The Company believes these trends could potentially lead to the discovery of a large carbonate replacement deposit (CRD) at Platosa. CRDs comprise a series of pods and lenses (called "mantos") of massive and semi-massive to disseminated silver-lead-zinc sulphides. The alteration and complexity of the Platosa mineralization are similar to the style of large-scale Mexican CRDs, which can contain from 5 to 50 million tonnes.

The large 14,692 hectare Property, which is in the centre of the prospective Mexican CRD belt, is well situated for mineral exploration and mine development. Located 40 kilometres north of Torreon, a major population centre with an international airport, Platosa is adjacent to a regional power grid and has paved road access. There is an abundant local labour supply and a large service sector supporting other mines and heavy industrial activities in the region.

In the fiscal year ended July 31, 2006, Excellon produced 44,400 tonnes of ore generating 1,712,000 ounces of silver, 10,921,000 pounds of lead, and 12,776,000 pounds of zinc. 

The Company expects to produce 47,300 tonnes of ore in fiscal 2007, generating 2,500,000 ounces of silver, 11,000,000 pounds of lead, and 2,524,000 pounds of zinc.

Projects: Platosa Mine in northeastern Durango State, Mexico

Excellon Resources Inc. is test-mining and developing the high grade silver-zinc-lead mineralization on its 14,692-hectare [36,000-acre] Platosa/Saltillera Properties ["Platosa"] in northeastern Durango State, Mexico.

The style of mineralization at Platosa resembles that of several of the world-class carbonate replacement deposits ["CRD"] of Mexico.

Surface drilling continues with three rigs currently working at Platosa. The Company's cash on hand and its Mineral Resources have consistently increased since test-mining operations commenced in August 2004. An updated National Instrument 43-101 compliant report ["updated report"] prepared by Scott Wilson Roscoe Postle Associates Inc., independent geological and mining consultants of Toronto, Ontario ["Scott Wilson RPA"] was received in August 2006. The estimate was prepared as at May 9, 2006 in accordance with the guidelines set forth in NI 43-101.

Test-Mining Operations

Shipments to the Naica milling facility of Industrias Penoles S.A. de C.V. (“Penoles”) were 8,546 tonnes during the quarter ended January 31, 2007 compared with 9,554 tonnes in the quarter ended January 31, 2006, 11,536 tonnes in the quarter ended October 31, 2006, and a target of 15,000 tonnes. Although the operations at Platosa could have maintained the targeted production rates, continuing difficulties experienced at the Naica mill restricted the shipments it could receive. Shipments improved during February and the Company reached the rate of 4,200 tonnes per month in March. This rate is forecast to reach 5,000 tonnes by May.

During the period, development of underground access and mine infrastructure to reach the new mineralization discovered in December 2005 was progressed and initial production from the area was started. With the increase to the mineral resource now available to the test-mining infrastructure that is in place, an evaluation of a mill at Platosa is warranted. Construction of a mill at Platosa will allow production of lead and zinc concentrates and sale to the international markets independent of the current long distance transport of the ore and dependence on the Naica mill operation. It will also allow for better utilization of the mining and crushing capacity now established at Platosa as well as provide a higher return on the metal produced. As part of the evaluation, the planning and permitting process was initiated during the quarter.

Exploration

A large number of positive drill core assays for 2006 holes in the Platosa test-mine area have been received since December 15, 2006, and diamond drilling has continued with three drill rigs and an airborne electromagnetic survey has been completed.

As reported in a press release dated January 22, 2007, complete assays were received for 13 holes containing massive sulphide and sulphide-rich breccia intersections in the test-mine area, 11 related to the Guadalupe Manto. These results were very positive. Silver grades in the 11 holes range between 139 and 1331 g/t; lead grades range between 2 and 21.4%; and zinc grades range between 0.65 and 19.4% over widths ranging from 0.50 to 7.00 metres. Combining these intersections with previously reported holes extends the high-grade massive sulphide mineralization in the Guadalupe Manto at least 150 metres to the northwest past the limits defined in Excellon’s National Instrument 43-101("NI 43-101") compliant Mineral Resource Estimate prepared by Scott Wilson Roscoe Postle Associates ("Scott Wilson RPA") of Toronto, Ontario, independent geological and mining consultants, and reported on August 17, 2006. The Guadalupe Manto remains open in several directions. Management believes that based on these results, Mineral Resources will be added to the Guadalupe Manto and plans to undertake an updated Mineral Resource estimate later in 2007.

Of the two other holes, LP-325 was drilled in previously untested ground 75 metres northeast of the Guadalupe Manto and cut 5.74 metres of massive sulphides grading 586 g/t silver with 6% lead and 10% zinc. The remaining hole, LP-322, combines with earlier holes to add significant mineralization to a northerly extension of the previously mined N-1 Manto and may link it with the Guadalupe Manto.

Photo: John Sullivan, Vice-President, exploration geologists of Excellon (right) and Peter Zihlmann (left)

Drilling begun in 2006 at the Crestoncitos area 1.5 km south of the Platosa test-mine and the Cañon Colorado area 5 km to the north was completed and returned no significant results.

Three drills are operating on the property. One is in the immediate test-mine area on 100% Excellon ground, following up on known mineralization and new soil geochemical targets. The other two are on ground optioned from Exploraciones Altiplano. One is operating near the historic Zorra Mine 4 km to the southwest of the test-mine. Alteration in this area is very strong and there are numerous prospect pits that have yielded strong silver-lead-zinc anomalies. The drilling is focusing on intrusion and alteration centres with moderate geochemical signatures. The other is testing areas of alteration and previous modest silver-lead-zinc values in the vicinity of the historic Saltillera Mine, 4 km west of the test-mine and north of Zorra. Encouragement in the form of extensive alteration, structure and modest sulphides has been encountered in several holes and more holes are planned in all three areas. Assays for 2007 drilling are pending.

