RESTRUCTURING TO UNLOCK THE VALUE OF THE HIGH GRADE CERRO MORO GOLD-SILVER PROJECT IN ARGENTINA
VANCOUVER, Feb. 11 /CNW/ - Exeter Resource Corporation (NYSE-Amex: XRA, TSX:XRC and Frankfurt: EXB - "Exeter" or the "Company") has obtained an interim order from the British Columbia Supreme Court providing for a special meeting of shareholders (the "Meeting") required to approve the spin-out of its Argentine assets into a new company to be known as Extorre Gold Mines Limited ("Extorre").
Exeter shareholders of record on January 27, 2010 will be asked to vote on the proposal at the Meeting, which is expected to be convened on March 11, 2010. If approved, the transaction will result in each Exeter shareholder on the effective date of the transaction (expected to be on or about March 17, 2010), receiving one share in Extorre for each share held in Exeter on that date. There will be no change in shareholders' holdings in Exeter.
As announced, under the terms of the transaction Exeter will retain all assets relating to the Caspiche gold-copper discovery, together with approximately $50 million in working capital, and focus on the advancement of Caspiche. Exeter will transfer to Extorre the Cerro Moro and other Argentine exploration properties and approximately $25 million in working capital. Extorre will become an emerging gold-silver producer focused on the high grade Cerro Moro gold-silver project in Argentina.
Extorre will focus on taking Cerro Moro through a Preliminary Assessment Study in Q3-2010. That report that will provide a detailed description of a potential mine at Cerro Moro, including forecast production rates, capital costs, operating costs and cash flows. Extorre also intends to increase the Cerro Moro resource by drilling the many partially explored veins on the property.
Dr. Eric Roth will be CEO and President of Extorre. Eric has worked as a mine geologist on gold mines in Australia and Chile, and as an exploration geologist globally for BHP, the Rio Tinto Group companies and AUR Resources. More recently, Eric was Global Exploration Manager for AngloGold Ashanti. Darcy Daubaras will be CFO and Yale Simpson and Bryce Roxburgh will act as joint non-executive Chairman of the Board.
The board of directors will consist of Yale Simpson, Bryce Roxburgh, Louis Montpellier, Cecil Bond, Robert Reynolds and Ignacio Celorrio. Mr. Celorrio is an Argentine lawyer and partner at Quevedo Abogado, whose practice includes mining law. He is also the president of Malbex San Juan S.A., Minera Cielo Azul S.A., and Inversiones Mineras Australes S.A
The transaction is subject to shareholder and regulatory approvals, including approval of the Toronto Stock Exchange, the NYSE Amex and the Supreme Court of British Columbia.
An information circular setting out further details of the transaction and the Meeting will be mailed February 17th 2010.
Exeter Resource Corporation is a Canadian mineral exploration company focused on the discovery and development of gold and silver properties in South America. The Company has C$77 million in its treasury. On January 19, 2010 the Board approved a proposal to undertake a spin-out transaction pursuant to which the assets of Exeter would be separated into two highly focused companies.
On the Caspiche Project in Chile an inferred mineral resource estimate of 1,117 Mt (million metric tons) at a grade of 0.55 grams per metric ton gold and 1.12 grams per metric ton silver including 1,017 Mt at a grade of 0.22% copper was announced in September 2009. 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*. Drilling with six rigs is underway to expand and upgrade the resource.
On the Cerro Moro Project in Argentina an initial inferred mineral resource estimate of 646,000 ounces gold equivalent(xx) at a grade of 18 g/t gold equivalent(xx) was announced mid-2009. A new Cerro Moro resource estimate is scheduled for April 2010, to be followed by a Preliminary Assessment Study as noted above. These studies will form the basis of a mine development decision and the submission of the project to Provincial authorities for permitting. Exploration drilling will continue through 2010.
Matthew Williams, Exeter's Exploration Manager and Justin Tolman, Exeter's Caspiche Project Manager both considered a "qualified person" within the definition of that term in National Instrument 43-101, Standards of Disclosure for Mineral Projects, has supervised the preparation of the technical information contained in this news release.
You are invited to visit the Exeter web site at www.exeterresource.com.
EXETER RESOURCE CORPORATION
President and CEO
*Gold ("Au") equivalence for copper ("Cu") and silver ("Ag") was calculated by Exeter using assumed metal prices of US$800/ounce ("oz") for Au, US$12/oz for Ag and US$2/pound ("lb") for Cu. The formula to calculate Au equivalence for Cu was pounds of Cu multiplied by 2 and divided by 800; Au equivalence for Ag was calculated using the formula oz of Ag multiplied by 12 and divided by 800, and in both cases assumes 100% recovery. Reported grades and metric tons have been rounded (see news release NR 9-22 dated October 20, 2009).
(xx)Inferred mineral resource estimate of 1,098 Mt 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. Gold equivalent is calculated by dividing the silver assay result by 70, adding it to the gold value and assuming 100% metallurgical recovery (see news release NR 9-14 dated July 8, 2009).
Safe Harbour Statement - This news release contains "forward-looking information" and "forward-looking statements" (together, the "forward-looking statements") within the meaning of applicable securities laws and the United States Private Securities Litigation Reform Act of 1995, including the Company's belief as to the extent and timing of its drilling programs, various studies including engineering, environmental, infrastructure and other studies, and exploration results, budgets for its exploration programs, the potential tonnage, grades and content of deposits, timing, establishment and extent of resources estimates, potential for financing its activities, potential production from and viability of its properties, expected cash reserves and the expected benefits of the proposed spin-out transaction. These forward-looking statements are made as of the date of this news release. Users of forward-looking statements are cautioned that actual results may vary from the forward-looking statements contained herein. While the Company has based these forward-looking statements on its expectations about future events as at the date that such statements were prepared, the statements are not a guarantee of the Company's future performance and are subject to risks, uncertainties, assumptions and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Such factors and assumptions include, amongst others, the effects of general economic conditions, the price of gold, silver and copper, changing foreign exchange rates and actions by government authorities, uncertainties associated with legal proceedings and negotiations and misjudgements in the course of preparing forward-looking information. In addition, there are also known and unknown risk factors which could cause the Company's actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. Known risk factors include risks associated with project development; the need for additional financing; operational risks associated with mining and mineral processing; fluctuations in metal prices; title matters; uncertainties and risks related to carrying on business in foreign countries; environmental liability claims and insurance; reliance on key personnel; the potential for conflicts of interest among certain officers, directors or promoters of the Company with certain other projects; the absence of dividends; currency fluctuations; competition; dilution; the volatility of the Company's common share price and volume; tax consequences to U.S. investors; and other risks and uncertainties, including those described in the Company's Annual Information Form for the financial year ended December 31, 2008, dated March 27, 2009 filed with the Canadian Securities Administrators and available at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company is under no obligation to update or alter any forward-looking statements except as required under applicable securities laws.
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For further information: For further information: B. Roxburgh, President, or Rob Grey, VP Corporate Communications, Tel: (604) 688-9592, Fax: (604) 688-9532, Toll-free: 1-888-688-9592, Suite 1260, 999 West Hastings St., Vancouver, BC, Canada, V6C 2W2, email@example.com