Extorre Gold Mines Limited
TSX : XG
FRANKFURT : E1R
OTCQX : EXGMF

Extorre Gold Mines Limited

January 24, 2011 09:01 ET

Extorre Gold Mines Limited: Cerro Moro Infill Drilling for Pre-Feasibility Study Completed- Drilling Now Focussed Entirely on New Veins and Extensions

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 24, 2011) - Extorre Gold Mines Limited (TSX:XG) (FRANKFURT:E1R) (OTCQX:EXGMF) ("Extorre" or the "Company") is pleased to report high gold-silver grades from the final assay batch of the infill drilling program at its 100% owned Cerro Moro Project in Santa Cruz Province, Argentina. The purpose of the infill drilling at the Gabriela and Loma Escondida vein zones was primarily to upgrade Inferred category resources to the Indicated category. Only Indicated resources will be included in the Cerro Moro Pre-Feasibility Study ("PFS"), which is due for completion in the second quarter of 2011.

Of the 46 drill holes completed, 24 returned significant results including the following exceptional intercepts:

Gabriela Vein

MD1066 intersected 4.80 metres ("m") at 12.4 grams per tonne ("g/t") gold + 1,603 g/t silver (39.1 g/t gold equivalent*)

including 0.79 m at 70.7 g/t gold + 8,935 g/t silver (219.6 g/t gold equivalent*)

Loma Escondida Vein

MD1073 intersected 2.63 m at 14.8 g/t gold + 1,208 g/t silver (35.0 g/t gold equivalent*)

including 0.30 m at 81.5 g/t gold + 6,851 g/t silver (195.7 g/t gold equivalent*)

MD1087 intersected 0.77 m at 105.3 g/t gold + 1,592 g/t silver (131.8 g/t gold equivalent*) 

including 0.35 m at 224.1 g/t gold + 2,748 g/t silver (269.9 g/t gold equivalent*)

Eric Roth, Extorre´s President and CEO, stated "The infill drill program has been successful in confirming continuity of high grade gold-silver mineralization in both the Loma Escondida and Gabriela vein zones. These veins are very important as they will potentially provide high grade open pit ore to the Cerro Moro plant in the early production years. It is noteworthy that this batch of results includes the highest silver-gold grades obtained to date from the Gabriela vein

"The completion of the infill drilling allows us to focus the four rigs on establishing the upside of the extensive Cerro Moro vein system. We expect to drill +5,000 metres per month through 2011, allowing us to test many targets that have had little or no drilling to date."

Significant results from Gabriela vein infill drilling (at a 1.0 g/t gold equivalent* cut-off grade):

Drill Hole From
(m
) To
(m
) Width
(m
) Gold
(g/t
) Silver
(g/t
) Gold
Equivalents*
(g/t
) Gold
Equivalents*
(oz/ton
)
MD1053 90.65   97.45   6.80   1.9   218   5.5   0.16  
including 91.00   92.00   1.00   4.1   421   11.1   0.32  
MD1056 38.00   48.00   10.00   1.5   223   5.2   0.15  
including 40.00   41.07   1.07   5.4   678   16.7   0.48  
MD1058 64.00   69.10   5.10   1.2   186   4.3   0.12  
MD1059 20.00   23.20   3.20   1.8   142   4.2   0.12  
including 21.15   21.60   0.45   5.5   424   12.5   0.36  
MD1062 46.33   49.40   3.07   5.8   507   14.3   0.41  
including 48.11   48.75   0.64   18.3   1,044   35.7   1.04  
MD1064 70.41   72.51   2.10   2.7   342   8.4   0.24  
MD1066 59.60   64.40   4.80   12.4   1,603   39.1   1.13  
including 62.46   63.25   0.79   70.7   8,935   219.6   6.37  
MD1072 69.00   72.00   3.00   3.3   498   11.6   0.34  
including 70.32   70.78   0.46   13.1   1,773   42.7   1.24  
MD1077 10.73   20.50   9.77   2.0   278   6.7   0.19  
including 18.42   19.62   1.20   7.4   1,277   28.7   0.83  
MD1078 45.00   53.00   8.00   1.8   213   5.4   0.16  
including 51.00   53.00   0.60   4.8   543   13.9   0.40  
MD1081 24.00   34.50   10.50   2.1   258   6.4   0.19  
including 26.40   26.70   0.30   7.8   975   24.0   0.70  
and 32.80   33.10   0.30   11.6   1,676   39.5   1.15  
MD1083 54.50   60.00   5.50   1.9   422   8.9   0.26  
including 56.45   57.05   0.60   4.6   1,290   26.1   0.76  
MD1086 47.60   53.00   5.40   4.2   795   17.5   0.51  
including 48.26   49.67   1.41   10.6   1,871   41.7   1.21  
MD1098 102.00   103.80   1.80   2.0   275   6.5   0.19  
MD1100 95.00   97.55   2.55   1.8   190   5.0   0.15  
                             

