The concession is located approximately 100 kilometres north of Caspiche, at an elevation of 4,700 metres above sea level. The company expects to initiate a water exploration program, consisting of field mapping, geophysics, drilling and pump testing during the fourth quarter.

The aquifer in the concession is within the same high altitude region of the Andes, where other mining companies hold water rights, Exeter said.

The source of the water is seasonal snowmelt, trapped by volcanic barriers, which is considered unlikely to make its way to the coastal plains.

"Water harvesting from such a basin would not be considered to have a negative impact on present and future supplies relied upon by coastal communities," the company said in a statement.

A mine at Caspiche is estimated to require less than 100 litres per second for the initial heap leach gold phase of the mine, rising to as much as 1,000 litres per second for a full scale sulphide mining operation.

The company has retained specialist consultants to develop a water balance in the area, with the aim of showing that the use of these water rights for a mine at Caspiche will be sustainable over the project life, providing a basis for the application to proceed with the installation of necessary pumping and delivery infrastructure.

Exeter also said that applications for two additional water exploration concessions in the area are still being processed by government authorities. Following their approval, exploration programs will be extended to cover these concessions.

In February, Exeter was also granted an option over water rights of 300 litres per second from local owners. The seasonal thaw in October will allow the company to continue with this baseline water flow program that started earlier this year.

The company is continually examining the availibility of water in the region, negotiating with other parties for the purchase or rental of water rights.

The pre-feasibility study for Caspiche, including in-pit crushing and conveying of waste rock, is on schedule for completion before year-end, Exeter said. This study will assess both the oxide and sulphide resources in a combined report, as opposed to the stand-alone study based solely on the near-surface oxide portion of the deposit - which was released in June.

According to the June economic report, the oxide portion of the northern Chile deposit will produce an estimated 210,000 ounces of gold and 364,000 ounces of silver annually over a five year mine life, at a cash operating cost of $524 per ounce of gold, after the silver credit.

The study was based on the near-surface oxide portion of the Caspiche deposit, which was considered a standalone mine as the more than 100 metre thick oxide blanket would be removed from the large, underlying sulphide resources at the project.

Based on a gold price of US$1,320 per ounce, the standalone mine returned a pre-tax net present value of US$329.5 million, using a 5% discount rate, generating a 34.4% internal rate of return (IRR), and a payback period of just over three years from initial construction. Estimated initial capital costs are US$335.6 million.

At a gold price of US$1,500 per ounce, the IRR jumps to more than a whopping 46%, with a net present value of $488 million.

The Caspiche project is a gold-rich porphyry system with significant copper and silver credits. It lies in the Maricunga gold district, between the Refugio mine, owned by Kinross Gold (TSE:K), and the Cerro Casale gold deposit, owned by both Barrick Gold (TSE:ABX) and Kinross.

The study was based solely on the near-surface oxide portion of the Caspiche deposit, which was considered a standalone mine as the more than 100 metre thick oxide blanket would be removed from the large, underlying sulphide resources at the project.

Exeter plans on assessing both the oxide and sulphide resources in a combined study due out in the fourth quarter of this year.

The Caspiche project is a gold-rich porphyry system with significant copper and silver credits. It sits in-between Kinross Gold (TSE:K) (NYSE:KGC) and Barrick's (TSE:ABX) (NYSE:ABX) Cerro Casale gold deposit and the Refugio Mine, also controlled by Kinross.

According to the economic report released today, the oxide portion of the deposit will produce an estimated 210,000 ounces of gold and 364,000 ounces of silver annually over a five year mine life, at a cash operating cost of $524 per ounce of gold, after the silver credit.

Based on a gold price of US$1,320 per ounce, the standalone mine returned a pre-tax net present value of US$329.5 million, using a 5% discount rate, generating a 34.4% internal rate of return (IRR), and a payback period of just over three years from initial construction. Estimated initial capital costs are US$335.6 million, the company said.

At a gold price of US$1,500 per ounce, the IRR jumps to more than a whopping 46%, with a net present value of $488 million.

"The purpose of the Oxide PFS was to demonstrate the commercial viability of the Caspiche oxide deposit as a relatively low capital cost, low risk mine producing over 200,000 ounces gold annually," said chairman Yale Simpson.

