and audit-related services, and any non-audit services, and the fees and other compensation related thereto provided by the Company’s external auditors in accordance with the Audit Committee Pre-Approval Policy.

3. Financial Reporting Processes

(a) in consultation with the external auditors, review with management the integrity of the Company's financial reporting process, both internal and external;
(b) consider the external auditors’ judgments about the quality and appropriateness of the Company’s accounting principles as applied in its financial reporting;
(c) consider and approve, if appropriate, changes to the Company’s accounting principles and practices as suggested by the external auditors and management;
(d) review significant estimates and judgments made by management in the preparation of the financial statements and the view of the external auditors as to appropriateness of such estimates and judgments;
(e) following completion of the annual audit, review separately with management and the external auditors any significant difficulties encountered during the course of the audit, including any restrictions on the scope of work or access to required information;
(f) review any significant disagreement among management and the external auditors in connection with the preparation of the financial statements;
(g) review with the external auditors and management the extent to which changes and improvements in financial or accounting practices have been implemented;
(h) review any complaints or concerns about any questionable accounting, internal accounting controls or auditing matters;

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(i) establish a procedure for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters;
(j) establish a procedure for the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters; and
(k) review with management the Chief Executive Officer and Chief Financial Officer certificates prepared in connection with the annual and interim continuous disclosure regulatory filings.

4. Other Responsibilities

(a) review and approve any related-party transactions;
(b) the Committee shall perform any other activities consistent with this Audit Committee Charter and governing law, as the Committee or the Board deems necessary or appropriate.

Authority

The Committee shall have the authority to:

(a) engage independent counsel and other advisors including accounting or other consultants or experts as it determines necessary to carry out its duties;
(b) set and pay the compensation for advisors employed by the Committee;
(c) communicate directly with the external auditors;
(d) access, on an unrestricted basis, the books and records of the Company; and
(e) conduct any investigation appropriate to its responsibilities, and it may request the external auditors, as well as any officer of the Company, or outside counsel for the Company, to attend a meeting of the Committee or to meet with any members of, or advisors to, the Committee;
(f) the Committee shall have the authority to engage the external auditors to perform a review of the interim financial statements.

SCHEDULE “A”

Position Description for the Chair of the Audit Committee

I. Purpose

The Chair of the Audit Committee of the Board shall be a director who is elected by the Board to act as the leader of the Committee in assisting the Board in fulfilling its financial reporting and control responsibilities to the shareholders of the Company.

II. Who may be Chair

The Chair will be selected from amongst the directors of the Company who have a sufficient level of financial sophistication and experience in dealing with financial issues to ensure the leadership and effectiveness of the Committee.

III. Responsibilities

The following are the primary responsibilities of the Chair:

chairing all meetings of the Committee in a manner that promotes meaningful discussion;
ensuring adherence to this Audit Committee Charter and that the adequacy of it is reviewed as required;
providing leadership to the Committee to enhance the Committee’s effectiveness, including:
providing the information to the Board relative to the Committee’s issues and initiatives and reviewing and submitting to the Board an appraisal of the Company’s independent auditors and internal auditing functions;
ensuring that the Committee works as a cohesive team with open communication, as well as ensuring open lines of communication among the independent auditors, financial and senior management and the Board of Directors for financial and control matters;
ensuring that the resources available to the Committee are adequate to support its work and to resolve issues in a timely manner;
ensuring that the Committee serves as an objective party to monitor the Company’s financial reporting process and internal control systems, as well as to monitor the relationship between the Company and the independent auditors to ensure independence;
ensuring that procedures are in place to assess the audit activities of the independent auditors; and
ensuring that procedures are in place for dealing with complaints received by the Company regarding accounting, internal controls and auditing matters, and for employees to submit confidential anonymous concerns regarding questionable accounting or auditing matters.
managing the Committee, including:
adopting procedures to ensure that the Committee can conduct its work effectively and efficiently, including committee structure and composition, scheduling, and management of meetings;

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preparing the agenda of the Committee meetings and ensuring pre-meeting material is distributed in a timely manner and is appropriate in terms of relevance, efficient format and detail;
ensuring meetings are appropriate in terms of frequency, length and content;
obtaining and reviewing with the Committee an annual report from the independent auditors, and arranging meetings with the auditors and financial management to review the scope of the proposed audit for the current year, its staffing and the audit procedures to be used;
overseeing the Committee’s participation in the Company’s accounting and financial reporting process and the audits of its financial statements;
ensuring that the auditors’ report directly to the Committee, as representatives of the Company’s shareholders; and
annually reviewing with the Committee its own performance.

