Exeter provides Update on the Caspiche Gold-Copper Project
Vancouver, B.C., June 26, 2012 – Exeter
Resource Corporation (NYSE-MKT:XRA, TSX:XRC, Frankfurt:EXB – “Exeter” or the “Company”) is pleased to
provide an update on activities on its Caspiche project in the Maricunga gold belt of central
Chile.
• The Company has been conducting geotechnical and metallurgical drilling at Caspiche and
water exploration drilling north of Caspiche to place it in a position to commit to a feasibility study
(“FS”) on the heap leachable portion of the Caspiche deposit.
• On the sulphide deposit, lower order
technical studies to advance the project are continuing. These studies include metallurgical
optimisations, process engineering and baseline environmental studies.
• The Company is cognisant of
the difficult market conditions currently affecting equity markets. To this end a strategy has been
formulated to cautiously advance the project in order to conserve the $61 million treasury.
• Project
expenditures will be delayed, including the initiation of the heap leach project FS.
Exeter Going
Forward
Exeter Chairman, Mr. Yale Simpson comments: “Exeter is in a unique position for a junior
explorer. We have a world class gold-copper asset in an excellent jurisdiction and a very substantial
treasury.
“In my view the current depressed share price does not reflect the potential future value
of the Caspiche deposit, a value that could well be a multiple of our current valuation. The timing will
depend on metal prices and world economic conditions.
“The Board is determined to see a higher
valuation and to that extent Caspiche is ‘not for sale’. We have set aside the funds necessary to
maintain the asset for the months or years necessary to bring value to our shareholders. We remind
ourselves daily that no one has found another Caspiche-size deposit in Chile for years, simply because
there aren’t many left to be found.
“We have a treasury sufficient to consider the acquisition of
another project however such an acquisition cannot jeopardise the security of our Caspiche asset. Our
view is simply that there are some very interesting opportunities becoming available, potentially for
joint venture or ‘on sale’.”
Staging the Development of the Caspiche Project
On June 6, 2011, the
Company released the “Oxide Gold Prefeasibility Study” (PFS-1), to demonstrate the potential economics
of developing the upper gold zone at Caspiche as a stand-alone mining project. On January 17, 2012, the
Company released the larger “Pre-Feasibility Study of the Caspiche Gold Project” (PFS-2), to demonstrate
the potential economics of the total Caspiche gold-copper deposit, including the upper oxide gold zone.
PFS-1 was effective in showing that the development of the upper gold zone is potentially within the
financial reach of a company of Exeter’s size. In contrast, PFS-2 predictably showed that the
development of the larger project, with relatively high capital costs which are in line with comparable
porphyry-type gold-copper projects, will likely require development by a major mining company or a joint
venture group.
The study results demonstrate the potential for Caspiche to be developed in two
phases. A simple heap leach gold project could be developed as Phase 1 followed by the development of
the much larger sulphide gold-copper deposit as Phase 2. Phase 1 has the potential of being brought into
production reasonably rapidly and at modest capital cost, to process both the oxide ore modelled in
PFS-1, and potentially, some of the low copper content, leachable “MacNeill zone” sulphide ore which
overlies the western edge of the gold-copper sulphide deposit. During Phase 1 the Company could continue
the pre-development (engineering, infrastructure and environmental) studies relevant to Phase 2 of the
project.
Below is a summary of work conducted subsequent to the issue of the January 17, 2012
pre-feasibility study:
Exploration:
Activity during the 2011-2012 exploration season included
drilling, trenching and sampling as part of the detailed geo-technical, hydrogeological and
metallurgical programs detailed below. Drilling highlights include a modest extension to the oxide
mineralization and confirmation of modelled mineralization within the sulphide portion of the deposit.
The drilling results will be incorporated into an updated resource estimate for the deposit. These
drilling results have the potential to bring some material currently categorised as “inferred” into the
“measured and indicated” category thus allowing its inclusion into “mineral reserves”.
Regional
exploration and reconnaissance drilling also continued during the season on the Company’s regional land
position.
