Extorre Gold Mines Limited (TSX:XG)(FRANKFURT:E1R)(PINK SHEETS:EXGMF) ("Extorre"
or the "Company") is pleased to provide an updated National Instrument 43-101
compliant mineral resource estimate for its Cerro Moro Project, Santa Cruz
Province, Argentina. The new estimates comprise:
Indicated Category: 612,000 ounces gold equivalent(ii) (590,000 t at 18.9 g/t
gold and 805 g/t silver, for a gold equivalent grade of 32.3 g/t(i)), plus
Inferred Category: 390,000 ounces gold equivalent(ii) (190,000 t at 3.0 g/t gold
and 190 g/t silver, for a gold equivalent grade of 6.1 g/t(i) gold).
The indicated resource is based on infill drilling completed on the high grade
Escondida vein between April, 2009 and February, 2010. The 612,000 ounce gold
equivalent(ii) indicated resource has a grade of 32.3 g/t gold equivalent(i), a
grade considered exceptional by industry standards. The silver contribution is
high, accounting for over 40% of the value.
Additional inferred resources of 390,000 ounces gold equivalent(ii) are reported
from the Escondida, Loma Escondida, Gabriela, Esperanza, and Deborah veins. The
inferred resource totals 1.97 million metric tons (Mt) at a grade of 3.0 g/t
gold and 190 g/t silver, for a gold equivalent grade of 6.1 g/t(i). This equates
to 190,000 ounces of gold and 12.0 million ounces of silver, to total 390,000
gold equivalent ounces(ii). This inferred resource contains new material not
previously estimated.
Indicated Mineral Resource for Escondida utilising a 1.0 g/t gold equivalent
cut-off
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Gold
Equivalent Gold
Metric Gold Silver Grade(i) Gold Silver Equivalent
Zone Tonnes (g/t) (g/t) (g/t) (ounces) (ounces) Ounces(ii)
----------------------------------------------------------------------------
Escondida 590,000 18.9 805 32.3 357,000 15,272,000 612,000
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Inferred Mineral Resources utilising a 1.0 g/t gold equivalent cut-off
----------------------------------------------------------------------------
Gold
Equivalent Gold
Metric Gold Silver Grade(i) Gold Silver Equivalent
Zone Tonnes (g/t) (g/t) (g/t) (ounces) (ounces) Ounces(ii)
----------------------------------------------------------------------------
Escondida 432,000 3.7 155 6.3 52,000 2,158,000 88,000
----------------------------------------------------------------------------
Loma
Escondida 68,000 10.2 504 18.6 22,000 1,098,000 41,000
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Gabriela 521,000 2.4 347 8.1 40,000 5,802,000 136,000
----------------------------------------------------------------------------
Esperanza 371,000 2.6 175 5.5 31,000 2,090,000 65,000
----------------------------------------------------------------------------
Deborah 579,000 2.4 48 3.2 45,000 896,000 60,000
----------------------------------------------------------------------------
TOTAL 1,971,000 3.0 190 6.1 190,000 12,044,000 390,000
----------------------------------------------------------------------------
Extorre's President and CEO, Eric Roth, stated, "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.
"The corresponding increase in inferred resources at the other prospects,
notably Gabriela and Esperanza, resulted from improved three-dimensional
geological modelling combined with geostatistical estimation techniques. The
Deborah vein is a newly reported inferred resource.
"The updated resource models for Escondida have been delivered to NCL Ingenieria
y Construccion for evaluation of an optimal mine model. The results will be used
in the Preliminary Economic Assessment (PEA) scheduled for Q3, 2010. The PEA
will provide estimated mine operating and capital costs for a potential 100,000
ounce gold equivalent per annum mining operation. I believe that the current
size of the indicated resource together with the PEA will provide our board with
sufficient information to proceed rapidly with a mine development decision.
"Infrastructure studies and flow sheet development for a plant continue. This
work will allow for detailed cost estimating which is now commencing. One rig is
currently drilling for water and engineering studies, and long term pump testing
is being conducted to ensure sufficient water exists for project requirements."
Click Here for the plans (http://www.extorre.com/pdf/release/diagram_02.pdf)
(i) Gold equivalent grade is calculated by dividing the silver assay result by
60, adding it to the gold value and assuming 100% metallurgical recovery.
