Exeter Resource Corp initiates pre-feasibility studies at Caspiche gold-copper project in Chile

Canada-based Exeter Resource Corp (NYSE-AMEX:XRA, TSX:XRC, FSX:EXB ) said Monday it has initiated pre-feasibility studies for its Caspiche gold-copper project in Chile.

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.