NEWS: GITENNES EXPLORATION INC. SUMMARY OF THIRD QUARTER RESULTS AND PROJECT UPDATE
VANCOUVER, Nov. 28 /CNW/ - Gitennes Exploration Inc. (ASE-GIT) wishes to update shareholders on the progress of exploration work at the Virgen Property, Peru, and to summarize third quarter results. Due to the current disruption in Canadian postal services, the Company is unable to mail these results to shareholders. However they are available by fax, on request, and will be mailed immediately upon resumption of normal service by Canada Post Corporation.
Third Quarter Summary: For the nine months ending September 30, 1997, Gitennes posted a loss of $1,188,972, compared with a loss of $275,918 for the nine months ended September 30, 1996. The Company had cash and short term deposits totalling $599,777, compared to $1,903,160 in the same reporting period in 1996. Deferred exploration and development expenditures for the reporting period total $5,861,424 versus $1,460,166 for the same period in 1996.
The increase loss is primarily the result of higher administrative expenses ($996,356 versus $218,672 for the same period in 1996). Up until September 30, 1996, the Corporation shared office space and staff with an affiliated company. Effective October 1, 1996, the Corporation moved to its own office space and hired its own employees. A corporate office was also opened in Lima. The successful drilling program on the Virgen Property in Peru has resulted in increased investor and shareholder interest. This has resulted in higher 1997 investor communication expenses. In addition, for the 1997 period there was a write off of miscellaneous development costs of $104,771 and a write down of an investment of $180,000 for which there was no similar expense in the same period in 1996.
At September 30, 1997, the Company had cash of $599,777. On October 2, 1997, the Company closed a special warrants financing for $10,000,000. The proceeds of this financing, done at $5.00 per unit, has allowed the Company to increase the pace of exploration at Virgen.
Project Update: Exploration and development work at the Virgen Property is continuing. The underground tunnel at Zona Rio Suro has been collared, and the first round was blasted last Sunday. Forty metres of advance has been completed. The tunnel is planned to cross the zone, testing both high and low grade portions of the deposit along a 150 metre transect. A 50 metre drift is also planned. The bulk sample, totalling 2,000 tonnes, will provide a metallurgical test sample, and the underground exposure will provide grade control and invaluable geotechnical information.
Two drills are active, both working on targets outside of the original discovery. One drill is on Zona Alumbre gold discovery, the other on Rio Suro Norte, testing a zone of copper - gold mineralization. The third drill was recently released from the project. Both the drilling and the underground work will continue into the middle of December, and resume early in January, 1998.
Jerry Blackwell
President
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