Exeter hits high grades at Cerro Moro ahead of spin-off

Vancouver – Exeter (XRC-T) keeps hitting high gold and silver grades at its Cerro Moro project in Argentina as it continues in-fill drilling on the site. The good news comes as the company is preparing to spin out the project into a separate company in order to focus on its flagship project, the Caspiche gold-silver-copper project in Chile.

Out of the latest 48 holes drilled into Cerro Moro, 28 holes returned high grade intercepts and of those 12 hits were very high grade. Highlights include a 5.4-metre intercept carrying 64.4 grams gold per tonne and 5,131 grams silver per tonne starting 70 metres downhole; a 6.1-metre hit grading 56.4 grams gold and 2,496 grams silver at 114 metres depth; an 8-metre interval averaging 30.3 grams gold and 1,574 grams silver from 74 metres depth; and a 2.4-metre hit grading 60.2 grams gold and 3,407 grams silver at 163 metres depth.

The recent drill results, combined with a further 85 holes waiting to be assayed, will allow Exeter to upgrade much of the Escondida vein resource from inferred to indicated, according to Exeter’s exploration manager Matt Williams. The new resource estimate should be complete by April.

Exeter achieved full ownership of the Cerro Moro project in late 2007, with AngloGold Ashanti (AU-N, AGD-L) keeping a 2% net smelter return from production. Cerro Moro is located in the north-east of Santa Cruz province, about 70 km southwest of the port town of Puerto Deseado and about 130km east of AngloGold’s established Cerro Vanguadia gold-silver mine. Road access is along gravel provincial highways with a network of tracks providing “reasonable to good access within the project area,” according to the company.

At Cerro Moro, low sulphidation epithermal gold and silver mineralization is mostly contained in quartz-bearing veins that sit between 240 and 1250 metres depth, in volcanic rocks are locally overlain by Tertiary basalts and Quaternary gravels and sediments. Silver content is often high, with many trenches and drill holes assaying over 500 grams silver.

Exeter’s spin-off plans, announced in January, will see Cerro Moro, as well as other exploration assets in Argentina and $25 million in working capital, transferred to a new company. Exeter shareholders, who will vote on the plan Mar. 4, are to get one share of the new company for each Exeter share held.

The split will allow Exeter to focus on developing Caspiche in Chile, the company’s other major project. Caspiche hosts a porphyry resource with an inferred sulphide count of 1.02 billion tonnes grading 0.55 gram gold, 1.14 grams silver, and 0.22% copper. An oxide cap on the sulphide resource contributes another 100 million tonnes averaging 0.5 gram gold and 2.49 grams silver.

The Caspiche Porphyry is described as a stockwork-hosted, gold-copper porphyry, with high-sulphidation epithermal gold mineralization overprinting the upper portion of the system. Copper has been almost totally leached from the relatively flat lying oxide zone.

The Caspiche project is located near some major players, with Barrick Gold (ABX-T, ABX-N) and Kinross Gold‘s (K-T, KGC-N) Cerro Caasa gold-copper deposit 10 km south and Kinross’ Refugio mine 15 km north, while Andina Minerals’ (ADM-V) new Volcan gold deposit is 35 km north-northeast. The property covers 1,262 hectares, with total holding in the area at 3311 hectares. Exeter is primarily exploring two main zones, known as Caspiche Porphyry and Caspiche Epithermals.

Exeter’s ongoing exploration efforts continue to yield results. In January the company announced that step-out drilling 500 metres west of the Caspiche Porphyry also found gold, with one drill hole returning 300 metres grading 0.5 gram gold.

Exeter secured the property, as well as a number of others, in an option agreement with Anglo American (AAUK-L) in 2005 with the promise to drill and explore the area. Exeter has since met the minimum exploration requirements, and plans to exercise the option soon. Anglo American will be entitled to a 3% net smelter return.

In recent weeks Exeter’s share price has dipped below $7 and reached as high as $9. The company has a 52-week trading range of $9.32 to $2.46 and 73.9 million shares outstanding.