(ii) Gold equivalent ounces are calculated by dividing the silver ounces by 60,
then adding those ounces to the gold-only ounces.
Resource Estimate Authorship and Methodology
The April 2010 resource estimate of the Cerro Moro Project is the first
undertaken by Cube Consulting ("Cube") and follows a previous estimate
undertaken by Snowden Mining Industry Consultants announced on July 8, 2009. The
mineral resource estimates were prepared by Mr Ted Coupland, MAusIMM, CPGeo,
Director and Principal Geostatistician of Cube. The mineral resource estimates
have been classified and reported in accordance with the CIM guidelines (CIM
2005) and National Instrument NI 43-101, Standards of Disclosure for Mineral
Projects. Mr Ted Coupland is 'independent' and a 'qualified person' as defined
by NI 43-101.
Updated mineral resource estimates were undertaken for the Escondida, Loma
Escondida, Esperanza, Gabriela and Deborah prospects. All drilling data
available as of March 25,, 2010 was used for the resources estimates. A summary
of drilling data for each prospect is as follows:
Escondida 523 drill holes for 65,407m (Exeter 65,302m, Mincorp 105m)
Loma Escondida 27 drill holes for 2,032m (Exeter 1,908m, Mincorp 124m)
Gabriela 42 drill holes for 5,005m (Exeter 5,005m)
Esperanza 46 drill holes for 4,114m (Exeter 3,925m, Mincorp 188m)
Deborah 21 drill holes for 1,266m (Exeter 1,163m, Mincorp 102m)
The Escondida resource estimate was primarily based on Exeter diamond drilling
and a small number of selected reverse circulation drill holes. The Loma
Escondida estimate was based on Exeter diamond drilling and selected surface
trench sampling. The Gabriela, Esperanza and Deborah estimates were based on a
mixture of Exeter diamond drilling and reverse circulation drill holes. A small
number of Mincorp diamond holes were used within Inferred areas of the resource
estimate.
Exeter and Cube worked collaboratively on producing a set of 3D geological
wireframe models defining the key mineralized components of each prospect. In
most cases, a clear distinction between a main epithermal quartz vein structure
and surrounding stockwork mineralization could be determined based on detailed
geological logging and core photography. The resulting 3D mineralization model
reflects an in-situ geological model whereby no cut-off grade or minimum mining
width criteria has been applied.
The epithermal vein structures at Cerro Moro are relatively narrow with
horizontal widths typically ranging between 0.1m and 5m (Escondida 1.4m, Loma
Escondida 1.0m, Gabriela 2.0m, Esperanza 1.7m and Deborah 4.6m). It is likely
that the full width of the epithermal vein structure will be mined by either
open pit or underground methods with little or no selectivity across the
structure.
Cube has adopted a 2D metal accumulation approach to the estimation for the
epithermal vein structures at Cerro Moro. Samples within the epithermal vein
zones are assigned a unique code that is used to generate a single composite
across the vein structure. The geological composites are projected onto a
vertical 2D plane approximately parallel with the vein structure.
The mid-point of each geological composite is assigned the horizontal width of
the vein structure and used to compute a 'metal accumulation' variable. The
accumulation a(x) is defined as the product of thickness t(x) and grade z(x):
a(x) equals t(x) . z(x)
Exploratory data analysis was undertaken on raw samples, geological composites
and accumulation variables to determine appropriate capping of grade outliers.
Variography was used to characterise the spatial continuity of the horizontal
width and accumulation variables within the plane of the vein structure and to
determine appropriate estimation inputs to the interpolation process.
Gabriela, Esperanza and Deborah demonstrated relatively moderate grade
variability within the plane of the main epithermal vein structure. Block grade
estimates of gold and silver for these veins were achieved using Ordinary
Kriging ("OK") of the accumulation and horizontal width variables into X equals
20m, Y equals 2m and Z equals 20m blocks (local grid). An estimation of this
type is based on the interpolation of two variables, the accumulation a(x) and
the thickness t(x). Final block grade is calculated by dividing the estimated
accumulation by the estimated thickness. Escondida and Loma Escondida are
characterised by distinct shoot like 'bonanza' zones within the plane of the
main epithermal vein structure effectively creating two mineralisation styles:
-- Main Zone ("MZ") - continuous material characterised by classic
epithermal vein textures including crustiform/colloform chalky white
quartz-adularia sulphide banded and brecciated veining typically grading
0.5 to 10 g/t gold;
-- Bonanza Zone ("BZ") - semi-continuous identifiable zones within the MZ.
