EXTORRE ANNOUNCES UPDATE TO CERRO MORO PRELIMINARY ECONOMIC ASSESSMENT 8 YEAR MINE LIFE
OZ/YR GOLD EQUIVALENT FOR FIRST 3 YEARS
Vancouver, B.C., August 4, 2011 – Extorre Gold Mines Limited
(TSX:XG, Frankfurt: E1R, OTC: EXGMF – “Extorre” or the “Company”) is pleased to announce significant
benefits for an expanded Cerro Moro project, as reported in a new Preliminary Economic Assessment
(“PEA-2”, or the “Study”).
The new Study does not include mining of the recently discovered high
grade Zoe vein or potential new resources from the Martina, Carla and Esperanza veins. An updated
resource estimate that will include these veins is scheduled for release in Q4-2011.
contemplates an increased mining and ore processing rate of 1,000t ore/day (“tpd”), up from 750tpd in
the previous PEA, increased metal price assumptions (US$ 1,320/ounce gold and US$ 26/ounce silver) and
the mining of all ore zones using a combination of open pit and underground methods. The Study is based
on a NI 43-101 compliant mineral resource estimate completed in April, 2011 which included drilling
completed on the Escondida, Loma Escondida, and Gabriela zones up until January, 2011.
processing and capital cost estimations used in PEA-2 have been completed to prefeasibility level or
higher. PEA-2 is framed as a PEA to allow the inclusion of new inferred resources in a future study,
PEA-3. PEA-2 was prepared by GR Engineering Services of Perth, Australia with input from leading
Highlights of PEA-2 include:
• Total precious metal production of 494,700
ounces of gold and 26,600,000 ounces of silver over 8.25 years, based on mining and milling 1000t
• For the first 3 years, gold production averages 111,200 ounces/year plus silver production of
4.7 million ounces/year, for an average gold equivalent production of 206,300 ounces* per year. Average
cash costs are $US 236 per ounce on a gold equivalent* basis.
• Initial capital (Direct costs): US$
149.8 million + $US 25.7 million refundable VAT.
• Indirect capital costs (EPCM contract, Owners
costs): US$ 32.8 million
• Pre-tax undiscounted cash flow: $US 581 million
• Payback Period at a 0%
discount rate: 12 months
PEA-2 is based on the following resources (see attached resource
• An Indicated Resource of 0.66 Mt (million metric tonnes) at 19 g/t gold (grams per
metric tonne) and 835 g/t silver from the high grade Escondida and Loma Escondida vein zones, plus
• Lower grade Indicated Resources from the Gabriela vein (0.53 Mt at 2 g/t gold and 371 g/t silver)
and Inferred Resources of 1.86 Mt at 3.0 g/t gold and 182 g/t silver from the Escondida, Loma Escondida,
Gabriela, Esperanza, and Deborah veins.
It should be noted that this assessment is by definition
preliminary in nature as it includes some mineral resources that are too speculative geologically to
have the economic considerations applied to them that would enable them to be categorized as reserves at
this time. As such there is no certainty that the preliminary assessment and project economics will be
realized. A NI 43-101 Technical Report for the Cerro Moro PEA will be filed on SEDAR (www.sedar.com) and
will be posted on the Company’s website at www.extorre.com
*Gold equivalent ounces are calculated by
dividing the silver ounces by 50 and adding it to the gold value. **Silver equivalent ounces are
calculated by multiplying the gold ounces by 50 and adding it to the silver value.
Parameters utilized in the 1,000tpd Cerro Moro PEA are indicated in the table below:
Points of Comparison between this Study
and the October 2010 PEA
• The capital costs are higher to reflect the increased mill throughput, the
extra cost of a conventional tailings facility (versus combined dry tailings/waste rock handling), a
larger mining fleet, local and industry cost escalations, and EPCM / Owners Costs that were not included
in the earlier study, plus
• Higher operating costs to reflect particularly conservative labour rates,
higher total mining costs to allow for open pit mining of the Escondida Far West area, and higher unit
costs in the process plant due to very high silver grades.
Environmental Impact Assessment
approved Environmental Impact Assessment (“EIA”) for the development of Cerro Moro contemplated mining
750t ore/day. An addendum to that EIA will be prepared following a PEA-3 study. The new study will
include increased resources that include the development of the Zoe, Martina, Carla and Esperanza-Nini
veins. The Santa Cruz Mines Ministry has indicated that the approval time for an addendum to an existing
EIA is considerably shorter than that for a new EIA submission.
Current Engineering Activities
In addition to drilling, the Company will perform additional mining, geotechnical and metallurgical
work on the new veins. Permitting for the many operational components of the project will also continue
over the coming months. The Company expects that the next PEA will be able to consider a minimum 50%
increase in both the mining and processing rates over those in this Study.
Mr Bill Gosling, Senior Process Engineer of GR Engineering Services, Perth, Australia, and
Mr. Eduardo Rosselot, Principal Mining Engineer of NCL Ltda., Santiago, Chile, are qualified persons as
defined in NI 43-101 and have read and approved all technical portions of this release except for the
mineral resource statement.
