Excellon Resources Inc (TSX:EXN, OTCQB:EXNRF) said on Wednesday that rehabilitation work is underway at its fully permitted Mallay Mine in Peru, with the goal of restarting production and reaching nameplate capacity of 600 tonnes per day by the second quarter of 2026.
In a letter to shareholders, CEO Shawn Howarth called the past few months a “transformative new chapter” for the company, noting that the acquisition of Mallay positions Excellon to become an emerging global silver producer.
“With the acquisition of the fully permitted, past-producing Mallay Mine in Peru, Excellon is positioned to become the next emerging global silver producer. This marks just the beginning of our broader growth strategy,” Howarth wrote.
Work is also progressing across the company’s broader portfolio, including the Tres Cerros project in Peru, the Kilgore gold project in Idaho, and the Silver City project in Germany.
At Mallay, work has begun rehabilitating the 4150 and 4090 levels, advancing up to 80 metres per day, according to the company. Excellon said it is on track to complete rehabilitation within the next three to four months, enabling the company to assess a potential restart in previously developed zones that are readily accessible and do not require dewatering.
The company is also updating a NI 43-101 mineral resource estimate for Mallay, expected by the end of August, to support detailed restart planning.
Excellon highlighted two near-mine exploration priorities: extending the Isguiz Vein, the primary historical silver-lead-zinc system, and investigating the Shafra Zone, a gold target with historical high-grade values. The company has launched a re-assay program on legacy drill core to evaluate the Shafra Zone’s potential.
Meanwhile, Excellon is advancing the Tres Cerros gold-silver project, located six kilometers northwest of Mallay. The greenfield target shows signs of a high-sulphidation epithermal system, and the company is working to secure exploration permits while continuing mapping and sampling.
Elsewhere, the company plans to update the preliminary economic assessment at its Kilgore project to reflect stronger gold prices. The Idaho-based project hosts indicated mineral resources of 825,000 ounces of gold and inferred resources of 136,000 ounces.
“Excellon is entering a growth phase, with a clear strategy, strong team, and exceptional assets,” Howarth wrote.
The company is also evaluating options to unlock value from its Silver City project in Germany, including a potential spin-out.