Two sets of gold results push Exeter up 48% (June 18, 2007)

Vancouver — Strong gold results out of Argentina on the back of good gold grades from Chile had investors interested in Exeter Resources (XRC-V, XRA-X) recently, pushing its share price up 48% to $3.74 from $2.35 in two weeks.

Exeter, which holds several gold-silver projects in Argentina and Chile, is expecting an updated resource estimate for its largest site — the Don Sixto (previously called La Cabeza) property in southern Mendoza province, Argentina — this month. But lately, it is the company’s exploration-stage projects that are garnering attention.

In late May, Exeter released drill results from its Caspiche property in the Maricunga gold district of Chile showing continuous, deep gold porphyry mineralization. Core hole 13 intersected 304 metres grading 0.9 gram gold per tonne, starting 40 metres down-hole. The mineralization remains open at depth.

“The professional reaction by analysts was, ‘Wow, tell us more about what you’ve got there,'” says Exeter chairman Yale Simpson. “Knowing the Maricunga gold porphyry district — there’s always interest in another project. And we’re halfway between two strong mines; it’s the right address, so to speak.”

Simpson says Exeter will now work on completing a detailed induced-polarization survey to pin down the shape of the porphyry project, which it will continue drilling in the fall.

“Hopefully by May next year, we will be able to produce a (National Instrument) 43-101 resource estimate,” Simpson says.

The Maricunga gold belt hosts a number of large gold deposits, including the Refugio/Verde and Cerro Casale deposits. Anglo American (AAUK-Q) subsidiary Anglo American Chile and Mantos Blancos held the properties within the Caspiche project for some time. In 2004, Exeter and Anglo worked out an agreement allowing Exeter to earn a 100% interest in the projects, minus a 3% net smelter return from production to Anglo, by investing US$2.55 million and completing 15,500 metres of drilling. Exeter began field exploration in late 2005.

Two weeks after the Caspiche results, Exeter released core results from one of its Argentinean projects: the Cerro Moro site in northeastern Santa Cruz province. At Cerro Moro, Exeter is focusing efforts on the eastern side of the Escondida vein structure, where one of the latest drill holes (98) intersected 3.83 metres grading 127.7 grams gold, including a 1.1-metre interval grading 464.6 grams gold. Silver results are not yet available for this hole because samples returned assays above the upper detection limit of 10,000 grams per tonne.

Hole 89 returned 30.3 grams gold and 1,173 grams silver over 2.85 metres, including 0.32 metre grading 263 grams gold and 9,370 grams silver. Drilling is continuing on the Escondida structure, which remains open along the strike and at depth. The east structure has been traced over a strike length of 700 metres, and to date, 300 metres of the western offset has been exposed.

Exeter came into the Cerro Moro property also in 2004, when the company worked out an option agreement with AngloGold Ashanti (AU-N) Cerro Vanguardia S.A. (CVSA) to acquire the rights to all 39 properties contained in CVSA’s four exploration projects in Patagonia, Argentina — not including those surrounding CVSA’s Cerro Vanguardia gold mine. Exeter is obliged to spend US$3 million over five years and drill a total of 10,000 metres on the projects.

The Cerro Moro project is the only CVSA property that has seen exploration, and therefore become Exeter’s first focus. In all, 22 prospect areas covering 16 vein structures and six potential veins were discovered. According to Simpson, those vein structures are obvious targets: prominent, high quartz, high silica structures. Exeter decided to probe to the south of the explored region, and in doing so moved lower in the epithermal system.

“Other veins drilled on this project didn’t have big sulphide components, but that is what we found in the south — in the Escondida veins,” Simpson says. “The potential for this kind of mineralization is kind of a surprise, but Argentina is like that — different kinds of deposits.”

The Escondida core is also being assayed for base metals, and Simpson expects to release those numbers shortly.

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