"The oxide ore body leaches exceptionally well by industry standards and will be an important cash flow generator, whether it is developed independently to provide cash flow over a five year mine life, or in concert with the development of the main sulfide deposit."

Indeed, Simpson went on to say that the company's engineers advised that an increase in the size of the secondary crusher at the project, where primary crushed product is further reduced, could increase mine throughput at a relatively modest increase to capital costs. Currently, the heap leach processing rate is estimated at 62,000 tonnes of ore per day, with an average gold recovery of 78%.

"On the basis of the economics set out in the PFS report, the company can now consider mine permitting and development of the oxide project well in advance of the larger scale and more capital intensive sulfide project," Simpson added.

The NI 43-101 compliant study assumed total proven and probable reserves of 1.35 million ounces of gold, at an average grade of 0.41 g/t, and 5.36 million ounces of silver, at a grade of 1.64 g/t, contained within 101.74 million tonnes of ore.

However, the report did not include inferred resources of 50,000 ounces of gold, and 300,000 ounces of silver, contained within 6.21 million tonnes of ore, Exeter said.

The company, which has cash reserves of $80 million, also said that there are several opportunities to boost the current economics of the project, including the supply of power from the grid, which was not included in the latest report.

Highlights from the infill drilling program include hole CSD074, which intersected 908 metres at 0.60 g.t gold and 0.22% copper; hole CSD075, which returned 572 metres at 0.78 g/t gold and 0.31% copper; hole CSD076, which intersected 1,146 metres at 0.38 g/t gold and 0.31% copper, including 378 metres at 0.55 g/t gold and 0.45% copper.

Meanwhile, hole CSD078 returned 376 metres at 1.25 g/t gold and 0.40% copper from a down hole depth of 250 metres.

“The results from this 6,600m drilling program demonstrate the continuous nature of the Caspiche mineralization and support the integrity of our geological model," said project manager Justin Tolman.

"AMEC International has now been retained to begin work on an updated resource estimate.

"The inclusion of the results from this additional drilling in the upcoming resource estimate update should allow us to consider economic extraction of higher grade portions of the deposit currently classified as inferred within our pre-feasibility study (PFS) currently in progress.”

Currently, the company is using two drill rigs to explore for additional porphyry mineralization in the immediate vicinity of the Caspiche resource. A pre-feasibility study to consider a stand-alone oxide gold deposit is expected in the second quarter.

Exeter recently exercised its option to purchase the Caspiche project from Anglo American. Caspiche is located in the Maricunga gold district, between Kinross Gold's Refugio mine and Barrick and Kinross' Cerro Casale gold deposit.

The results, which confirmed that two different processing technologies can be successfully applied to reduce arsenic from sulfide concentrates, will be used to develop capital costs for the oxide-sulfide pre-feasibility study, scheduled for release in the third quarter.

The study will be based on a model where gold and silver will be recovered from the surface oxide deposit by a heap leaching process, whereas gold, silver and copper will be recovered from the underlying sulfide deposit using industry standard flotation technology.

Today, the company reported that both reduction roasting and pressure oxidation technologies can be used to reduce or eliminate arsenic from the sulfide concentrates produced by flotation.

According to the testwork results, the roasting method showed arsenic levels were reduced to 0.2% arsenic - a level considered commercially acceptable in most smelter contracts, the company said.

Using pressure oxidation, testwork extracted 99% of the copper, leaving the arsenic as the residue mineral scorodite. Leaching of the residue also yielded gold dissolutions that averaged 96%.

"These results strongly suggest that high quality cathode copper and gold-silver bullion can be produced from a plant that uses pressure oxidation to treat concentrates, and the recoveries will be very high," the company said in a statement.

For the tests, the pilot plant recovered 75 kilograms of concentrate from approximately 10 metric tons of diamond drill core representative of Caspiche sulfide mineralization. The resulting concentrates assayed on average 23.5% copper, 35 g/t gold, 75 g/t silver and 2.4% arsenic.

The Caspiche project is situated in the Maricunga gold district, between Kinross' Refugio mine and the giant Cerro Casale gold deposit, owned by both Barrick and Kinross.