In mid-February, an Aeroquest Limited AeroTEMII helicopter-borne electromagnetic and magnetic survey was completed over the Platosa property. Very preliminary data processing has been completed and the company is  confident that the final survey results will be of significant value in geological and structural interpretation and outlining new high potential drill targets.

Recent News: Excellon Discovers Potential Link Between Guadalupe Mantos

Resources Inc. announced that the apparent 60 metre wide "gap" between the Guadalupe and Guadalupe South Mantos appears to be bridged approximately 25 metres above the elevation of these mantos. As part of the ongoing test-mining at Platosa, brecciated sulphide mineralization was traced upwards from the southeast end of the Guadalupe Manto to flat-lying massive silver-galena-sphalerite rich mineralization that is now being mined southeast towards the Guadalupe South Manto. Eighty-six metres farther southeast along this trend, Hole LP07-347 has intersected 5 metres of similar looking massive and brecciated sulphide mineralization at the same elevation 15 metres to the northwest of the limit of the Guadalupe South Manto (see attached map). An earlier hole, LP06-150, drilled 26 metres to the northeast of the Guadalupe Manto, cut 2.75 metres of brecciated sulphide mineralization grading 694 g/t silver, 4.23% lead, and 3.56% zinc at the same elevation and may also be part of the potential bridge.

"We are very pleased to be tracing the anticipated link between the Guadalupe and Guadalupe South Mantos, both because continuity of mineralization is a hallmark of major manto systems, and because this represents additional mineralization easily extracted through our existing test-mining infrastructure," said Richard Brissenden, Excellon's chairman and CEO. "We are also pleased to see the extent and strength of the Mag and EM anomalies in the preliminary airborne data. The surface alteration and mineralization above these anomalies has long suggested that the source of the Platosa system lies in this area and the nature of the intrusions and related alteration reinforce this. We look forward to drilling the additional targets we expect will be indicated by the final processed airborne results."

Fundamental Considerations

The Potential

Excellon is continuing its surface and underground exploration program to locate both additional high-grade mineralization near the Platosa Mine, and a near-source, larger-scale deposit of the style known in major carbonate replacement deposit ("CRD") systems in the Mexican CRD Belt.  These deposits combine with major vein systems to support the development of most of the larger Mexican underground silver and base metal production.  Platosa lies along the trend of these larger deposits.

The Platosa Mine area is largely overburden covered and exploration to date has relied on a combination of Natural Source Audio Magneto Tellurics ("NSAMT") geophysical, soil geochemical, and biogeochemical prospecting methods.  These methods assisted in the discovery of the Guadalupe Mantos and the NE-1 area mineralization.  Other coincident anomalies have been identified on the property and these will be drilled in 2007. An airborne electromagnetic and magnetic survey was flown in early 2007 and it is anticipated that the results will also assist in target delineation.

Carbonate Replacement Deposits

The Platosa deposit is a CRD style of mineralization comprising a series of pods and lenses (called "mantos") of massive and semi-massive to disseminated silver-lead-zinc sulphides.  The mineralization, associated alteration, and complexity seen at Platosa are similar to larger-scale Mexican CRDs that contain from 5 to 50 million tonnes.  The metal content and controls of what has been found to date at Platosa are typical of the irregular fringes of such replacement systems found in the larger-scale deposits. Identifying the larger-scale and more regular central part of the CRD system is one of the primary focuses of Excellon’s ongoing exploration program.

Mineral Resource Estimate

The current NI 43-101-compliant Mineral Resource estimate for the Platosa deposit was prepared in August 2006 (estimating the resource as at May 9, 2006) by Scott Wilson Roscoe Postle Associates Inc., independent geological and mining consultants.  Readers are cautioned that Mineral Resources are not Mineral Reserves and do not have any demonstrated economic viability.

The Test-mine

The Platosa test-mine is an underground operation.  The mineralization is accessed by a 4 x 4 metre ramp, and a Mexican contract miner carries out the mining operations under the direction of Excellon.  The ore is mined and trucked to surface, where it is crushed, sampled, and loaded into trucks for shipment. The present production rate (mining and crushing) is approximately 200 tonnes per day.

Crushed ore from Platosa is shipped to the Naica Mill in Chihuahua that is operated by the Compañia Fresnillo division of the Industrias Peñoles Group.  Peñoles purchases the ore at the Platosa test-mine site based on assays of the crushed ore, with an 80% provisional payment made, on average, 26 days after shipment of the ore.  Final settlement is made in the second month following delivery.  SGS Laboratories independently samples the ore on behalf of Peñoles and Excellon.

Technical Considerations

Peter Zihlmann

www.pzim.com  

www.timeless-gold.com

invest@pzim.ch

Tel.+41 44 268 51 10

Mobile +41 79 379 51 57

THE TIMELESS PRECIOUS METAL FUND

is a shareholder in the company and will benefit from any increase in the company’s share price.

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Disclosure: The author has not been paid to write this article, nor has he received any other inducement to do so. The author is a shareholder in the company and will benefit from any increase in the company’s share price.

Disclaimer: The author’s objective in writing this article is to invoke an interest on the part of potential investors in this stock to the point where they are encouraged to conduct their own further diligent research. Neither the information nor the opinions expressed should be construed as a solicitation to buy or sell this stock. Investors are recommended to obtain the advice of a qualified investment advisor before entering into any transactions in the stock.

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