Metallurgical Testing:
Recoveries for gold and copper in sulphide concentrates were
estimated at 68% and 86% respectively in PFS-2. The sensitivity analysis in PFS-2 indicated a
significant positive impact on the project net present value by improving these recoveries. The current
metallurgical testing program will provide additional data to assist in remodelling the metal
recoveries.
Oxide Metallurgy:
Five large diameter (PQ) drill holes have been shipped to
McClelland International laboratories in the USA. Once a decision is made to proceed, column leach tests
will be performed to determine recoveries on a year to year basis in accordance with a more detailed
mining schedule. Initial column leach test results would be expected about 4 months later and final
results, six months later.
Australia-based consultants, Blastechnology, examined the Caspiche
geotechnical data base for the oxide and MacNeill zone ore. They have confirmed that the fracturing
predictions incorporated in the prefeasibility studies are correct. Blastechnology further reported that
the simple scalping and open circuit crushing configuration adopted in PFS-1 will deliver a -50 mm sized
product to the leach pads. With up to one third of material to be screened out prior to primary
crushing, the crusher size can be reduced, with a resulting capital cost reduction.
Low Copper
Sulphide Material (MacNeill Zone):
MacNeill zone is gold-bearing (low copper) sulphide material that
represents a relatively small component of the total sulphide deposit. The material partially overlies
the western edge of the gold-copper sulphide ore. A program to examine its’ amenability to heap leaching
at a 20mm crush size (rather than flotation) is justified. A new metallurgical hole was recently drilled
to provide the material required for such leach testing.
Sulphide Metallurgy:
Three holes have
been drilled to provide sulphide material for recovery optimization testwork. This program is ready to
proceed and when approved will help confirm the characteristics of various metallurgical domains in the
sulphide body as well as recovery differences between them. The goal is to improve overall recoveries of
gold by 5% and copper by 3%, a result that would considerably enhance the project economics. Studies
which include optimizing grind size by evaluating a primary grind of 100 microns (versus the current 130
microns) may improve flotation recoveries. Locked cycle tests will be conducted later in the program on
the individual domain materials.
High pressure grinding roll (HPGR) testwork on the “soft” Caspiche
ore has been conducted, resulting in marginally improved gold and copper recoveries in some domains and
a significant reduction in total comminution power in all domains. The justification for the addition of
this relatively high cost component into the process circuit rather than the conventional SAG milling
proposed in PFS-2 is now dependent on test work to improve recoveries at the finer grind size. HPGR
could be integral in delivering a finer primary grind without using more power. Its adoption will be the
subject of a detailed trade off study. HPGR is proposed for the neighbouring Cerro Casale project where
the mineralization is reported to be much harder than the Caspiche ore.
Water Supply:
Exeter
continues to investigate the Rio Peñas Blancas area, where it has an option over granted water rights of
300 litres a second (l/s) from surface sources. Schlumberger Water Services (SWS), Exeter’s consultant
for this work, is supervising comprehensive measurement and test programs with the objective of
modelling the potential harvesting of those water flows. Phase 1 of the project only requires 85 l/s
which is well below the optioned amount of water should the SWS work indicate that the water can be
sustainably harvested. Other studies, designed to support an environmental impact application (“EIA”),
including stratigraphic water temperature, conductivity and water chemical composition determinations
have been completed over Laguna Verde which is the inflow receptor of Rio Peñas Blancas.
Separately,
Exeter is performing a water exploration program, including drilling, at its granted water exploration
concession. The drilling program is designed to explore for sub-surface water to help meet the water
requirements for the potential Phase 2 development at Caspiche. Two large diameter hole collars were
successfully installed on site through the poorly consolidated, porous upper surface gravels prior to
the program being suspended in June for the Andean winter. Work is planned to resume in Q4 2012 where
the prepared drill holes will be extended to depth.
Geotechnical Evaluation, Hydrology and Power Line
Studies:
Knight Pièsold was contracted to complete a geotechnical evaluation of the Caspiche project
area. The field campaign included completing a total of 43 trenches, 18 drill holes and taking
approximately 90 samples over key areas of the project to show suitability of sites selected for the
process facilities, heap leach pads etc. Initial indications are that the overburden is of a quality
suitable for mass fill, such that a separate quarry area to produce construction material may not be
required and furthermore that this material may be suitable for concrete aggregates. When confirmed this
will have a positive impact on capital construction costs for the Phase 1 project.