The Caspiche project, situated in the Maricunga gold district, includes 100 million metric tons of gold-only shallow oxide ore that overlies the main Caspiche gold-copper resource. The oxide deposit contains 1.4 million ounces of gold, with virtually no contained copper.

The stand-alone study of the oxide deposit is based on a model of a heap leach operation processing 35,000 metric tons of ore per day, at a waste to ore ratio of 0.3:1, to recover roughly 1.0 million ounces of gold and 1.5 million ounces of silver over eight years. Projected gold production will be some 150,000 ounces per year in the early years, decreasing to 120,000 ounces per year in the later years.

According to Exeter, testwork so far has confirmed that the ore type from the deposit is responsive to conventional heap leaching, with heap leach gold recoveries of 70% to 75% based on a 50 mm crush size. Silver recoveries averaged 25%, the company said.

"Our heap leaching simulations are providing very good recoveries for the oxide deposit that forms a gold-only blanket of mineralization overlying the main Caspiche gold-copper resource," said chairman Yale Simpson.

"As the oxide deposit must be removed to access the lower sulphide ores, we are encouraged that the potential exists for an economically viable stand-alone project, independent of the much larger oxide-sulphide project."

Exeter also said that a 40 metric ton pilot plant sample recently collected from various mineralized sites within the oxide deposit indicated 70% of the mined material may not need crushing, as the material breaks naturally to -50mm.

Should the outcome of the oxide pre-feasibility be positive, the company plans to immediately move into detailed feasibility studies and mine permitting, which could lead to a far shorter timeline to production than the full oxide-sulphide project.

The full project pre-feasibility study is due to be released in the third quarter.

"Global exploration has repeatedly demonstrated that one of the best places to find a new porphyry system is near an existing one. This has been evidenced by recent discoveries close to a number of known porphyry deposits elsewhere in Chile," said Caspiche project manager, Justin Tolman.

The Sideral property, which covers 2,941 acres, has been the subject of previous exploration work that identified anomalies on site. Exeter said that additional geophysical work and sampling has already begun to expand and further define these anomalies. Preliminary drill testing is expected to begin within days, with a minimum of 3,000 metres of discovery drilling anticipated for the project before the season closes in May.

Under the terms of the option agreement, Exeter can acquire 100% of Sideral by meeting annual drilling requirements, for a total of 15,000 metres within four years. After this is complete, Xstrata has a one-time back-in right to acquire a 60% stake in the property for three times Exeter's expenditures.

Exeter's Caspiche project is located between Kinross Gold's (TSE:K)(NYSE:KGC) Refugio mine and Barrick (TSE:ABX) (NYSE:ABX) and Kinross' Cerro Casale gold deposit.

"Global exploration has repeatedly demonstrated that one of the best places to find a new porphyry system is near an existing one. This has been evidenced by recent discoveries close to a number of known porphyry deposits elsewhere in Chile," said Caspiche project manager, Justin Tolman.

The Sideral property, which covers 2,941 acres, has been the subject of previous exploration work that identified anomalies on site. Exeter said that additional geophysical work and sampling has already begun to expand and further define these anomalies. Preliminary drill testing is expected to begin within days, with a minimum of 3,000 metres of discovery drilling anticipated for the project before the season closes in May.

Under the terms of the option agreement, Exeter can acquire 100% of Sideral by meeting annual drilling requirements, for a total of 15,000 metres within four years. After this is complete, Xstrata has a one-time back-in right to acquire a 60% stake in the property for three times Exeter's expenditures.

Exeter's Caspiche project is located between Kinross Gold's (TSE:K)(NYSE:KGC) Refugio mine and Barrick (TSE:ABX) (NYSE:ABX) and Kinross' Cerro Casale gold deposit.

Exeter Resource Corp has chalked up a tremendous amount of shareholder wealth at Caspiche, which is the company’s sole focus.  Anglo American will still retain a 3% net smelter royalty (NSR) on production at the project, and Exeter confirmed that it had made its first annual advance royalty payment of $250,000.

