Exeter grows Caspiche ahead of prefeasibility work (October 04, 2010)

VANCOUVER — The already sizable Caspiche gold-copper porphyry in Chile has grown again and the confidence in the resource has increased, thanks to a 20,000-metre drill program by owner Exeter Resource (XRC-T, XRA-X), and now work has begun on prefeasibility studies for the project.

The global resource now stands at 1.32 billion measured and indicated tonnes grading 0.5 gram gold per tonne, 0.18% copper and 1.14 grams silver per tonne, plus 458 million inferred tonnes averaging 0.35 gram gold, 0.14% copper and 0.98 gram silver. Contained in that resource, which was constrained within the shell of a large open pit, are 26.4 million oz. gold, 6.7 billion lbs. copper and 62.9 million oz. silver.

The Caspiche deposit consists of an oxide blanket over a deeper and higher-grade sulphide resource. The oxide resource comprises about 7.5% of the large open pit’s measured and indicated resource, in terms of tonnage.

In calculating the resource, Exeter also has one other mining scenario: mining the oxide resource through an open pit and then tapping into only the higher-grade, central core of the sulphide deposit using underground block caving. From that perspective, the pertinent oxide resource came in at 71 million measured and indicated tonnes grading 0.5 gram gold and 1.69 grams silver, while the underground sulphide resource totaled 513 measured and indicated tonnes of 0.7 gram gold, 0.29% copper and 1.26 grams silver.

Compared to the last estimate, the total resource tonnage at Caspiche increased by roughly 20% while the grade dropped by almost 11%. As such, the contained metal count only increased slightly. However, the resource confidence increased significantly — some 80% of the deposit is now classified as measured or indicated.

Exeter also developed a new model for the Caspiche deposit, which identified a series of intrusions that are less mineralized than previously thought. The new estimate and model will both feed into the two prefeasibility studies that Exeter hopes to initiate shortly.

One study, aimed for completion by March 2011, will consider the oxide resource alone. The second study, which will not be complete until mid-2011, will investigate the economics of mining both the oxide and sulphide resources.

Exeter also plans to restart drilling at Caspiche in October, with the goal of converting the entire central high-grade core into the measured and indicated categories while investigating the potential for other higher-grade zones. Step-out drilling will also better delimit the deposit.

Exeter investors liked the new resource estimate, lifting the company’s share price 27¢ over two days to reach $7.29. Exeter has a 52-week trading range of $4.33-$9.32 and 76 million shares outstanding.