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More bonanza gold grades for Exeter Resource Corp at Cerro Morro

Published: 00:09 02 Sep 2009 BST

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(Lawrence Williams, Mineweb.com) Junior gold explorer, Exeter Resource (AMEX:XRA, TSX-V:XRC, Frankfurt: EXB), which has two major gold prospects in play, one with silver as a co-product and the other with copper, has just announced some more bonanza gold grades on the smaller of the two - Cerro Morro - in Argentina, where it is outlining a gold/silver vein system which it describes as similar in structure to AngloGold Ashanti's Cerro Vanguardia mine which is located some 130 km to the west. 

Exeter is concentrating on the high grade Escondida vein at Cerro Morro and some of the latest gold grades from a series of 50 diamond drill holes on the Escondida West, Central and East sectors, with the results of an additional 45 drill holes from these sectors awaited, are more than encouraging.  33 of the drill holes returned what Exeter describes as ‘significant' results, with 9 holes returning the bonanza (multi-ounce) gold and silver grades that are said to characterise the vein. Of the remaining 17 diamond drill holes completed, 10 holes returned narrow and/or low grade intersections and seven holes were poorly mineralised.

One of the problems with vein deposits of this type, where the high grades may occur across narrow widths, and be sporadic in tenor, is to devise a mining plan which can take this into account, while minimising dilution.  However there seems little doubt now that Exeter has uncovered something that has to be worth mining sooner or later.

In its latest release Exeter highlights the bonanza grade holes and some of the figures are quite impressive with great gold and silver grades across reasonable widths and at shallow depths.  For a full tabulation of the significant holes go to Exeter's website  to view a table showing the 33 drill holes

Exeter has also completed a further 26 diamond drill holes on the high grade Escondida Far West sector. Following sample preparation and assaying, results from these holes together with the additional 45 holes from the East, Central and West sectors drilled to date, will be released, followed perhaps later in the year by a revised resource estimate while a scoping study is planned for early next year.  The current preliminary inferred mineral resource estimate is of 1,098,000 tonnes containing 371,000 ounces gold at a grade of 10.5 g/t and 19.2 million ounces silver at a grade of 545 g/t for 646,000 ounces gold equivalent at a grade of 18 g/t gold equivalent (using a silver:gold ratio of 70).

Cerro Morro is the smaller of the two projects on which Exeter is concentrating its efforts.  The other is the massive Caspiche project at altitude in the Maricunga area of neighbouring Chile where the inferred resource is currently put at 8.73 million ounces of gold and 2.09 billion pounds of copper, with a revised resource estimate due this month based on additional drilling results.  The deposit looks to be similar in size and scale to Kinross' Refugio and Barrick's Cerro Casale projects, between which it is located.  This is a project which would require very substantial investment indeed to bring to production and would almost certainly require the involvement of a mining major to get it off the ground.

Thus Exeter, for the moment, is primarily concentrating its development plans on Cerro Morro where it would have a realistic chance of developing a mine itself - although one suspects the preferred route, as with most exploration companies, would be for the involvement/take-over of the project by a company with far bigger available resources and easier access to finance.  Development would likely be at relatively low capital cost involving mining a series of small open pits as at Cerro Vanguardia, although considerable expansion of the resource would be needed to match Cerro Vanguardia's scale of operation.

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