Extorre Gold Mines Limited

Extorre Gold Mines Limited

December 06, 2010 09:00 ET

Extorre Discovers New Silver Rich Vein at Cerro Moro Project

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 6, 2010) - Extorre Gold Mines Limited (TSX:XG) (FRANKFURT:E1R) (OTCQX:EXGMF) ("Extorre" or the "Company") is pleased to report assay results from the first six diamond drill holes completed on the new, silver rich, Lucia vein at Cerro Moro in Santa Cruz Province, Argentina. The vein is a new discovery located approximately 10 kilometres (6.2 miles) northeast of the high grade Escondida zone. The target structure at Lucia is over 2.5 kilometres (1.6 miles) long on the basis of geophysical (ground magnetic) data. At surface it consists of a poorly outcropping, quartz-adularia vein/stockworks zone that strikes northwest-southeast, a trend common to the majority of the high grade veins on the property. 

The initial drill holes at Lucia were targeted on a 250 metre ("m'), (820 feet) long section of the vein, below a high grade surface outcrop. Highlights from two of the six diamond drill holes follow:

 MD998 intersected 5.15m at 5.9 g/t gold + 1,083 g/t silver (23.9 g/t gold equivalent*)
 MD1003 intersected 0.4m at 5.1 g/t gold + 1,247 g/t silver (25.9 g/t gold equivalent*)

Extorre´s Co-Chairman, Bryce Roxburgh stated, "The discovery of a second silver dominant vein in the northern sector of the Cerro Moro vein field (Gabriela was the first) has significant implications for the project. Historically, 40% of the project value lies with silver, yet with increasing silver prices and the identification of additional silver dominant veins, Cerro Moro has the potential to transition to a silver dominant deposit. The intersection of bonanza silver and gold values within the intercept quoted above for the first hole, MD998, of 0.45m at 51.8 g/t gold and 10,987 g/t silver (234.9 g/t gold equivalent*) clearly supports drill testing the entire length of the Lucia target to test for Escondida-style bonanza shoots. In a separate news release, we will provide an update on drill results from the other veins being drilled on the property." 

The Lucia vein occupies an interpreted boundary fault that separates a block of volcanic rocks from a sedimentary sequence. Lucia appears to be a similar structure with a like geological setting to the Escondida vein, 10 kilometres (6.2 miles) to the southwest, which hosts 60% of the total currently reported Cerro Moro resource. Results presented also suggest that the Lucia mineralization may occur in irregular shaped shoots similar to those at Escondida.

Northwestern and southeastern extensions to the Lucia structural zone are clearly evident in our geophysical data. These extensions are currently being evaluated with widely spaced (160m (525 feet) apart) diamond drill holes over a 2.5 km (1.6 mile) distance.

Pre-feasibility study infill drilling, with the aim of converting existing Inferred resource category mineralization to higher confidence categories at both the Gabriela Central and Loma Escondida zones, is now essentially complete. The Company will now deploy three of the four diamond drill rigs currently on site to defining new gold and silver resources on the property. Priority targets for new resource drilling include the Lucia, Gabriela extensions, Esperanza, Carla and Martina zones. Extorre remains on track to release a new resource estimate in Q2-2011.

For consistency in reporting the Company will continue to report gold equivalent grades. The results below from the six holes at Lucia use a 1.0 g/t gold equivalent* cut-off grade:

Drill Hole From
) To
) Width
) Gold
) Silver
) Gold
) Gold
MD998 33.00   38.15   5.15   5.9   1,083   23.9   0.76  
including 33.90   34.35   0.45   51.8   10,987   234.9   7.56  
and 35.20   35.70   0.50   4.9   673   16.2   0.52  
MD1003 69.00   69.70   0.70   0.4   70   1.5   0.05  
and 78.85   80.55   1.70   0.4   103   2.1   0.06  
and 85.45   85.85   0.40   5.1   1,247   25.9   0.83  
MD1009 62.60   63.80   1.20   1.5   3   1.5   0.04  
and 67.22   69.00   1.78   0.5   65   1.6   0.05  
MD1014 74.90   75.70   0.80   0.8   296   5.8   0.19  
MD1018 165.20   167.00   1.80   0.7   30   1.2   0.04  
MD1025 50.90   52.55   1.65   1.2   108   3.0   0.10  

* Gold equivalent grade is calculated by dividing the silver assay result by 60, adding it to the gold value and assuming 100% metallurgical recovery.

Click Here for the long sections and plans: http://www.extorre.com/pdf/release/diagram_06.pdf

Quality Control and Assurance
Drill widths presented above are drill intersection widths and may not represent the true widths of mineralization.