Exeter’s Chairman, Yale Simpson said: “We are fortunate that the geometry of the project includes a +100 metre thick gold only oxide “blanket” at surface, which immediately overlies the huge sulphide gold copper deposit. The gold only oxide provides us with excellent potential for an early start-up, modest cost operation that may produce in excess of 150,000 ounces of gold per annum”

Exeter recently announced that it had secured an option over a 300 litre per second water source which should provide adequate water for the potential development of the oxide only part of the Caspiche project.

The company is armed with cash too, with some $87 million in the coffers.  The cash pile is currently being directed at two pre-feasibility studies underway at Caspiche. One considering a oxide gold operations targeting the upper part of the deposit and a second considering a significantly larger development of both the oxide and deeper sulphide ore. 

The two studies are due to be competed in the second and third quarters of 2011, respectively.

Under the terms of the deal, the company has optioned water rights to a total volume of 300 litres per second, payable in stages.

Exeter said it has also applied for water exploration concessions over three separate water basins. Both the optioned water rights and the nearest basin are located some 100 km north of the Caspiche project.

According to the company, Aker Solutions has already begun work on two concurrent pre-feasibility studies for the project, the first of which is designed to provide economics for the development of a shallow, heap leachable gold-only oxide deposit. The second will focus on the development of a complete Caspiche resource.

At this stage, preliminary studies indicate that a gold-only heap leach project would require a water supply of less than 100 litres per second.

"Water is a fundamental component for any potential mining operation at Caspiche. The optioned water rights are more than sufficient to meet the needs of a gold-only oxide project at Caspiche," said executive chairman, Yale Simpson.

"Based on the measured and indicated resource for the oxide deposit, the gold-only oxide project could produce +150,000 ounces of gold per year for five years, providing early cash flow for the project."

The Caspiche project is situated in the Maricunga gold district in Chile, between Kinross Gold's (TSE:K) Refugio mine and Barrick Gold (TSE:ABX) and Kinross' Cerro Casale gold deposit.

Exeter rallied more than 4% on Tuesday to trade at $5.65 as of 12:40pm EST.

In November, the company announced it appointed Aker Solutions to carry out two separate studies for the property, the first of which would consider a stand-alone heap leach "oxide gold" project to mine the upper part of the deposit, scheduled to be released in the second quarter of next year.

The second study, to run concurrently with the first, would consider mining both the oxide and sulphide deposits, and would be released in the third quarter of 2011.

“Exeter has commissioned a broadly based series of sub-studies to provide Aker with a realistic information platform for the pre-feasibility studies," said vice president of development and operations, Jerry Perkins, in a statement today.

Thus far, Exeter said that with regards to heap leach test work,  McClelland Laboratories has completed a 29 column leaching program on selected materials sourced from the diamond drill cores. A metallurgical test program on drill core samples from the MacNeill zone started this week, it added.

In addition, in early December, a sulphide zone flotation pilot plant program began at SGS Lakefield Laboratories in Canada, where approximately 10 metric tons of sulphide material, broadly representative of the Caspiche Indicated Resource, was treated to provide design information for the pre-feasibility studies.

The company is also progressing with mining, infrastructure and water studies, with NCL Ingenieria having completed detailed pit designs for the oxide heap leach gold report.

Exeter said it as well applied for water exploration rights, as geophysical surveys over one of the company's regional exploration properties located outside of the Copiapo Basin indicated some potential for development of a high altitude water resource, which has the potential to reduce pumping costs.

With regards to exploration drilling, Exeter is currently in-fill drilling to upgrade some of the site's resources to the indicated category for inclusion in the pre-feasibility study.

The Caspiche project is situated between Kinross' Refugio mine and Barrick and Kinross' giant Cerro Casale gold deposit.

Exeter was up 1.5% on Wednesday, trading at $6.18 as of 11:35am EST.

In November, the company announced it appointed Aker Solutions to carry out two separate studies for the property, the first of which would consider a stand-alone heap leach "oxide gold" project to mine the upper part of the deposit, scheduled to be released in the second quarter of next year.

The second study, to run concurrently with the first, would consider mining both the oxide and sulphide deposits, and would be released in the third quarter of 2011.

“Exeter has commissioned a broadly based series of sub-studies to provide Aker with a realistic information platform for the pre-feasibility studies," said vice president of development and operations, Jerry Perkins, in a statement today.