Significant results from Loma Escondida vein infill drilling (at a 1.0 g/t gold equivalent* cut-off grade):

Drill Hole From
(m
) To
(m
) Width
(m
) Gold
(g/t
) Silver
(g/t
) Gold
Equivalents*
(g/t
) Gold
Equivalents*
(oz/ton
)
MD1069 4.43   6.00   1.57   10.0   371   16.2   0.47  
including 5.00   5.43   0.43   32.0   1,182   51.7   1.50  
MD1073 16.47   19.10   2.63   14.8   1,208   35.0   1.02  
including 17.10   17.40   0.30   81.5   6,851   195.7   5.68  
MD1079 39.78   40.55   0.77   4.7   294   9.6   0.28  
MD1082 13.00   16.50   3.50   9.6   539   18.5   0.54  
including 14.50   15.00   0.50   30.2   1,733   59.1   1.71  
MD1084 39.17   39.95   0.78   26.1   1,420   49.8   1.44  
Including 39.17   39.55   0.38   52.5   2,690   97.3   2.82  
MD1087 31.73   32.50   0.77   105.3   1,592   131.8   3.82  
including 31.73   32.08   0.35   224.1   2,748   269.9   7.83  
MD1089 41.80   42.20   0.40   9.65   905   24.7   0.72  
MD1091 18.50   18.85   0.35   17.3   1,184   37.0   1.07  
                             

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

Note: Drill hole MD1036 at Loma Escondida appears to have intersected significant mineralization but results are still pending.

The infill drill results from the Gabriela and Loma Escondida veins will form part of the database for an updated independent mineral resource estimate. The new mineral resource model will be delivered to Santiago-based NCL Ltda who will update the mining plan and ore delivery schedule for inclusion in the PFS.

The results from an additional 48 drill holes are expected to be released to the market within the next two weeks. These drill holes are part of the discovery drilling program and represent the final batch of samples from 2010 drilling. All drilling and field operations have resumed from a Christmas to New Year recess period. Acme Analytical Laboratories are expected to commence on-site sample preparation at Cerro Moro on February 1. 

Please visit the following link for the long sections and plans: http://www.extorre.com/pdf/release/diagram_08.pdf

Marina Trasolini appointed Vice President - Corporate Development 

Extorre is also pleased to announce the appointment of Ms. Marina Trasolini as Vice President - Corporate Development. Marina currently holds Bachelor of Science - Geology and Bachelor of Education - Secondary Science degrees from the University of British Columbia (UBC), and will shortly complete an MBA in Finance from the same institution. Before joining Extorre, Ms. Trasolini worked as the Senior Research Analyst for renowned newsletter writer Lawrence Roulston, editor of the Resource Opportunities Investment Newsletter. In that role she became well versed in corporate finance, equity financings, company valuations and M&A dealings in the mining sector. Prior to this, Ms. Trasolini worked for a junior exploration company as an exploration geologist. 

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 the 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 $42 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 PEA of the Cerro Moro Project on October 19, 2010. The PEA highlighted the robust economics of a future Cerro Moro mine expected to produce an average of 133,500 gold equivalent* ounces annually during the first 5 years of operations. The cash cost per ounce (gold equivalent*) is estimated to be US$ 201 per ounce. Project CAPEX has been estimated at US$ 131 million (of which 21% is a VAT that is refundable after production commences). The project payback period is 1.8 years. The project economics were calculated using gold and silver prices of US$ 950/ounce and US$ 16/ounce, respectively. 

Extorre submitted an 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

EXTORRE GOLD MINES LIMITED
Eric Roth
President and CEO
extorre@extorre.com
Suite 1260, 999 West Hastings St.
Vancouver, BC Canada  V6C 2W2

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.

NEITHER THE TSX NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS NEWS RELEASE

Contact Information

  • Extorre Gold Mines Limited
    Rob Grey
    VP Corporate Communications
    604.681.9512 or Toll-free: 1.888.688.9512
    604.688.9532 (FAX)
    www.extorre.com