Santa Cruz gov’t approves Extorre’s EIA for Cerro Moro

The provincial government of Santa Cruz in southern Argentina has approved the environmental impact assessment of the proposed Cerro Moro gold-silver mine, Extorre Gold Mines (XG-T, XG-X) reports, and the results of a prefeasibility study are expected this June.

Extorre has acquired a 140-sq.-km ranch that covers the principal vein zones at the project, which will give the company full ownership of the surface rights covering the Escondida, Zoe, Loma Escondida, Esperanza and Babriela zones. It also covers the area that Extorre has chosen to build processing facilities and infrastructure for a mine.

Eric Roth, the company’s president and chief executive, noted that the deposit’s “very high-grade” gold-silver veins should allow Extorre to “obtain near term, low cash-cost gold-silver production from a relatively modest capital investment.”

According to the preliminary economic assessment (PEA) in October 2010, project CAPEX is estimated at US$131 million (of which 21% is a value added tax that is refundable after production starts). The PEA outlined average annual production in the first five years of operation of 133,500 gold equivalent oz. at cash costs of US$201 per oz. Project economics were calculated using a gold price of US$950 per oz. and a silver price of US$16 per oz. 

Currently four drill rigs are active at Cerro Moro.

At presstime the company held $28 million in cash and traded at $9.25 per share. Over the last year the junior has traded between $2.41 per share (July 9, 2010) and $10.03 per share (May 10, 2011). Extorre has about 87.6 million shares outstanding.