Thus far, Exeter said that with regards to heap leach test work,  McClelland Laboratories has completed a 29 column leaching program on selected materials sourced from the diamond drill cores. A metallurgical test program on drill core samples from the MacNeill zone started this week, it added.

In addition, in early December, a sulphide zone flotation pilot plant program began at SGS Lakefield Laboratories in Canada, where approximately 10 metric tons of sulphide material, broadly representative of the Caspiche Indicated Resource, was treated to provide design information for the pre-feasibility studies.

The company is also progressing with mining, infrastructure and water studies, with NCL Ingenieria having completed detailed pit designs for the oxide heap leach gold report.

Exeter said it as well applied for water exploration rights, as geophysical surveys over one of the company's regional exploration properties located outside of the Copiapo Basin indicated some potential for development of a high altitude water resource, which has the potential to reduce pumping costs.

With regards to exploration drilling, Exeter is currently in-fill drilling to upgrade some of the site's resources to the indicated category for inclusion in the pre-feasibility study.

The Caspiche project is situated between Kinross' Refugio mine and Barrick and Kinross' giant Cerro Casale gold deposit.

Exeter was up 1.5% on Wednesday, trading at $6.18 as of 11:35am EST.

The company has hired Aker Solutions, an engineering group based in Santiago, for the task of completing two pre-feasibility studies.

The first study, which will consider a stand-alone "oxide gold" project to mine the upper part of the deposit, is scheduled to be available in the early part of the second quarter of 2011. The second study, to run concurrently with the oxide study, will consider mining both the oxide and sulphide deposits and is scheduled for the third quarter of next year.

"The commencement of the PFS process is clearly a milestone for Exeter as we transition from the high risk "discovery stage" of exploration into project development," said executive chairman, Yale Simpson.

"Interestingly, we see two mining scenarios for Caspiche, a smaller oxide gold mine that we could potentially develop quickly to generate cash flow, or a much larger, and longer term "total project" to realise the ultimate value of the deposit."

Exeter said the advantage of an oxide gold mine is the expected modest capital requirement for such a project, and the compatibility of a project at this scale to fit within existing local infrastructure.

The decision to proceed with the prefeasibility studies follows Exeter's resource update from September, which reported that 80% of the total Caspiche resource fell within the measured and indicated resource categories. Specifically, the updated measured and indicated resources were 21.3 million ounces of gold, 48.4 million ounces of silver and 5.3 billion pounds of copper.

In addition, Exeter reported an Inferred mineral resource of 5.1 million ounces of gold, 14.5 million ounces of silver and 1.4 billion pounds of copper.

Drilling at the project recently resumed in late October, with two drill rigs on site as part of a planned 10,000 metre program, designed to convert the higher grade mineralization within the current inferred resource to the measured and indicated categories.

The drilling will also be used to support the proposed mining options in the studies, as well as to test regional targets within Exeter property to add Caspiche style gold-copper porphyries.

The Caspiche project is situated in the Maricunga gold district, between the Refugio mine and the giant Cerro Casale gold deposit of Barrick and Kinross. Exeter has $90 million in cash.

The underwriters, led by Canaccord Genuity, have exercised the over-allotment option and acquired an additional 1.2 million common shares of the company for gross proceeds of C$7.5 million, bringing the total amount of proceeds from the financing to C$57.5 million.

The company said it will use the new funds to advance its Caspiche project in Chile, which sits in-between Kinross Gold (TSX:K, NYSE:KGC) and Barrick Gold's (TSX:ABX, NYSE:ABX) Cerro Casale gold deposit and Refugio Mine, also controlled by Kinross.

Specifically, the proceeds will finance a project prefeasibility study, certain infrastructure contracts, drilling to facilitate advanced mine optimization studies, additional metallurgical testwork and process design studies, as well as follow-up drilling on exploration targets in the area.

Caspiche is a gold-rich porphyry system with significant copper credits. In September, the measured and indicated resource at Caspiche was 1.316 billion tons averaging 0.5 grams per ton gold and 1.14 grams per ton silver, with 1.217 billion tonnes of the resource also containing an average copper grade of 0.20%.

