Exeter Resource Corporation (NYSE MKT:XRA)(NYSE
Amex:XRA)(TSX:XRC)(FRANKFURT:EXB) ("Exeter" or the "Company") is
pleased to provide an update on activities on its Caspiche project
in the Maricunga gold belt of central Chile.
-- The Company has been conducting geotechnical and metallurgical drilling
at Caspiche and water exploration drilling north of Caspiche to place it
in a position to commit to a feasibility study ("FS") on the heap
leachable portion of the Caspiche deposit.
-- On the sulphide deposit, lower order technical studies to advance the
project are continuing. These studies include metallurgical
optimisations, process engineering and baseline environmental studies.
-- The Company is cognisant of the difficult market conditions currently
affecting equity markets. To this end a strategy has been formulated to
cautiously advance the project in order to conserve the $61 million
treasury.
-- Project expenditures will be delayed, including the initiation of the
heap leach project FS.
Exeter Going Forward
Exeter Chairman, Mr. Yale Simpson comments: "Exeter is in a
unique position for a junior explorer. We have a world class
gold-copper asset in an excellent jurisdiction and a very
substantial treasury.
"In my view the current depressed share price does not reflect
the potential future value of the Caspiche deposit, a value that
could well be a multiple of our current valuation. The timing will
depend on metal prices and world economic conditions.
"The Board is determined to see a higher valuation and to that
extent Caspiche is 'not for sale'. We have set aside the funds
necessary to maintain the asset for the months or years necessary
to bring value to our shareholders. We remind ourselves daily that
no one has found another Caspiche-size deposit in Chile for years,
simply because there aren't many left to be found.
"We have a treasury sufficient to consider the acquisition of
another project however such an acquisition cannot jeopardise the
security of our Caspiche asset. Our view is simply that there are
some very interesting opportunities becoming available, potentially
for joint venture or 'on sale'."
Staging the Development of the Caspiche Project
On June 6, 2011, the Company released the "Oxide Gold
Prefeasibility Study" (PFS-1), to demonstrate the potential
economics of developing the upper gold zone at Caspiche as a
stand-alone mining project. On January 17, 2012, the Company
released the larger "Pre-Feasibility Study of the Caspiche Gold
Project" (PFS-2), to demonstrate the potential economics of the
total Caspiche gold-copper deposit, including the upper oxide gold
zone.
PFS-1 was effective in showing that the development of the upper
gold zone is potentially within the financial reach of a company of
Exeter's size. In contrast, PFS-2 predictably showed that the
development of the larger project, with relatively high capital
costs which are in line with comparable porphyry-type gold-copper
projects, will likely require development by a major mining company
or a joint venture group.
The study results demonstrate the potential for Caspiche to be
developed in two phases. A simple heap leach gold project could be
developed as Phase 1 followed by the development of the much larger
sulphide gold-copper deposit as Phase 2. Phase 1 has the potential
of being brought into production reasonably rapidly and at modest
capital cost, to process both the oxide ore modelled in PFS-1, and
potentially, some of the low copper content, leachable "MacNeill
zone" sulphide ore which overlies the western edge of the
gold-copper sulphide deposit. During Phase 1 the Company could
continue the pre-development (engineering, infrastructure and
environmental) studies relevant to Phase 2 of the project.
Below is a summary of work conducted subsequent to the issue of
the January 17, 2012 pre-feasibility study:
Exploration:
Activity during the 2011-2012 exploration season included
drilling, trenching and sampling as part of the detailed
geo-technical, hydrogeological and metallurgical programs detailed
below. Drilling highlights include a modest extension to the oxide
mineralization and confirmation of modelled mineralization within
the sulphide portion of the deposit.
The drilling results will be incorporated into an updated
resource estimate for the deposit. These drilling results have the
potential to bring some material currently categorised as
"inferred" into the "measured and indicated" category thus allowing
its inclusion into "mineral reserves".
Regional exploration and reconnaissance drilling also continued
during the season on the Company's regional land position.
