Exeter hits high grade at La Cabeza

Drilling by Exeter Resource (XRC-V) on the La Cabeza gold project in western Argentina has returned several high-grade intervals.

Hole 107 intersected 30 metres averaging 13 grams gold per tonne, including 3 metres of 52 grams, starting at a depth of 10 metres. Another hole, drilled 50 metres north of Hole 107, returned 9 metres averaging 8.2 grams gold, including 3 metres of 21.2 grams, starting from surface.

These intersections are from the first holes of an ongoing prefeasibility program budgeted at $1.1 million. The program will include at least 2,800 metres of drilling to convert inferred resources to the indicated category. Plans also call for engineering and metallurgical tests and environmental studies.

La Cabeza is a low-sulphidation, epithermal gold deposit in southern Mendoza province. At last report, it contained an inferred resource of 11.9 million tonnes averaging 1.83 grams gold, based on a cutoff grade of 0.5 gram gold. If the cutoff is raised to 1 gram, the inferred resource drops to 6.8 million tonnes at 2.82 grams.

About half the existing resource is within 50 metres of surface, whereas 80% is within 100 metres of surface, suggesting the resource could be mined by open-pit methods.

The company also sees potential for higher-grade mineralization to be mined using underground techniques from the bottom of the open pits.

Earlier this year, Exeter released details of a preliminary scoping study that estimated capital costs of US$22 million for a combined open-pit/underground operation.

The study estimates annual production of 35,000-45,000 oz. from the open pit and 45,000-60,000 oz. from underground. The prefeasibility study will provide more accurate numbers.

Exeter has other projects in Argentina, though La Cabeza is the most advanced. Reconnaissance work is under way at the newly acquired Cerro Moro gold-silver project in Patagonia.