Hydrology Pump Tests Confirm Favourable Conditions for In-Situ Operations

VANCOUVER, BRITISH COLUMBIA--(Marketwired - July 28, 2015) - Excelsior Mining Corp. (TSX VENTURE:MIN)(FRANKFURT:3XS) (OTCQX:EXMGF) ("Excelsior" or the "Company") is pleased to announce comprehensive hydrological results for the Gunnison Copper Project in Arizona ("Gunnison Project"). The results generated hydrological conductivities in the range expected for typical fracture controlled deposits and show the deposit is suitable for in-situ recovery ("ISR") operations. These results will be incorporated into a full Feasibility Study scheduled for completion in 2016.

Commenting on these results, President and CEO Stephen Twyerould said, "The successful completion of the hydrology test program is a major milestone in the advancement of our Gunnison Copper Project. The favourable results once again demonstrate the potential to extract this significant deposit using economically superior and environmentally friendly in-situ mining."

A total of 32 hydrology wells were laid out over the North Star deposit of the Gunnison Project and its surroundings. These wells targeted a variety of fractured zones, rock types and mineralized areas. Twenty-seven of the 32 wells were hydraulically tested and the remaining five served as observation wells. An additional 21 core holes from previous drilling programs were used as water level observations to provide a radial distribution of observation bores to each of the tested wells.

Pump Rates

Hydraulic properties and sustainable pumping rates for individual formations and structures were quantified by assessing the connectivity between pumping wells and observation wells. A pump rate is considered sustainable when at least 50% of the available drawdown is achieved at the end of the total test duration, which typically lasts for five days. Available drawdown is defined as the well bore interval between pump intake and the pre-test level of the water table. Sustainable pump rates of up to 170 gallons per minute (gpm) were observed; these results demonstrate favourable flow rates for potential in-situ copper recovery operations.

Hydraulic Conductivity

Drawdown response analysis is the quantification of the hydraulic conductivity and is a measure of the efficiency with which water moves through the rock. Hydraulic conductivity (K) is measured in units of length over time, and is represented as feet per day (ft/d). Previous pump tests (pre-2014) conducted by Excelsior produced hydraulic conductivities that ranged from 0.17 ft/day to 4.9 ft/day. These test results were incorporated into the 2014 Prefeasibility Study. Table 1 shows the combined data from all tests, together with the tested depth and span of the hydraulic interval (D).

Table 1 Summary of Hydraulic Testing Results

Hydrology Well	K (feet / day)	Hydraulic Interval (ft)	D (ft)
NSH -001	0.3	702 - 1096	394
NSH -002	4.5	608 - 1264	656
NSH -003	0.2	1216 - 1400	184
NSH -004B	0.5	695 - 1031	336
NSH -005	5.0	647 - 1020	373
NSH -0061	45.0	640 - 681	41
NSH -007	0.4	469 - 620	151
NSH -008	0.4	700 - 847	147
NSH -009	0.01	785 - 1018	233
NSH -010	0.1	555 - 720	165
NSH -011	0.2	470 - 545	75
NSH -013	0.9	656 - 1070	414
NSH -014B2	0.02	1160 - 1274	114
NSH -015	4.6	600 - 820	220
NSH -016	3.1	580 - 820	240
NSH -017	5.8	919 - 1200	281
NSH -018	9.3	591 - 992	401
NSH -019	4.8	638 - 1300	662
NSH -020	2.0	1110 - 1582	472
NSH -021C	0.5	624 - 1372	748
NSH -022	0.1	919 - 1131	212
NSH -023	0.4	645 - 1442	792
NSH -024	0.2	625 - 1440	815
NSH -025	0.05	1461 - 1590	129
NSH -026	0.3	625 - 900	275
NSH -027	0.6	840 - 1010	170
NSH -028	0.2	572 - 800	228

¹ Alluvium

² NSH -014B tested the non-mineralized zone beneath the deposit.

Drawdown analyses from the majority of the wells indicate confined flow conditions and rapid initial response, which are characteristic of fractured bedrock aquifers. When fracture flow was identified, appropriate analysis verified that fracturing was sufficiently frequent such that modeling with an equivalent porous medium model was justified.