Under the terms of the bought deal financing, Exeter will sell 8.065 million common shares at a price of C$6.20 per share, for gross proceeds of C$50.003 million.

In addition, the company will grant the underwriter an over-allotment option, which can be used prior to the closing of the offering, to purchase up to an additional approximate 1.209 million common shares at C$6.20 per share to raise additional gross proceeds of up to around C$7.5 million.

Exeter intends to use the new funds to advance the company's Caspiche project, specifically to finance a project prefeasibility study, certain infrastructure contracts, drilling to facilitate advanced mine optimization studies, additional metallurgical testwork and process design studies, as well as follow-up drilling on exploration targets in the area.

The placement is expected to close around October 27, 2010 and is subject to certain closing conditions.

Drill hole CSD025 intersected 148 metres of gold only mineralization at a grade of 0.64 g/t from surface, followed by 220 metres grading 1.03 g/t gold and 0.34% copper and another 199 metres at 0.50 g/t gold and 0.19% copper. Drill hole CSD069 intersected 540m at 0.84 g/t gold and 0.32% copper including 294 metres at 1.21 g/t gold and 0.41% copper. Drill hole CSD067 intersected 50m (164 ft) at a grade of 0.47 g/t gold in the oxide zone, followed by 676 metres of sulphide zone mineralization at a grade of 0.55 g/t gold and 0.11% copper, including a zone of 242 metres grading 0.80 g/t gold and 0.14% copper.

Exeter said that holes CSD025 and CSD069 confirmed the position and expected width of the central high grade core to the deposit. Additionally, hole CSD067 produced the highest grades to date from the recently discovered MacNeill zone, while CSD065 tested its northwestern extent and confirmed that mineralisation remained open for extension in that area.

CSD066 and CSD068 tested the south eastern limits of the porphyry system and CSD051 tested the northern portion of the system, confirming the modeled grades in both areas. CSD064 was a successful infill hole into the southern portion of the deposit.

The objectives of the drilling campaign were twofold: firstly to lift inferred category mineralization into the indicated category, and secondly to expand the total gold-copper resource...although drilling has been suspended for the southern winter, results from the last four drill holes are pending,” said Caspiche project manager Justin Tolman.
An updated resource estimate for Caspiche is scheduled for September 2010.

The company is currently formulating a minimum 10,000m drilling program to commence in October, which it said would further increase the component of indicated resources and better define the eastern copper enhanced limit to the deposit.

Samples are now being selected and prepared for pilot plant testwork. That program is scheduled to commence in Q4 and will continue through Q1 2011.

Fortunately for shareholders in Exeter, despite the wider turmoil in global equity markets, the price of gold continues to perform well, and is one of the few asset classes rising this morning in North America.  The stronger gold price, combined with Exeter’s update helped the company’s share price recover from an initial dip and is currently up 0.4%.

Drill results this morning emanated from the high grade zone at the Caspiche project where the company is focused on both upgrading the current resource from inferred to indicated and adding to the total gold-copper resource.

Highlights included drill hole CSD062 which cut 624 meters grading 0.85 grams per tonne gold and 0.28% copper from a depth of 424 meters. This included a higher grade 400 meter intercept grading 1 grams per tonne gold and 0.33% copper from 544 meters.  Meanwhile, in drill hole CSD063, Exeter reported an impressive 868 meters grading 0.6 grams per tonne gold and 0.33% copper from 404 meters, including 400 meters @ 0.69 grams per tonne gold and 0.38% copper from 594 meters.  The two holes were drilled east of the previous boundary of the known resource.

"CSD062 and CSD063 reflect excellent results at a higher grade than was indicated by our current block model of the deposit. As such they are likely to extend the higher grade central core of the system to the east,” Justin Tolman, Caspiche Project Manager stated. “Furthermore, as noted in our last release, copper grades continue to increase markedly to the east relative to other parts of the deposit. Clearly further drilling to the east of CSD062 is required to define the limits of the deposit.”

For the moment Exeter has suspended drilling until the end of the winter season in Chile. In the meantime, the company has further assay results pending, and has now completed more than 20,000 meters of drilling since the last resource estimate. 