Mr David (Ted) Coupland, Director - Geological Consulting and Principal
Geostatistician of Cube Consulting Pty Ltd, is a qualified person as defined in NI 43-101 and is
responsible for preparing the April 2011 NI 43-101 compliant mineral resource statement.
Roth, President and CEO of Extorre Gold Mines Ltd, is a qualified person as defined in NI 43-101 and is
responsible for preparing the information contained in this news release.
is a Canadian public company listed on the Toronto and NYSE Amex Exchanges (symbol XG). Extorre’s assets
comprise approximately $44 million in cash, the Cerro Morro, Puntudo and Don Sixto projects, and other
mineral exploration properties in Argentina.
An updated NI 43-101 compliant mineral resource
estimate for the Cerro Moro project was completed in April 2011 and includes: Indicated Category 443,000
oz. gold + 24.2 million oz. silver (927,000 oz. gold equivalent*), plus Inferred Category: 178,000 oz.
gold + 10.8 million oz. silver (396,000 oz. gold equivalent*)
The April 2011 Indicated Category
resource includes 757,000 oz gold equivalent* from the Escondida and Loma Escondida sectors at an
average grade of 35 g/t gold equivalent*, a grade considered exceptional by industry standards. The
silver contribution is high, accounting for approximately one-half of the total metal value. Additional
Inferred Category resources of 396,000 ounces gold equivalent* are also reported from Cerro Moro.
drill rigs are currently dedicated to new resource drilling at the Cerro Moro project, with particular
emphasis being placed on the evaluation of the recent high grade gold-silver discovery at Zoe. An
updated mineral resource estimate for the Cerro Moro project is scheduled to be released in Q4-2011, and
is expected to include maiden mineral resources for the Zoe, Carla, Martina, and Esperanza
Northwest-Nini sectors. The drill testing of further new targets at both the Cerro Moro project and on
select Santa Cruz Regional prospects is also expected to be undertaken during the second half of 2011.
You are invited to visit the Extorre web site at www.extorre.com.
EXTORRE GOLD MINES
President and CEO
For further information, please
Rob Grey, VP Corporate Communications
Tel: 604.681.9512 Fax: 604.688.9532
Suite 1660, 999 West Hastings St.
Canada V6C 2W2
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 our belief as to the extent
and timing of its drilling programs, various studies including the PEA, and exploration results, the
potential tonnage, grades and content of deposits, timing, establishment and extent of resources
estimates, potential production from and viability of its properties, production costs and permitting
submission and timing. These forward-looking statements are made as of the date of this news release.
Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no
assurance that the future circumstances, outcomes or results anticipated in or implied by such
forward-looking statements will occur or that plans, intentions or expectations upon which the
forward-looking statements are based will occur. While we have based these forward-looking statements on
our expectations about future events as at the date that such statements were prepared, the statements
are not a guarantee that such future events will occur and are subject to risks, uncertainties,
assumptions and other factors which could cause events or outcomes to differ materially from those
expressed or implied by such forward-looking statements. Such factors and assumptions include, among
others, the effects of general economic conditions, the price of gold and silver, changing foreign
exchange rates and actions by government authorities, uncertainties associated with legal proceedings
and negotiations and misjudgments in the course of preparing forward-looking information. In addition,
there are known and unknown risk factors which could cause our 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 of our officers, directors or promoters of with
certain other projects; the absence of dividends; currency fluctuations; competition; dilution; the
volatility of the our common share price and volume; tax consequences to U.S. investors; and other risks
and uncertainties, including those relating to the Cerro Moro project and general risks associated with
the mineral exploration and development industry described in our financial statements and MD&A for the
fiscal period ended December 31, 2010 filed with the Canadian Securities Administrators and available at
www.sedar.com. Although we have 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. We are under no obligation to
update or alter any forward-looking statements except as required under applicable securities
Cautionary Note to United States Investors - The information contained herein and incorporated
by reference herein has been prepared in accordance with the requirements of Canadian securities laws,
which differ from the requirements of United States securities laws. In particular, the term “resource”
does not equate to the term “reserve”. The Securities Exchange Commission’s (the “SEC”) disclosure
standards normally do not permit the inclusion of information concerning “measured mineral resources”,
“indicated mineral resources” or “inferred mineral resources” or other descriptions of the amount of
mineralization in mineral deposits that do not constitute “reserves” by SEC standards, unless such
information is required to be disclosed by the law of the Company’s jurisdiction of incorporation or of
a jurisdiction in which its securities are traded. U.S. investors should also understand that “inferred
mineral resources” have a great amount of uncertainty as to their existence and great uncertainty as to
their economic and legal feasibility. Disclosure of “contained ounces” is permitted disclosure under
Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does
not constitute “reserves” by SEC standards as in place tonnage and grade without reference to unit
NEITHER THE TSX NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE
POLICIES OF THE TSX EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS NEWS RELEASE