Hydrology Model

A regional groundwater model has been constructed that is capable of modeling and predicting local and regional groundwater flow during simulations of various in-situ recovery scenarios sufficient to support production modeling at the feasibility level. The model has been successfully calibrated by comparison of measured and predicted groundwater levels. Results validate that the deposit is amenable to in-situ mining.

The model is necessary in the permitting phase to demonstrate understanding and control of groundwater flow at the site and to quantify the potential volumes of mine-affected water. It is also being used to develop preliminary designs of the hydraulic interaction between extraction and delivery wells for different configurations and well spacing. In-situ recovery mining relies on flow between a delivery well and the neighboring extraction wells. This flow is controlled by the hydraulic conductivity between the delivery and the extraction point, and by the hydraulic gradient. The gradient can be controlled by means of delivery and extraction rates which create a pressure head ("mounding") in the delivery well and a cone of depression at the recovery well. Modelling has shown that flow rates necessary for in-situ mining and hydraulic control are fully supported by the hydraulic conductivities shown in Table 1.

About Excelsior

Excelsior is a mineral exploration and development company that is advancing the Gunnison Copper Project. The Excelsior management team consists of experienced professionals with proven track records of advancing mining projects into production. Further information about the Gunnison Copper Project can be found in the technical report filed on SEDAR at www.sedar.com entitled: "Gunnison Copper Project, NI 43-101 Technical Report, Prefeasibility Study" dated February 14, 2014.

For more information on Excelsior, please visit our website at www.excelsiormining.com.

Mr. R. Douglas Bartlett, RG, CPG, CHG, a Principal Hydrogeologist with Clear Creek Associates and a Qualified Person as defined by NI 43-101, has reviewed and approved the technical information disclosed in this news release. Mr. Bartlett has verified the data underlying the test results by approving the test procedure, obtaining all the analytical data over the life of the experiment, and performing the calculations presented above.

ON BEHALF OF THE EXCELSIOR BOARD

Mark J. Morabito, Executive Chairman

Cautionary Note Regarding Forward-Looking Information

This news release contains "forward-looking information" concerning anticipated developments and events that may occur in the future. Forward looking information contained in this news release includes, but is not limited to, statements with respect to (i) the details of the mineral resource estimate; (i) the use of in-situ recovery to mine the Gunnison Project; (ii) in-situ recovery mining being economically superior and environmentally friendly; (iii) expected future hydrological conditions of the Gunnison Project based on the test results; (iv) the completion of a Feasibility Study; and (v) the advancement of the Gunnison Project.

Such forward-looking information can be identified by the use of the word "will". Forward-looking information contained in this news release is based on certain factors and assumptions regarding, among other things, the estimation of mineral resources and mineral reserves, the realization of resource and reserve estimates, copper and other metal prices, the timing and amount of future exploration and development expenditures, the accuracy of the test results and that they are indicative of full scale mining at the Gunnison Project, the estimation of initial and sustaining capital requirements, the estimation of labour and operating costs, the availability of necessary financing and materials to continue to explore and develop the Gunnison Project in the short and long-term, the progress of exploration and development activities, the receipt of necessary regulatory approvals, the completion of the permitting process, the estimation of insurance coverage, and assumptions with respect to currency fluctuations, environmental risks, title disputes or claims, and other similar matters. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

Forward looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include 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, risks relating to variations in mineral resources and reserves, grade or recovery rates resulting from current exploration and development activities, risks relating to the ability to access infrastructure, risks relating to changes in copper and other commodity prices and the worldwide demand for and supply of copper and related products, risks related to increased competition in the market for copper and related products and in the mining industry generally, risks related to current global financial conditions, uncertainties inherent in the estimation of mineral resources, access and supply risks, reliance on key personnel, operational risks inherent in the conduct of mining activities, including the risk of accidents, labour disputes, increases in capital and operating costs and the risk of delays or increased costs that might be encountered during the development process, regulatory risks, including risks relating to the acquisition of the necessary licenses and permits, financing, capitalization and liquidity risks, including the risk that the financing necessary to fund the exploration and development activities at the Gunnison Project may not be available on satisfactory terms, or at all, risks related to disputes concerning property titles and interest, environmental risks and the additional risks identified in the "Risk Factors" section of the Company's reports and filings with applicable Canadian securities regulators.

Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information is made as of the date of this news release. Except as required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward-looking information.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release, and no securities regulatory authority has either approved or disapproved of the contents of this release.