The company has already defined a NI43-101 compliant indicated resource of 785 million metric tons grading 0.57 grams per tonne gold, 1.33 grams per tonne silver, including 690 million metric tons grading 0.23% copper, plus an additional 688 million metric tons in the inferred category.

Exeter and Extorre Gold Mines (TSX: XG) last month closed the previously announced spin-out transaction, under which Exeter continues to hold and focus on advancing the Caspiche project while Extorre holds all of Exeter's former interest in the Argentine Cerro Moro and Don Sixto projects, as well as its Argentine Patagonian exploration projects and an initial C$25m from Exeter.

Extorre is now trading as an independent company on the Toronto Stock Exchange.

Each Exeter shareholder received one share in Extorre for each share held in Exeter, there was no change in the holdings in Exeter Resource Corp and, after the ‘ex-distribution’ period on 24 March, its listings on the American Stock Exchange (AMEX), Toronto Stock Exchange (TSX) and Frankfurt (FSE) will remain unaffected.

By Lawrence Williams, Mineweb.com

High flying gold exploration junior, Exeter Resource Corp, has had the strategic split of the company into two separate entities approved by its shareholders.  Exeter itself will now concentrate on the huge Caspiche gold/silver/copper project in the Maricunga region of the Chilean Andes, virtually halfway between Kinross' Maricunga mine (formerly known as Refugio) and Barrick's Cerro Casale project, while the spin-off company, to be called Extorre, will take on the group's Cerro Moro gold project, and other Argentinian gold exploration properties, with a view to bringing the former to production.

Mineweb  first revealed the company's president, Bryce Roxburgh's, ideas to split in two last November  - see Exeter's golden choices, and now this has come about with shareholder approval received with 99.83% in favour, with the final order agreeing the split granted by the Supreme Court of British Columbia on March 12th.  The agreement should now be closed by March 22^nd, with the distribution date for Extorre shares to Exeter's shareholders the day following.  The shares have received preliminary approval for listing on the TSX, and while they are not yet to be listed on the NYSE-AMEX register, the new company plans to apply for listing on the OTCQX exchange for its U.S. shareholders and subsequently on the NYSE-AMEX. Listing is subject to Extorre meeting all listing requirements of those exchanges and receiving exchange acceptances of listing applications.

Exeter shares themselves will trade "ex-distribution" on the TSX on March 18, 2010 and on the NYSE-AMEX on March 24, 2010.

On closing, the new company, Extorre, will hold all of Exeter's former interest in the Argentinian Cerro Moro and Don Sixto Projects as well as its other Argentinian Patagonian exploration projects and an initial $25 million in capital from Exeter. Initial focus will be on development of the Cerro Moro Project, while exploration drilling will continue to test for new high grade vein targets. Exeter itself will continue to hold and focus on advancing its Caspiche Project.

Part of the reason for the split relates to the huge differences in project parameters between Caspiche and Cerro Moro and will enable two separate management teams to concentrate on two very different projects.  Caspiche looks to be rivalling Barrick's Cerro Casale in size and grade, and so far has an inferred mineral resource estimate of 1,117 million tonnes at a grade of 0.55 grams per tonne gold and 1.12 grams per tonne silver including 1,017 tonnes at a grade of 0.22% copper. This equates to in-situ inferred resources of 19.6 million ounces of gold, 40 million ounces of silver and 4.84 billion pounds of copper (a total of 32.4 million gold equivalent ounces). The size of this deposit suggests a multi-billion dollar development to bring a large open pit to production and is therefore markedly different to the skills and financing necessary for the smaller Cerro Moro project.

The Cerro Moro project, as it is much smaller in scope and less costly to bring into production could be mined with a series of relatively small narrow open pits and by underground methods, being similar to AngloGold's Cerro Vanguardia which is relatively nearby in Argentina's Patagonia area.  A mine here can be brought on stream relatively quickly by new company, Extorre, without necessarily having to bring in a jv partner.  The current resource at Cerro Moro stands at 646,000 ounces gold equivalent at a grade of 18 grammes per tonne gold equivalent. This is almost entirely on the high grade Escondida vein, and with a number of other significant vein structures already delineated, the eventual resource will be very much larger.  A new resource statement, which will still be primarily based on the Escondida vein drilling, is due next month. 

