Exeter Resource Corporation: La Cabeza Gold Project Development Program on Track
VANCOUVER, British Columbia--(Business Wire)--March 2, 2006--
Exeter Resource Corporation (TSX VENTURE:XRC)(PINK
SHEETS:EXRCF)(FWB:EXB) reports that exploration drilling and project
development studies on its La Cabeza gold project in Argentina are on
track for Exeter to announce a decision to proceed to final
feasibility later this year. On the basis of a positive
determination, mine development activities would be expected to
commence in 2007.
Exeter Chairman Yale Simpson said, "Infrastructure and
development studies of the La Cabeza project have been completed over
the last 12 months by Exeter staff and key independent consultants.
These studies, which are summarized below, have established to our
satisfaction that all the required services can be delivered to the
project within an acceptable time-frame and at reasonable cost.
"As drilling continues, we have a workable template for project
development at La Cabeza. Importantly, we are in a position to
present preliminary, but comprehensive, mine concepts to communities
near the La Cabeza site, and to the provincial government in Mendoza.
We believe that working with the relevant authorities from an early
stage will expedite project permitting when a go-ahead decision is
reached."
Studies completed to date, as detailed below, cover a range of
essential engineering, technical and development options. Further
details about the individual studies are available on the Exeter
website www.exeterresource.com.
Geotechnical Studies
Geotechnical logging and core orientation by Exeter's Argentina
staff geologists was used by Vector Chile Limitada to carry out a
first evaluation of open pit slope stability. Using conservative
assumptions, Vector estimated an average pit slope angle of 55
degrees, still incorporating 50% safety factors. This is a relatively
steep slope which assists in keeping the quantity of waste rock to a
minimum. The logging program is continuing on drill cores and is now
being supplemented by on-site point load testing to give a
comprehensive evaluation of different rock strengths. These data will
be re-evaluated in coming months by independent consultants to
provide data of "open pit design quality".
Conceptual Mine Design
Australian Mine Design and Development, of Brisbane, Australia,
("AMDAD") used specialized software to develop conceptual open pits
based upon current costs and Vector's geotechnical slope criteria.
Preliminary open pit designs followed for the Cuello, Luna, Mandibula
and Ojo zones, based upon Hellman & Schofield's resource estimates
(see Exeter News Release dated July 27, 2005). AMDAD's report
provided waste to ore(i) ratios for each conceptual open pit and led
to a base case production schedule. The average waste to ore ratio
for the four zones was 2.5 to 1. These data were used as a basis for
a conceptual project infrastructure layout and an internal project
evaluation.
Electricity Supply
Exeter engineers worked with power authorities and suppliers of
generating equipment, based in Mendoza, Argentina, to compare two
electricity supply alternatives for the project: the Provincial
electricity grid and on-site power generation using diesel fuel. On a
cost-benefit basis, electricity supply using the Provincial grid was
shown to be superior, as it locks in a key component of the project
operating cost. The preliminary cost of a transmission line is US$
5-7 million. Studies in 2006 will evaluate the preferred power
supplier, the supply route, and the best cost-offset options for the
early production years.
Water Supply
A San Juan, Argentina water consultant, FUUNSAJ, carried out
geophysical surveys over potentially large aquifers near La Cabeza to
evaluate water supplies. FUUNSAJ also carried out pump tests on
exploration drill holes for geotechnical purposes and to evaluate the
potential contribution from the open pits. Two sites are potentially
capable of meeting the project requirement of 2000 to 3000 cubic
metres of water daily. Pump testing is scheduled to be completed by
July 2006.
Groundwater surveys by FUUNSAJ and Exeter examined water quality
for drinking water supplies. The water is slightly to moderately
saline, depending on the source. The range of groundwater salinity is
well within the efficient processing range of modern reverse osmosis
plants for drinking water.
Road Access
Exeter engineers, Mendoza-based civil construction companies, and
the Municipality of Malargue reviewed and surveyed the existing 200
kilometre-long access routes to the project area. The studies
determined the roads to be generally good. First pass costs were
obtained for road sections requiring repair or upgrading. Two
preferred routes to the project area were selected for further
evaluation during the second half of 2006. With rainfall normally
restricted to a three month period of thunderstorms in summer, road
maintenance appears to be straightforward.
Exeter engineers reviewed the transport logistics for typical
construction and operational supplies with a number of large
Argentinean transport companies. The costs on a "first pass" basis
fall within the range expected for a project of this size.