SCHEDULE “B”

EXCELSIOR MINING CORP.

AUDIT COMMITTEE PRE-APPROVAL POLICY

As of March 25, 2019

This Policy identifies the Audit Committee’s procedures and conditions for pre-approving audit, auditrelated, tax and other non-audit services performed by a public accounting firm that acts as the independent auditor (the “Auditor”) responsible for auditing the consolidated financial statements of Excelsior Mining Corp. (the “Company”), and its subsidiaries and affiliates.

1. Introduction

The CPA Code of Professional Conduct (the “CPA Code”) sets out the rules for auditor independence. They include prohibitions or restrictions on services that may be provided by independent auditors to their audit clients. The independence rules identify non-audit services that are deemed inconsistent with an auditors’ independence (“Prohibited Services”). When determining whether a non-audit service is a Prohibited Service, specific reference will be made to the underlying independence rules.

In addition, under Canadian Securities Administrators (“CSA”) rules, a public company’s Audit Committee will be responsible for pre-approving all non-audit services to be provided to the company or its subsidiaries by the company’s independent auditors or the independent auditors of the company’s subsidiaries.

Under both the CPA Code and CSA rules, pre-approval of services by the Audit Committee may be accomplished either by specific approval of each engagement or by adopting pre-approval policies and procedures. The CSA rules require public companies to disclose in their Annual Information Form a description of the policies and procedures their Audit Committee has established to pre-approve non-audit services. The CSA rules also require public disclosure of fees paid to the independent auditors under the captions “Audit Fees”, Audit-Related Fees”, “Tax Fees”, and “All Other Fees”. The four categories of service, as defined in the CSA rules are:

Audit Services

Include services that are normally provided by the independent auditor in connection with statutory and regulatory filings or engagements.

Audit Related Services

Include services by an independent auditor that are reasonably related to the performance of the audit of the issuer’s financial statements and are not reported as Audit Services.

Tax Services

Include professional services rendered by an independent auditor for tax compliance, tax advice, and tax planning.

All Other Services

Include products and services provided by the independent auditor not included in the previous three categories.

2. Permitted Services

The Company and its subsidiaries will not engage the Auditor to carry out any Prohibited Service. The Audit Committee will consider the pre-approval of permitted services to be performed by the independent auditor in each of the following broad categories.

Audit Services

Audit of annual financial statements of the Company.
Review of quarterly interim financial statements.
Issuance of comfort letters to underwriters and consents to the securities administrators related to a debt or equity financing.

Audit Related Services

Accounting consultations on specific issues.
Accounting and reporting consultations on proposed transactions.
Accounting work related to mergers and acquisitions.
Audit of employee benefits plan.
Due diligence assistance.
General advice on accounting standards.

Tax Services

Compliance Income and Mining Taxes Services, including tax return preparation.
Payroll tax services.
Tax advice and consultations relating to proposed transactions.
Advice on GST and HST.
Other tax services not included in the audit and audit-related categories.

Other Non-Audit Services

Valuation Services.
Information Technology Advisory and Risk Management Services.
Actuarial Services.
Forensic and Related Services.
Corporate Recovery Services.

Transaction Services.
Corporate Finance Services.
Project Risk Management Services.
Operational Advisory and Risk Management Services.
Regulatory and Compliance Services.
Translation Services.

3. Approval of Permitted Services

For permitted services the following pre-approval policies will apply:

A. Audit Services

The Audit Committee will pre-approve all audit services provided by the Auditor through their recommendation of the Auditor as shareholders’ auditors at the Company’s annual meeting and through the Audit Committee’s review of the Auditor’s annual Audit Plan.