Metallurgical Testing:
Recoveries for gold and copper in sulphide concentrates were
estimated at 68% and 86% respectively in PFS-2. The sensitivity
analysis in PFS-2 indicated a significant positive impact on the
project net present value by improving these recoveries. The
current metallurgical testing program will provide additional data
to assist in remodelling the metal recoveries.
Oxide Metallurgy:
Five large diameter (PQ) drill holes have been shipped to
McClelland International laboratories in the USA. Once a decision
is made to proceed, column leach tests will be performed to
determine recoveries on a year to year basis in accordance with a
more detailed mining schedule. Initial column leach test results
would be expected about 4 months later and final results, six
months later.
Australia-based consultants, Blastechnology, examined the
Caspiche geotechnical data base for the oxide and MacNeill zone
ore. They have confirmed that the fracturing predictions
incorporated in the prefeasibility studies are correct.
Blastechnology further reported that the simple scalping and open
circuit crushing configuration adopted in PFS-1 will deliver a -50
mm sized product to the leach pads. With up to one third of
material to be screened out prior to primary crushing, the crusher
size can be reduced, with a resulting capital cost reduction.
Low Copper Sulphide Material (MacNeill Zone):
MacNeill zone is gold-bearing (low copper) sulphide material
that represents a relatively small component of the total sulphide
deposit. The material partially overlies the western edge of the
gold-copper sulphide ore. A program to examine its' amenability to
heap leaching at a 20mm crush size (rather than flotation) is
justified. A new metallurgical hole was recently drilled to provide
the material required for such leach testing.
Sulphide Metallurgy:
Three holes have been drilled to provide sulphide material for
recovery optimization testwork. This program is ready to proceed
and when approved will help confirm the characteristics of various
metallurgical domains in the sulphide body as well as recovery
differences between them. The goal is to improve overall recoveries
of gold by 5% and copper by 3%, a result that would considerably
enhance the project economics. Studies which include optimizing
grind size by evaluating a primary grind of 100 microns (versus the
current 130 microns) may improve flotation recoveries. Locked cycle
tests will be conducted later in the program on the individual
domain materials.
High pressure grinding roll (HPGR) testwork on the "soft"
Caspiche ore has been conducted, resulting in marginally improved
gold and copper recoveries in some domains and a significant
reduction in total comminution power in all domains. The
justification for the addition of this relatively high cost
component into the process circuit rather than the conventional SAG
milling proposed in PFS-2 is now dependent on test work to improve
recoveries at the finer grind size. HPGR could be integral in
delivering a finer primary grind without using more power. Its
adoption will be the subject of a detailed trade off study. HPGR is
proposed for the neighbouring Cerro Casale project where the
mineralization is reported to be much harder than the Caspiche
ore.
Water Supply:
Exeter continues to investigate the Rio Penas Blancas area,
where it has an option over granted water rights of 300 litres a
second (l/s) from surface sources. Schlumberger Water Services
(SWS), Exeter's consultant for this work, is supervising
comprehensive measurement and test programs with the objective of
modelling the potential harvesting of those water flows. Phase 1 of
the project only requires 85 l/s which is well below the optioned
amount of water should the SWS work indicate that the water can be
sustainably harvested. Other studies, designed to support an
environmental impact application ("EIA"), including stratigraphic
water temperature, conductivity and water chemical composition
determinations have been completed over Laguna Verde which is the
inflow receptor of Rio Penas Blancas.
Separately, Exeter is performing a water exploration program,
including drilling, at its granted water exploration concession.
The drilling program is designed to explore for sub-surface water
to help meet the water requirements for the potential Phase 2
development at Caspiche. Two large diameter hole collars were
successfully installed on site through the poorly consolidated,
porous upper surface gravels prior to the program being suspended
in June for the Andean winter. Work is planned to resume in Q4 2012
where the prepared drill holes will be extended to depth.