Mine Accommodation
A Mendoza-based architect was contracted to produce a sympathetic
conceptual design for the accommodation camp and offices
incorporating the use of local materials. The design was costed by
local construction companies and the cost is well within the expected
range.
Engineering Consultants
Ausenco Limited of Brisbane, Australia ("Ausenco") is an
independent minerals engineering and construction company
specializing in international projects. Ausenco coordinated mining,
metallurgical and infrastructure results into an engineering review.
Capital and operating costs to +/- 25% accuracy were developed using
detailed equipment lists and current cost factors. Ausenco made
useful recommendations for studies to be implemented by Exeter in
2006.
Study Outcomes
At the end of 2005, all the studies described above were reviewed
and incorporated into an overall development report prepared by
independent engineer, H. Sandercock & Associates of Sydney, Australia
("HSA"). HSA provided capital and operating cost estimates for a
project with production rates of 500,000 to 1,000,000 tonnes of ore
per year. The development report formed the basis of the decision by
Exeter's directors to conduct the current resource expansion drilling
program.
Current Activity
The objective of these coordinated studies is to facilitate the
transition from exploration to a final feasibility study. Both the
final feasibility study and the environmental impact assessment study
could be initiated later this year. On the basis of a positive
determination, mine development activities would begin in 2007.
The second phase of development studies is now underway, as is a
multi-rig exploration drilling program. The development studies will
include independent database verification and resource estimations by
Hellman & Schofield, Australia. An expanded geotechnical program will
also be completed to better define open pit design criteria.
About Exeter
Exeter is a technically-advanced, Canadian gold exploration
company, focused on the discovery of epithermal gold-silver
properties in Argentina and Chile. A three-rig drilling program to
discover new resources at its advanced La Cabeza gold project is a
key component of project development activities, which include
engineering, metallurgical, hydrological, and environmental studies.
Successes from the initial part of the discovery drilling program
have been announced over the past few months.
In the prospective, Patagonia region of Argentina, Exeter has a
strategic partnership with Cerro Vanguardia S.A, an AngloGold Ashanti
subsidiary. The agreement provides Exeter with an option over 12
epithermal gold-silver projects.
In southern Chile, Exeter has a strategic agreement with Rio
Tinto Mining and Exploration Limited over epithermal gold prospects
within an 800 square kilometre area. Prospecting of epithermal gold
targets is currently underway.
In the Maricunga district of northern Chile, Exeter has a
strategic agreement with Anglo American Limitada and Mantos Blancos
S.A. on epithermal gold properties.
You are invited to visit the Exeter web site at
www.exeterresource.com.
EXETER RESOURCE CORPORATION
Bryce Roxburgh, President
Cautionary Note to U.S. Investors - The United States Securities
and Exchange Commission ("SEC") permits mining companies in their
filings with the SEC to disclose only those mineral deposits that a
company can economically and legally extract or produce. We use
certain terms in this news release, such as "inferred resource", that
the SEC guidelines strictly prohibit us from including in our filing
with the SEC. U.S. investors are urged to consider closely the
disclosure contained in our Form 20-F Registration Statement, File
No. 000-51016. You can review and obtain copies of our filings from
the SEC's website at sec.gov.
Safe Harbour Statement - This news release may contain certain
"forward-looking statements" within the meaning of the United States
Private Securities Litigation Reform Act of 1995 referring to the
current and future size, development, and commercial viability of the
La Cabeza gold project. These statements reflect our current belief
and are based upon currently available information. Actual results
could differ materially from those described in this news release as
a result of numerous factors, some of which are outside of the
control of Exeter.
(i) The use of the term "ore" is in the context of the common
mining expression "waste to ore ratio" or "stripping ratio" and is
not intended to imply that the inferred resources used in this study
have any economic status as "ore" as defined in NI 43-101 and the
relevant CIM guidelines.
The TSX Venture Exchange does not accept responsibility for the ad
equacy or accuracy of this news release.
Exeter Resource Corporation (TSX VENTURE:XRC) (PINK SHEETS:EXRCF)
(FRANKFURT:EXB)
Exeter Resource Corporation
Bryce Roxburgh
President
(604) 688-9592 or Toll Free: 1-888-688-9592
OR
Exeter Resource Corporation
Rob Grey
Investor Relations
(604) 688-9592 or Toll Free: 1-888-688-9592
Fax: (604) 688-9532
exeter@exeterresource.com
www.exeterresource.com
Copyright Business Wire 2006
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