SWS has advanced
project hydrology and hydrogeology studies for the Caspiche site. A drill hole monitoring campaign is
complete and will determine potential surface and sub-surface water flows. Two additional drill holes
and rehabilitation of several existing holes were recently completed to complement this program. Pump
testing has also been undertaken to determine the potential for interaction between the drill holes and
to provide additional inputs for modelling. This work will allow surface water management systems to be
designed and will provide inputs with regard to expected open pit dewatering requirements.
As part of
the surface water flow and quality programs, samples of the waste material associated with the MacNeill
zone have been sent to ALS Environmental laboratories in Chile to complete Acid Base Accounting (ABA)
and Synthetic Precipitation Leaching Procedure (SPLP) tests. These tests will determine the potential
for the waste rock to generate acid water and the potential leaching out of metals, primarily iron, from
waste during precipitation events. The results of these tests will be used in the design of a water
treatment plant to ensure a water discharge in compliance with environmental standards.
POCH
engineering has been contracted to complete a FS level evaluation to extend the nearby Maricunga Mine
overhead power line by 15 km. to provide energy for the Phase 1 operation. A technical evaluation of the
substation and power line has been completed and an access corridor selected. A geotechnical evaluation
is expected to be completed in the near future with a final report and costing to be generated
thereafter. Initial evaluations indicate that the existing line and substation installations will
support the increased power demand for the Phase 1 project. Should this be confirmed it will provide an
operating cost saving relative to the diesel generated power costs modelled in PFS-1.
Improved
topography has been acquired for the Caspiche project area and the water pipeline corridor. Topography
was produced to 0.5m contours, a suitable precision to allow FS engineering to be
completed.
Environmental Studies:
Baseline studies continue across the Caspiche heap leach project
area. Separately, an initial stakeholder participation program as required in accordance with the
International Labour Office (ILO) convention 169 has commenced.
Exeter plans to be in a position to
submit an EIA to the Chilean authorities within 6 months of determining to commence a FS for Phase 1 of
the project.
Mr Jerry Perkins, Vice President Operations and Justin Tolman, General Manger Chile for
Exeter, are qualified persons as defined in NI 43-101 and is responsible for preparing the information
contained in this news release.
About Exeter
Exeter Resource Corporation is a Canadian mineral
exploration company focused on the exploration and development of the Caspiche project in Chile. The
project is situated in the Maricunga gold district, between the Maricunga mine (Kinross Gold Corp.) and
the Cerro Casale gold deposit (Barrick Gold Corp. and Kinross Gold Corp.).
The discovery represents
one of the largest mineral discoveries made in Chile in recent years. Exeter has completed
pre-feasibility studies that demonstrate the potential for commercializing this world class discovery.
The Company currently has cash reserves of CDN$61 million and no debt.
You are invited to visit the
Exeter web site at www.exeterresource.com.
EXETER RESOURCE CORPORATION
Bryce Roxburgh
President
and CEO
For further information, please contact:
B. Roxburgh, President or
Rob Grey, VP Corporate
Communications
Tel: 604.688.9592 Fax: 604.688.9532
Toll-free: 1.888.688.9592
Suite 1660, 999 West
Hastings St.
Vancouver, BC Canada V6C 2W2
exeter@exeterresource.com
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 in relation to the Company’s belief as to
the extent and timing of its drilling programs, various studies including feasibility studies,
engineering, environmental, infrastructure and other studies, and exploration results, budgets for its
exploration and engineering 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, availability of water, power, surface rights and other
resources, permitting submission and timing and expected cash reserves. 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 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 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, silver and copper, changing foreign exchange rates and actions by government authorities,
uncertainties associated with negotiations and misjudgments in the course of preparing forward-looking
information. In addition, there are 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; including risks associated with the failure to satisfy the
requirements of the Company’s agreement with Anglo American on its Caspiche project which could result
in loss of title; 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, 2011 dated March 30, 2012 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.
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 U.S. 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 measures.
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