Geotechnical Evaluation, Hydrology and Power Line Studies:
Knight Piesold was contracted to complete a geotechnical
evaluation of the Caspiche project area. The field campaign
included completing a total of 43 trenches, 18 drill holes and
taking approximately 90 samples over key areas of the project to
show suitability of sites selected for the process facilities, heap
leach pads etc. Initial indications are that the overburden is of a
quality suitable for mass fill, such that a separate quarry area to
produce construction material may not be required and furthermore
that this material may be suitable for concrete aggregates. When
confirmed this will have a positive impact on capital construction
costs for the Phase 1 project.
SWS has advanced project hydrology and hydrogeology studies for
the Caspiche site. A drill hole monitoring campaign is complete and
will determine potential surface and sub-surface water flows. Two
additional drill holes and rehabilitation of several existing holes
were recently completed to complement this program. Pump testing
has also been undertaken to determine the potential for interaction
between the drill holes and to provide additional inputs for
modelling. This work will allow surface water management systems to
be designed and will provide inputs with regard to expected open
pit dewatering requirements.
As part of the surface water flow and quality programs, samples
of the waste material associated with the MacNeill zone have been
sent to ALS Environmental laboratories in Chile to complete Acid
Base Accounting (ABA) and Synthetic Precipitation Leaching
Procedure (SPLP) tests. These tests will determine the potential
for the waste rock to generate acid water and the potential
leaching out of metals, primarily iron, from waste during
precipitation events. The results of these tests will be used in
the design of a water treatment plant to ensure a water discharge
in compliance with environmental standards.
POCH engineering has been contracted to complete a FS level
evaluation to extend the nearby Maricunga Mine overhead power line
by 15 km. to provide energy for the Phase 1 operation. A technical
evaluation of the substation and power line has been completed and
an access corridor selected. A geotechnical evaluation is expected
to be completed in the near future with a final report and costing
to be generated thereafter. Initial evaluations indicate that the
existing line and substation installations will support the
increased power demand for the Phase 1 project. Should this be
confirmed it will provide an operating cost saving relative to the
diesel generated power costs modelled in PFS-1.
Improved topography has been acquired for the Caspiche project
area and the water pipeline corridor. Topography was produced to
0.5m contours, a suitable precision to allow FS engineering to be
completed.
Environmental Studies:
Baseline studies continue across the Caspiche heap leach project
area. Separately, an initial stakeholder participation program as
required in accordance with the International Labour Office (ILO)
convention 169 has commenced.
Exeter plans to be in a position to submit an EIA to the Chilean
authorities within 6 months of determining to commence a FS for
Phase 1 of the project.
Mr Jerry Perkins, Vice President Operations and Justin Tolman,
General Manger Chile for Exeter, are qualified persons as defined
in NI 43-101 and is responsible for preparing the information
contained in this news release.
About Exeter
Exeter Resource Corporation is a Canadian mineral exploration
company focused on the exploration and development of the Caspiche
project in Chile. The project is situated in the Maricunga gold
district, between the Maricunga mine (Kinross Gold Corp.) and the
Cerro Casale gold deposit (Barrick Gold Corp. and Kinross Gold
Corp.).
The discovery represents one of the largest mineral discoveries
made in Chile in recent years. Exeter has completed pre-feasibility
studies that demonstrate the potential for commercializing this
world class discovery. The Company currently has cash reserves of
CDN$61 million and no debt.
You are invited to visit the Exeter web site at
www.exeterresource.com.
