Extorre Gold Mines Limited
TSX : XG
FRANKFURT : E1R
NYSE Amex : XG

Extorre Gold Mines Limited

October 26, 2011 23:37 ET

Extorre Responds to New Argentine Foreign Currency Transfer Regulations

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 26, 2011) - Extorre Gold Mines Limited (TSX:XG) (NYSE Amex:XG) (FRANKFURT:E1R) ("Extorre" or the "Company") wishes to inform shareholders of the events in Argentina that led to today's drop in its share price.

Today the Federal Government of Argentina announced that future export revenues derived from mining operations must be repatriated to Argentina and converted to Argentine currency prior to being distributed either locally or back overseas. The distribution of earnings back overseas would require the Argentine currency to be reconverted to foreign currency for repatriation. This overturns the benefits provided in 2002 and 2003-04 to all Argentine oil and mining companies, respectively, that exempted them from the currency repatriation laws that apply to all other primary producers in the country.

A preliminary analysis of the new decree by our legal counsel in Buenos Aires indicates that it does not change the current regulations that allow, subject to the Argentinean central bank rules, the unlimited purchase and transfer of foreign currency to offshore destinations in consideration for debt repayment facilities or approved and budgeted dividend payments.

Extorre will continue to seek advice from our Argentine legal counsel and other advisors for further clarification of the financial and operational implications of the new regulations. The effect of this new regulation will be factored into the revised economic studies to be undertaken utilizing the updated resource, including the Zoe discovery, which is expected to be released during Q4.

In the meantime, we are continuing with the scheduled engineering and economic studies for which the Company is fully funded.

About Extorre

Extorre is a Canadian public company listed on the Toronto and NYSE Amex Exchanges (symbol XG). The assets of the Company comprise $34 million in cash, the Cerro Moro, Puntudo and Don Sixto projects, and other mineral exploration properties in Argentina.

On August 4, 2011 Extorre announced the results of the second Preliminary Economic Assessment ("PEA-2") for a potential mine development at Cerro Moro. The study was based on the interim (April, 2011) NI 43-101 compliant mineral resource estimate which does not include any resources from the Zoe discovery, as this was still being drilled at that time. In PEA-2 production is based on an 8.25 year, 1,000 tonnes per day mining and processing operation to produce a total of 494,700 ounces of gold and 26.6 million ounces of silver. The proposed mine would produce an average of 206,300 ounces gold equivalent** per year for the first 3 years at a cash cost of $US236/ounce gold equivalent*. PEA-2 did not include.

Click here for a link to the National Instrument 43-101 compliant report.

The Company expects to release an updated resource statement in Q4-2011 to include the Zoe discovery and three other deposits. That resource statement will lead to a revised economic assessment and a revision to the Environmental Impact Assessment approval received on May 17, 2011.

* Gold equivalent ounces are calculated by dividing silver ounces by 50 and adding this figure to gold ounces.

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 the Company's Annual Information Form for the fiscal period ended December 31, 2010, dated March 25, 2011 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
    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 1660, 999 West Hastings St.
    Vancouver, BC
    Canada V6C 2W2
    extorre@extorre.com
    www.extorre.com