More ounces lift Extorre

Extorre Gold Mines (XG-T, XG-X) took another step towards production at its Cerro Moro project in southern Argentina with the release of an updated resource estimate.

Indicated resources now stand at 2.42 million tonnes grading 7.4 grams gold and 498 grams silver, for a gold equivalent average grade of 17.4 grams per tonne and 1.35 million gold equivalent ounces.

Inferred resource are now at 4.74 million tonnes grading 3.5 grams gold and 172 grams silver for a gold equivalent grade of 6.9 grams gold for 1.05 million gold equivalent ounces.

Gold equivalent ounces were calculated by dividing silver ounces by 50, then adding those ounces to the gold-only ounces.

The updated estimate includes resources from a new zone, Zoe, which wasn’t part of the previous estimate released back in April.

Despite getting the update finished, Extorre doesn’t plan on shelving the drills any time soon as it says it will be turning four rigs at the project in the new year, with two rigs continuing to work on the Zoe deposit while another tests extensions at depth and the fourth explores 3-km east of Zoe with the hopes of finding a new deposit.

Back in April the company released a pre-feasibility study that proposed mining the area with a combination of open pit and underground methods at an operating at a rate of 1,000 tonnes per day over an 8.25 mine life.

Total life of mine output was estimated to be 494,700 oz. of gold and 26.6 million oz. of silver, with the mine turning out an average of 206,300 oz. of gold equivalent per year for the first 3 years at cash costs of US $236 per gold equivalent ounce.

The study also estimated that it would cost Extorre US$150 million to build the mine. The company currently has $27 million in cash on its books.

Cerro Morro sits in the pro-mining state of Santa Cruz and is roughly 90-km away from a deep water port and 80-km from a grid power.

The results of the resource update helped send Extorre shares 11¢ higher to $7.86 in Toronto on Dec. 19 on volume of 364,918.