The company split will enable two separate management teams to concentrate wholly on two very different types of projects, and is a move which Exeter management feels will strongly enhance shareholder value.

Exeter for its part, has been diligently advancing Cerro Moro, and announced just a few weeks ago that it intends to spin the project  - and $25 million in cash – into a separate company.   Today’s drill results, which were aplenty, continued to highlight the potential of the project; the most impressive result emanated from drill hole MD644 which returned 5.38 meters at an average grade of 149.9 grams per tonne gold equivalent. Exeter calculates gold equivalent grades by dividing the silver assay result by 60, adding it to the gold value and assuming 100% metallurgical recovery.  Exeter released assay results from 28 holes in total today which were all drilled in the ‘Far West’ sector of the Escondida Vein. 12 of the 28 holes reported high grade gold.

 “Within two weeks the Company will have completed the infill drilling considered sufficient to bring a substantial component of the Escondida mineralization into the Indicated Resource category,” Exeter’s Exploration Manager Matt Williams stated. “When the in-fill drilling is finished we will focus exploration on new targets, particularly those situated close to known ore grade mineralisation. Initially we will test the transition area between the Far West zone and the Fomicruz joint venture lands to the west. We will retain 3 drill rigs to test such new targets.”

“Exeter’s inclusion in the prestigious S&P / TSX indices is another milestone for the Company”, Executive Chairman Yale Simpson said, “We did not anticipate being included before mid next year, so this is a particularly pleasant surprise for shareholders.”

Exeter in late November successfully closed a C$50 million equity financing; the mineral explorer sold 8.55 million shares at C$5.85 to a syndicate of underwriters.  The syndicate raised a further C$7.5 million for the company through the full exercise of over-allotment option. The proceeds are being used to progress the work on the company’s primary properties.

On the Caspiche project in Chile, Exeter recently announced an inferred mineral resource estimate of 1,117 million tonnes at a grade of 0.55 grams per metric ton gold and 1.12 grams per metric ton silver, including 1,017 million tonnes at a grade of 0.22 percent copper. This equates to in-situ inferred resources of 19.6 million ounces of gold, 40 million ounces of silver and 4.84 billion pounds of copper.

At the Cerro Moro project in Argentina, Exeter recently announced an initial inferred mineral resource estimate of 646,000 ounces gold equivalent at a grade of 18 g/t gold equivalent.

The Company has drilled over 200 infill holes on the Escondida vein structure, principally to upgrade the sectors of the inferred resource that might be scheduled for early mining. Drilling to expand the deposit has recently been initiated and will continue through 2009. Engineering, environmental and infrastructure studies are being advanced ahead of a scoping study in 2010.

"Exploration and development budgets to the end of 2010 are presently being formulated. Importantly, we continue to build our development team as we progress towards mine development decisions," he added.

On the Caspiche project in Chile, Exeter recently announced an inferred mineral resource estimate of 1,117 million tonnes at a grade of 0.55 grams per metric ton gold and 1.12 grams per metric ton silver, including 1,017 million tonnes at a grade of 0.22 percent copper. This equates to in-situ inferred resources of 19.6 million ounces of gold, 40 million ounces of silver and 4.84 billion pounds of copper.

On the Cerro Moro project in Argentina, Exeter recently announced an initial inferred mineral resource estimate of 646,000 ounces gold equivalent at a grade of 18 g/t gold equivalent. The Company has drilled over 200 infill holes on the Escondida vein structure, principally to upgrade the sectors of the inferred resource that might be scheduled for early mining. Drilling to expand the deposit has recently been initiated and will continue through 2009. Engineering, environmental and infrastructure studies are being advanced ahead of a scoping study in 2010.

Exeter in late November successfully closed the C$50 million equity financing announced easrlier in the month under which Exeter Resource sold 8.55 million shares at C$5.85 to a syndicate of underwriters pursuant to a short form prospectus in Canada and a concurrent private placement to US institutional investors.  The underwriting syndicate raised a further C$7.5 million for the company through the full exercise of the over-allotment option.