EXETER RESOURCE CORPORATION
Bryce Roxburgh, President and CEO
Safe Harbour Statement - This news release contains
"forward-looking information" and "forward-looking statements"
(together, the "forward-looking statements") within the meaning of
applicable securities laws and the United States Private Securities
Litigation Reform Act of 1995, including in relation to the
Company's belief as to the extent and timing of its drilling
programs, various studies including feasibility studies,
engineering, environmental, infrastructure and other studies, and
exploration results, budgets for its exploration and engineering
programs, the potential tonnage, grades and content of deposits,
timing, establishment and extent of resources estimates, potential
for financing its activities, potential production from and
viability of its properties, availability of water, power, surface
rights and other resources, permitting submission and timing and
expected cash reserves. These forward-looking statements are made
as of the date of this news release. Readers are cautioned not to
place undue reliance on forward-looking statements, as there can be
no assurance that the future circumstances, outcomes or results
anticipated in or implied by such forward-looking statements will
occur or that plans, intentions or expectations upon which the
forward-looking statements are based will occur. While the Company
has based these forward-looking statements on its expectations
about future events as at the date that such statements were
prepared, the statements are not a guarantee that such future
events will occur and are subject to risks, uncertainties,
assumptions and other factors which could cause events or outcomes
to differ materially from those expressed or implied by such
forward-looking statements. Such factors and assumptions include,
among others, the effects of general economic conditions, the price
of gold, silver and copper, changing foreign exchange rates and
actions by government authorities, uncertainties associated with
negotiations and misjudgments in the course of preparing
forward-looking information.
In addition, there are known and unknown risk factors which
could cause the Company's actual results, performance or
achievements to differ materially from any future results,
performance or achievements expressed or implied by the
forward-looking statements. Known risk factors include risks
associated with project development; including risks associated
with the failure to satisfy the requirements of the Company's
agreement with Anglo American on its Caspiche project which could
result in loss of title; the need for additional financing;
operational risks associated with mining and mineral processing;
fluctuations in metal prices; title matters; uncertainties and
risks related to carrying on business in foreign countries;
environmental liability claims and insurance; reliance on key
personnel; the potential for conflicts of interest among certain
officers, directors or promoters of the Company with certain other
projects; the absence of dividends; currency fluctuations;
competition; dilution; the volatility of the Company's common share
price and volume; tax consequences to U.S. investors; and other
risks and uncertainties, including those described in the Company's
Annual Information Form for the financial year ended December 31,
2011 dated March 30, 2012 filed with the Canadian Securities
Administrators and available at www.sedar.com. 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 statements, there may be other factors
that cause actions, events or results not to be as anticipated,
estimated or intended. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking statements. The Company is
under no obligation to update or alter any forward-looking
statements except as required under applicable securities laws.
Cautionary Note to United States Investors - The information
contained herein and incorporated by reference herein has been
prepared in accordance with the requirements of Canadian securities
laws, which differ from the requirements of United States
securities laws. In particular, the term "resource" does not equate
to the term "reserve". The Securities Exchange Commission's (the
"SEC") disclosure standards normally do not permit the inclusion of
information concerning "measured mineral resources", "indicated
mineral resources" or "inferred mineral resources" or other
descriptions of the amount of mineralization in mineral deposits
that do not constitute "reserves" by U.S. standards, unless such
information is required to be disclosed by the law of the Company's
jurisdiction of incorporation or of a jurisdiction in which its
securities are traded. U.S. investors should also understand that
"inferred mineral resources" have a great amount of uncertainty as
to their existence and great uncertainty as to their economic and
legal feasibility. Disclosure of "contained ounces" is permitted
disclosure under Canadian regulations; however, the SEC normally
only permits issuers to report mineralization that does not
constitute "reserves" by SEC standards as in place tonnage and
grade without reference to unit measures.
NEITHER THE TSX NOR ITS REGULATION SERVICES PROVIDER (AS THAT
TERM IS DEFINED IN THE POLICIES OF THE TSX) ACCEPTS RESPONSIBILITY
FOR THE ADEQUACY OR ACCURACY OF THIS NEWS RELEASE
Contacts: Exeter Resource Corporation B. Roxburgh President
604.688.9592 or Toll-free: 1.888.688.9592 604.688.9532 (FAX) Exeter
Resource Corporation Rob Grey VP Corporate Communications
604.688.9592 or Toll-free: 1.888.688.9592 604.688.9532 (FAX) Exeter
Resource Corporation Suite 1660, 999 West Hastings St. Vancouver,
BC Canada V6C 2W2exeter@exeterresource.com
www.exeterresource.com
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