JUNIOR MINING

Exeter spinoff Extorre Gold passes million ounce mark

Extorre Gold Mines, which is exploring an exciting high grade gold/silver project west of Puerto Deseado in southern Argentina has just announced a new resource estimate for the project.

LONDON - 

A month or so ago, Exeter Resource spun off a second gold exploration company, Extorre Gold Mines, so a second management team could concentrate on the very promising Cerro Moro project in Argentinian Patagonia.  Meanwhile Exeter itself would, with its management team, concentrate entirely on the huge Caspiche gold/copper project in neighbouring Chile.  With Caspiche being much the bigger of the two deposits, Exeter felt that unless what is now Extorre was spun off into a separate company with separate management, it would forever be overshadowed by Caspiche and the separation of the two would enhance the overall value to shareholders.  This certainly seems to have been brought about.

Now the spin-off company, Extorre, has announced a new independently assessed NI 43-101 compliant resource with total drill indicated and inferred figures for Cerro Moro amounting to over 1 million ounces of gold equivalent (gold plus silver in this case).  According to company Joint-Chairman, Yale Simpson, talking to Mineweb recently, there is no reason why these figures should not become far larger with time given that the company has so far investigated only a few of the multiplicity of veins in its concession area.

Extorre's new President and CEO, Eric Roth, confirmed this assessment saying "We are now able to raise our resource objective for Cerro Moro to 2 million ounces gold equivalent. We have two rigs on site extending the known mineralization and testing identified targets on the extensive vein system, which compares favourably with the multi-million ounce gold systems elsewhere in the province.

"With our focus in 2009-2010 on drilling the high grade Escondida vein, the effective doubling of both the number of drill holes and metres drilled has increased the drilling density sufficiently to convert 86% of the contained gold equivalent ounces to the indicated resource category."

Cerro Moro is a low sulphidation epithermal vein type of deposit containing simple, single veins to complex vein systems with spur and cymoid loop structures.  Limited quartz stock-work veinlets are also present around the main veins.  Some of the veins carry extremely high ‘bonanza' grade gold and silver mineralisation and the most work to date has been undertaken on one of these high grade veins - the Escondida.  The deposit is considered similar in type to AngloGold Ashanti's Cerro Vanguardia mining operation in the same region.

The new resource figures for Cerro Moro are as follows:

Indicated Category: 612,000 ounces gold equivalent (590,000 t at 18.9 g/t gold and 805 g/t silver, for a gold equivalent grade of 32.3 g/t), plus Inferred Category: 390,000 ounces gold equivalent (190,000 t at 3.0 g/t gold and 190 g/t silver, for a gold equivalent grade of 6.1 g/t gold).

This latest resource estimate for the Cerro Moro Project is the first undertaken by Cube Consulting and follows a previous estimate undertaken by Snowden Mining Industry Consultants announced in July last year.

Under the terms of the Exeter spinoff, Extorre owns not only the Cerro Morro project but also the Don Sixto project and other exploration properties in Argentina, together with approximately $25 million.

Cerro Moro is 100% owned by Extorre, with the Santa Cruz Government Mining Company, Fomicruz S.E. entitled to a 5% interest, on completion of mine permitting.