B. Pre-Approval of Audit Related, Tax Services and Other Non-Audit Services

Annually, the Audit Committee will pre-approve the audit-related, tax and other non-audit services to be provided by the Auditor that are recurring or otherwise reasonably expected to be provided by the external auditor, including involvement with regulatory filings and offering documents. In addition, the Audit Committee will pre-approve the auditor entering into discussion with and providing preliminary advice to management in connection with accounting, internal controls and taxation matters where they are responding to management’s request and the fees for the services of this nature are to be less than $5,000 individually or $50,000 in aggregate during the year. Where the auditor presents an engagement letter in connection with any requested services, the pre-approval of the Audit Committee should be evidenced by the signature of the Audit Committee Chair or his designate. The Audit Committee shall be subsequently informed, at least quarterly, of the services for which the External Auditor has been actually engaged. Any additional requests for pre-approval shall be addressed on a case-by-case specific engagement basis as described in (C) below.

C. Approval of Additional Services

With respect to services not covered in (A) or (B) above, the Company employee making the request will submit the request for service to the Chief Financial Officer of the Company. The request for service should include a description of the service, the estimated fee, a statement that the service is not a Prohibited Service and the reason the Auditor is being engaged. All fees related to tax services will be discussed and reviewed by the Audit Committee or its designee prior to beginning the proposed engagement.

(i) Services where the aggregate fees are estimated to be less than or equal to $50,000.

Recommendations, in respect of each engagement, will be submitted by the Chief Financial Officer of the Company to the Chair of the Audit Committee for consideration and approval. The full Audit Committee will subsequently be informed of the service, at its next meeting. The engagement may commence upon approval of the Chair of the Audit Committee.

(ii) Services where the aggregate fees are estimated to be greater than $50,000.

Recommendations, in respect of each engagement, will be submitted by the Chief Financial Officer of the Company to the full Audit Committee for consideration and approval, generally at its next meeting or at a special meeting called for the purpose of approving such services. The engagement may commence upon approval of the full Audit Committee.

AI assistant

Gunnison Copper Corp. — Annual Report 2020

46155_rns_2021-03-25_8d8faff4-1962-43d7-9e37-128b728c18f8.pdf

EXCELSIOR MINING CORP.

EXCELSIOR MINING CORP. ANNUAL INFORMATION FORM TABLE OF CONTENTS

ANNUAL INFORMATION FORM EXCELSIOR MINING CORP.

PRELIMINARY NOTES

Effective Date of Information

Currency

Metric Equivalents

Special Note Regarding Forward-Looking Information

Cautionary Note to U.S. Investors –

GLOSSARY

ABBREVIATIONS

CORPORATE STRUCTURE

Name, Address and Incorporation

Inter-corporate Relationships

DESCRIPTION AND GENERAL DEVELOPMENT OF THE BUSINESS

Three Year History

Year Ended December 31, 2018 Developments

Project Financing Package

Year Ended December 31, 2019 Developments

Nebari Credit Facility

Excelsior receives EPA Approval to Commence Mining Operations

Year Ended December 31, 2020 Developments

Mining Operations commence at the Gunnison Project

Operations Updates

Copper Offtake Agreement

Base Shelf Prospectus

Developments Subsequent to December 31, 2020 and Outlook

Sale of First Copper Cathode

Extension of Nebari Credit Facility

Bought Deal Financing

Merger

COVID-19

Outlook

Significant Acquisitions

NARRATIVE DESCRIPTION OF THE BUSINESS

Summary of the Business

Competitive Conditions

Employees

Environmental Protection

Social and Environmental Policies

MINERAL PROPERTIES

General

Gunnison Project

Summary

Key Data

Property Description and Location

Accessibility, Climate, Local Resources, Infrastructure and Physiography

History

Geological Setting and Mineralization

Deposit Types

Exploration

Drilling

Sample Preparation, Analysis and Security

Data Verification

Mineral Processing and Metallurgical Testing

New Column Testwork

Core Tray Tests

Mineral Resource Estimate

Mineral Reserve Estimate

Mining Method

Water Treatment Plant

Acid Generation Plant

Project Infrastructure

Market Studies and Contracts

Environmental and Permitting

Environmental Studies

Groundwater Modeling

Water Management

Geochemical Modeling

Community Relations

Economic Benefits

Permitting

Table 1-5: Required Permits

Closure and Reclamation Costs

Capital and Operating Costs

Capital Cost

Operating Cost

Gunnison Copper Corp. Annual Report 2020