Gold assay results presented above are preliminary with no cutting of high grades. All diamond drill core samples are split on regular metre intervals or on geological contacts and represent sawn half HQ-size core. Reverse circulation drill samples are collected using a cyclone in one metre intervals. Samples were prepared at the Acme Analytical Laboratories ("AcmeLabs") preparation facility in Mendoza, Argentina and assayed by fire assay (50 gram charge) at the AcmeLabs laboratory in Chile, both ISO-9001:2000 certified laboratories.

Check assaying of all samples assaying greater than 1.0 g/t gold is completed by Acme Labs. Samples returning greater than 10 g/t gold and/or greater than 100 g/t silver are assayed using gravimetric analyses. Standard and blank samples are used throughout the sample sequence as checks for the diamond drilling reported in this release. Standard, blank and duplicate samples are used throughout the sample sequence as checks for RC percussion drilling.

Assaying by the screen fire assay method has been implemented in conjunction with standard 50 gram fire assaying, for diamond drill cores that contain visible gold. The procedure for screen fire assaying involves crushing and sieving of a nominal 1,000 gram sample to a particle size of 100 microns. All material which does not pass through the 100 micron sieve is then assayed. Two fire assays are undertaken on the undersize material as a check on homogeneity. The total gold content is then calculated.

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 is a Canadian public company listed on the Toronto Stock Exchange (symbol XG) and on the OTCQX (symbol EXGMF). Extorre's assets comprise approximately $47 million in cash, the Cerro Morro and Don Sixto projects, and other mineral exploration properties in Argentina.

On April 19, 2010, Extorre announced an updated National Instrument 43-101 compliant mineral resource estimate for Cerro Moro:

Indicated Category: 357,000 oz. gold + 15.3 million oz. silver (612,000 oz. gold equivalent*), plus
 Inferred Category: 190,000 oz. gold + 12.0 million oz. silver (390,000 oz. gold equivalent*)

The 612,000 ounce gold equivalent* indicated resource, has an average grade of 32.3 g/t gold equivalent*, a grade considered exceptional by industry standards. The silver contribution is high, accounting for over 40% of the metal value. Additional inferred resources of 390,000 ounces gold equivalent* are also reported from Cerro Moro.

Extorre released the results of a Preliminary Economic Assessment (PEA) of the Cerro Moro Project on October 19, 2010. The PEA highlighted the robust economics of the future Cerro Moro mine, in which an average of 133,500 gold equivalent* ounces would be produced during the first 5 years of operation at a cash cost of US$ 201 per ounce (net of silver credits). Project CAPEX has been estimated at US$ 131 million (of which 21% is tax that is refundable after production commences), with a payback period of 1.8 years. The project economics were calculated using gold and silver prices of US$ 950/ounce and US$ 16/ounce, respectively. 

Extorre also submitted its Environmental Impact Assessment for the Cerro Moro mine development to Santa Cruz Authorities on September 16, 2010. Mining permits and approvals for the Cerro Moro mine are expected to be received by the end of Q1-2011.

You are invited to visit the Extorre web site at www.extorre.com.

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 our belief as to the extent and timing of its drilling programs, various studies including the PEA and the Environmental Impact Assessment, and exploration results the potential tonnage, grades and content of deposits, timing, establishment and extent of resources estimates, potential production from and viability of its properties, production costs and permitting submission and timing. 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 we have based these forward-looking statements on our 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 misjudgments in the course of preparing forward-looking information. In addition, there are known and unknown risk factors which could cause our 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 of our officers, directors or promoters of with certain other projects; the absence of dividends; currency fluctuations; competition; dilution; the volatility of the our common share price and volume; tax consequences to U.S. investors; and other risks and uncertainties, including those relating to the Cerro Moro project and general risks associated with the mineral exploration and development industry described in our interim financial statements and MD&A for the fiscal period ended March 31, 2010 filed with the Canadian Securities Administrators and available at www.sedar.com.
Although we have 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. We are 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 SEC 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.


Contact Information

  • Extorre Gold Mines Limited
    Eric Roth
    President and CEO
    604.681.9512 or Toll-free: 1.888.688.9512
    604.688.9532 (FAX)
    Extorre Gold Mines Limited
    Rob Grey
    VP Corporate Communications
    604.681.9512 or Toll-free: 1.888.688.9512
    604.688.9532 (FAX)
    Extorre Gold Mines Limited
    Suite 1260, 999 West Hastings St.
    Vancouver, BC Canada V6C 2W2