Becoming a globally recognized gold company
Exeter Resource Corporation is a Canadian public company listed on the Toronto Stock Exchange (TSX) under the symbol XRC and NYSE Amex Exchange using the symbol XRA. Our focus is the discovery, evaluation and development of gold deposits in Chile and Argentina.
On January 19, 2010 the Board of Directors of Exeter approved a proposal to undertake a spin-out transaction pursuant to which the assets of Exeter would be separated into two highly focused companies. Under the proposed transaction, Exeter will retain all assets relating to the Caspiche gold-copper discovery, together with approximately $50 million in working capital, and become a Maricunga district, Chile, focused exploration company. Exeter will transfer to a new corporation, Extorre Gold Mines Limited (“Extorre”), the Cerro Morro and Don Sixto projects and all other exploration properties in Argentina, together with approximately $25 million in working capital. Extorre will seek listings on the TSX and the OTC-QX or NYSE Amex exchanges. The transaction is subject to shareholder and regulatory approvals, including approval of the Toronto Stock Exchange, the NYSE Amex and the Supreme Court of British Columbia.
The spin-out of Extorre is designed to create value for Exeter shareholders by unlocking the value of Cerro Moro and the other exploration properties in Argentina. Extorre will be an emerging gold-silver producer, leaving Exeter as a single asset company focused on the advancement of the Caspiche gold copper discovery. The spin-out proposal would result in each Exeter shareholder of record on the effective date of the transaction receiving one share in Extorre for each share held in Exeter. There will be no change in shareholder’s holdings in Exeter.
Exeter shareholders will be asked to vote on the proposal at a special meeting of shareholders to be convened on March 11, 2010 at 3:00 pm at the Company’s offices in Vancouver, British Columbia. Further to the initial announcement, the Company announced on February 18, 2010 that it had mailed a detailed information circular describing the business to be conducted at the meeting.
Dr. Eric Roth will be the Chief Executive Officer and President of Extorre. Eric has worked as a mine geologist on gold mines in Australia and Chile, and as an exploration geologist globally for BHP, the Rio Tinto Group companies and AUR Resources. More recently, Eric was Global Exploration Manager for AngloGold Ashanti. Darcy Daubaras will be the Chief Financial Officer.
The board of directors will consist of Yale Simpson, Bryce Roxburgh, Louis Montpellier, Cecil Bond, Robert Reynolds and Ignacio Celorrio.
As of February 1, 2010 Exeter had $75 million dollars, a cash reserve considered sufficient to fund expenditures over the next year at current levels of activity. Those expenditures include drilling at Caspiche and the planned expenditure in Argentina following the spin-out of Extorre. Both companies plan to retain sufficient cash reserves so that their longer term viability is ensured.
Exeter’s Caspiche Project in Chile (option to own 100% from Anglo American Chile Limitada) is a gold-copper porphyry system, a type of deposit common to many of the world's largest open pit gold-copper mines. It is located 15 kilometres (8 miles) south of Kinross Gold's Refugio mine (+6 million ounce gold resource), and 10 kilometres (6 miles) north of the very large Cerro Casale gold-copper deposit (24 million ounce gold resource), jointly owned by Kinross Gold and Barrick Gold.
In October 2009 Exeter announced an updated National Instrument 43-101 (“NI 43-101”) compliant mineral resource estimate for Caspiche, for all drilling conducted to the end of the 2008-2009 drill season. The inferred resource is 19.6 million ounces gold, 4.84 billion pounds of copper, and 40 million ounces of silver, or 32.4 million gold equivalent ounces (refer to October 20, 2009 News Release). The additional 12.8 million ounces of gold equivalent is calculated using a copper conversion price of US$2.00 per pound, a silver price of US$12.00 per ounce and a gold price of US$800 per ounce (assuming 100% recovery). The resource estimate leaves the deposit open for expansion to the west, southeast and to depth.
Six drill rigs are currently operating at Caspiche to complete a program designed to expand the deposit and to upgrade the highest grade portion of the deposit to “indicated resource” status. An updated NI 43-101 compliant interim resource estimate is scheduled for March 2010. Infrastructure, metallurgical, engineering and environmental studies are being run concurrently with the drilling. The Company has budgeted C$24 million to conduct the program through to December 2010.
The Cerro Moro Gold-Silver Project in Santa Cruz Province, Argentina is 100% owned by Exeter, with the Santa Cruz Government Mining Company, Fomicruz S.E. entitled to a 5% interest, on completion of mine permitting.
In July, 2009, Exeter announced an initial NI 43-101 inferred mineral resource estimate for drilling completed to the end of 2008. The inferred resource is 646,000 ounces gold equivalent at a grade of 18 grams per tonne ("g/t") gold equivalent (refer to the July 8, 2009 Press Release). The Company has now completed the in-fill drilling on the Escondida vein and expects to announce a new resource estimate in April 2010. That estimate will focus on “indicated resources” for the Escondida vein, where drilling to the end of 2008 had established 518,000 ounces gold equivalent at a grade of 34 g/t gold equivalent (inferred resource).
As drilling has proceeded, engineering, environmental and infrastructure studies have been advanced to meet a mid-year date for a preliminary assessment study. That study will form the basis of a mine development decision and the submission of the project to Provincial authorities for permitting.
Three drill rigs are currently deployed to discover and expand the near-mine resources. The Escondida vein has significant potential both at depth and along strike. In addition, other veins on the property with high grades are known but as yet have only been partially evaluated. Outside of the Cerro Moro project, the company will initiate drilling programs to realize the discovery potential of other properties controlled by Exeter.
In June 2007, the Mendoza government passed legislation that severely restricts mining in Mendoza Province, where the Company’s Don Sixto project is located. The Company is hopeful that in due course mining will be permitted for projects that are both economically viable and developmentally sustainable.