Characterised by brecciated quartz-adularia sulphide banded vein
'ginguro' material typically grading 10 to 200g/t gold. Associated with
this 'bonanza' zone are gold grades averaging around ten times higher
than the surrounding MZ.
The 'bonanza' zones appear to have sharp boundaries requiring separate domaining
to avoid the over-smoothing properties of OK. Cube adopted an Indicator
Simulation (Sequential Indicator Simulation) approach to objectively define the
BZ and MZ domains. Exploratory data analysis showed that a gold grade indicator
of 10 g/t gold resulted in excellent definition of the BZ shoots. The MZ domain
was further split into a low grade and moderate grade domain using a gold grade
indicator of 2 g/t gold.
All 2D models were subsequently re-located into 3D block models. Stockwork
domains were estimated for Escondida, Gabriela and Esperanza. The stockwork
mineralization surrounding the main epithermal vein zones was estimated using
traditional 3D OK of 1 to 1.5m downhole composites depending on the zone.
All estimates were visually and statistically validated and compared to a
variety of alternative estimation methods resulting in acceptable comparisons.
Densities have been directly assigned to each model on a geological basis.
Significant density testwork has been carried out for the various rock types and
prospects.
Cube has classified a substantial proportion of the Escondida mineral resources
as "Indicated" where drill spacing is 20m x 20m or closer. Cube believes that
this level of drill hole spacing is sufficient to demonstrate acceptable
confidence in the geometry, continuity and grade of the Escondida deposit.
Surrounding areas of Escondida have been classified as Inferred where drill
spacing is wider or where unresolved geological complexity exists. Inferred
resources at Escondida have an appropriate level of drilling information to
support classification into the Inferred category.
Cube is currently finalising a NI 43-101 compliant technical report, which will
be available on SEDAR at www.sedar.com shortly.
Competent Persons Statement
Information in this report relating to Mineral Resources has been estimated and
complied by Mr Ted Coupland, Director and Principal Geostatistician of Cube
Consulting Pty Ltd of Perth, Western Australia. Ted Coupland is a member of The
Australasian Institute of Mining and Metallurgy (AusIMM) and has sufficient
experience that is relevant to the style of mineralization and type of deposit
under consideration and to the activity which he is undertaking to qualify as a
"Qualified Person" as defined in "National Instrument 43-101" of the Canadian
Securities Administrators.
Matthew Williams, Extorre's Exploration Manager and a "qualified person" within
the definition of that term in National Instrument 43-101, Standards of
Disclosure for Mineral Projects, has supervised the preparation of the technical
information contained in this news release.
About Extorre
Extorre Gold Mines Limited is a Canadian public company listed on the Toronto
Stock Exchange under the symbol "XG". It is a spin-out entity from Exeter
Resource Corporation ("Exeter") pursuant to a March 11, 2010 shareholder vote to
split Exeter into two independently focussed companies.
Extorre's assets comprise approximately $24 million in cash plus the Cerro Morro
and Don Sixto projects, and all other Exeter exploration properties in
Argentina. Exeter retained all assets relating to the Caspiche gold-copper
discovery in Chile, together with approximately $45 million in working capital.
The Cerro Moro Project in Santa Cruz Province, Argentina is 100% owned by
Extorre. The Santa Cruz Government mining company, Fomicruz S.E. is entitled to
a 5% participating interest on completion of mine permitting. Three drills are
operating on the project, performing exploration to develop additional
resources, and to a lesser extent to perform engineering related testwork.
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 engineering, environmental, infrastructure and other
studies, and exploration results, budgets for its exploration 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, 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 and silver,
changing foreign exchange rates and actions by government authorities,
uncertainties associated with legal proceedings and negotiations and
misjudgements 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; 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 Exeter's
Information Circular dated February 26, 2010 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.,
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.
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