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Strategies & Market Trends : Ride the Tiger with CD -- Ignore unavailable to you. Want to Upgrade?

To: dara who wrote (174653)	9/14/2009 8:32:28 PM
From: LoneClone	Respond to of 314084

I haven't looked at Exeter in a while, but those are impressive numbers they came out with today. I may have to re-evaluate some of my current holdings and liquidate something to move some money that way. LC

To: dara who wrote (174653)	9/15/2009 11:11:53 AM
From: Veteran98	Read Replies (1) \| Respond to of 314084

Exeter Resource Corp. (XRC-V, XRA-A) C$4.60 Updated Resource at Caspiche Event Exeter released an updated resource estimate for its Caspiche gold/copper project in the Maricunga mining district of northern Chile. The resource contained a total of 19.6 million gold ounces with the sulphide portion grading 0.55 g/t Au and 0.22% Cu. Impact – POSITIVE The updated resource estimate represents a significant improvement in the size of the deposit with comparable grades to the initial estimate released this past March, which reported an initial gold inventory of 8.7 million ounces grading 0.60 g/t Au. Currently, our corporate valuation includes credits for both Caspiche and the company’s high-grade Cerro Moro project in Argentina. We value Caspiche on a per-ounce basis, applying $25/oz to the initial estimated gold inventory. While the revised estimate implies substantial upside to our current valuation, we make no changes to our model at this time as we await the release of an accompanying technical report prepared by AMEC International (Chile) S.A, which should be made available shortly. With our estimates unchanged, we maintain our 12-month target price of $8.50 per share and reiterate our Speculative BUY recommendation. Details • Caspiche – Major Undeveloped Global Gold Deposit: The updated estimate outlines inferred resources of 19.6 million ounces of gold, 137 million ounces of silver and 4.84 billion pounds of copper, for a total of 33.7 million gold-equivalent ounces. In Exhibit 1, we provide a breakdown of the revised estimate and a comparison to the initial estimate released this past March. • Drilling Set to Resume in October: A new drilling program at Caspiche is scheduled to resume in early October and is expected to follow through to May 2010. The program will focus on upgrading the highersoutheast and to depth. • Work Advancing towards Project Development Study: In addition to drilling, Exeter intends to advance metallurgy, engineering, water and environmental studies towards the objective of completing a conceptual development study on the deposit. No timeline was given by the company with respect to the release of the study. Outlook We anticipate the following developments: • Ongoing – Drill results from Escondida Zone and potential extension • October – Resumption of drilling at Caspiche • Q1/10 – Revised resource estimate for Cerro Moro Valuation We calculate that Exeter is currently trading at 0.55x our corporate NAV5%. The small capitalization companies in our gold coverage universe trade at an average of 1.24x NAV5%.We employ our base 1.0x multiple to our corporate valuation which includes credits for both Cerro Moro and Caspiche – the former, derived from our estimate of NAV5% on the basis of a modelled resource base of 1 million ounces gold-equivalent, and the latter, from the application of C$25/oz to a gold inventory of 8.7 million ounces. With respect to Caspiche, we note that comparable assets in the Maricunga district of northern Chile have sold for approximately US$40-50/oz. For example, Kinross Gold recently purchased Lobo Marte from Teck for US$42/oz (Q4/08) and Barrick acquired its 51% stake in Cerro Casale for the equivalent of US$46/oz (Q4/07).We employ our base 1.0x multiple to our corporate valuation which includes credits for both Cerro Moro and Caspiche – the former, derived from our estimate of NAV5% on the basis of a modelled resource base of 1 million ounces gold-equivalent, and the latter, from the application of C$25/oz to a gold inventory of 8.7 million ounces. Key Risks to Target Price The main risks facing the company include forecast, financial, technical and political risks. Among other things, these include risks related to gold and fuel prices, the governing fiscal and legislative regimes, the timing of key developments, market conditions, capital and operating costs, foreign exchange rates, resources, operating parameters, permitting, environmental, indigenous peoples, and staffing and key personnel retention. Investment Conclusion While the revised estimate for Caspiche implies substantial upside to our current valuation, we make no changes to our model at this time pending the release of an accompanying technical report prepared by AMEC International (Chile) S.A, which should be made available shortly. With our estimates unchanged, we maintain our 12-month target price of $8.50 per share and reiterate our Speculative BUY recommendation.