VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 22, 2011) - Extorre Gold Mines Limited (TSX:XG)(FRANKFURT:E1R)(OTCQX:EXGMF) ("Extorre" or the "Company") is pleased to announce the discovery drill results from reconnaissance drilling on the Falcon property, located 80 kilometres to the northwest of Cerro Moro, and 6 kilometres to the northeast of Mariana Resources' Dos Calandrias project. Four of five initial holes have intercepted broad zones of gold - silver mineralization.
Hole FD004 intersected 53 metres ("m") at 1.12 grams per tonne ("g/t") gold + 30 g/t silver (1.62 g/t gold equivalent*).
Significant drilling results from the Falcon reconnaissance program (at a 0.5 g/t gold equivalent* cut-off grade):
* Gold equivalent grade is calculated by dividing the silver assay result by 60, adding it to the gold value and assuming 100% metallurgical recovery.
Click here for the drill plan and section: http://www.extorre.com/pdf/release/diagram_10.pdf.
The Falcon project tenements cover an area of 13,986 hectares. Drilling to date has focused on the Crest target where initial reconnaissance rock chip sampling of outcropping alteration returned anomalous gold and silver assays. To assist with defining drill targets grid based surface sampling and a resistivity geophysical survey were conducted. A broad zone of mineralization with a 400 metre strike length has been delineated by this initial drilling program. Mineralization remains open in all directions and follow-up drilling is proposed for next month. Mineralization comprises zones of silica-sulphide matrix breccia within a broader disseminated mineralized halo associated with silica flooding.
A number of structural targets are yet to be tested for potential high grade vein style mineralization. These targets have been defined by combined surface mapping and rock chip sampling along with detailed ground magnetic imagery. Further drilling on the Crest prospect will be aimed at assessing the continuity of higher grade zones as well as extending the limits of the broader lower grade mineralized system. Deeper drilling at Crest will aim at testing for blind high grade vein style mineralization.
Extorre's Chief Geologist Glen Van Kerkvoort commented "While four rigs remain dedicated to expanding the high grade resource at Cerro Moro we have expanded the regional exploration team in order to intensify regional exploration, whilst enabling the successful Cerro Moro team to remain focussed on exploration and development there. Falcon is an exciting new project with some analogies to a lithological controlled system such as deposits in the Ivanhoe mining district of northern Nevada.
"Both Mariana's Dos Calandrias and Extorre's Falcon projects have opened the Deseado Massif to potential for large disseminated epithermal deposits. A second drill rig has been contracted in order to enable the simultaneous drilling of both the Puntudo and the Falcon properties.
"We have commenced metallurgical testwork of Falcon drillcore to ascertain if the gold is likely to be recoverable by conventional extraction and leaching techniques. We look forward to results from the next drilling program at Falcon whereby we expect to gain better information on the size and continuity of the gold mineralized zone."
Extorre also completed a drilling program on the Verde project located in the western part of the Deseado Massif and its FDB project located 8 kilometres south of Falcon, with no significant results. Falcon was optioned from Cerro Vanguardia S.A. (CVSA) along with the Puntudo, Verde and Azul properties and all of these are subject to a once only back-in right, whereby CVSA has the right to earn up to a 70% interest in the properties by paying Extorre a multiple of expenditure to date and financing Extorre's share of development costs. Contractual requirements which require CVSA to determine whether or not to exercise their back-in right were triggered early this month, and CVSA is now required to make that decision next month. In the event that CVSA does not back-in, Extorre will retain a 100% ownership and CVSA will retain a 2% NSR.
Quality Control and Assurance
Drill widths presented above are drill intersection widths and may not represent the true widths of mineralization.
Gold assay results presented above are preliminary with no cutting of high grades. All diamond drill core samples are split on regular metre intervals or on geological contacts and represent sawn half HQ-size core. Reverse circulation drill samples are collected using a cyclone in one metre intervals. Samples were prepared at the ALS Laboratory ("ALS") preparation facility in Mendoza, Argentina and assayed by fire assay (50 gram charge) at the ALS laboratory in Chile.
Check assaying of all samples assaying greater than 1.0 g/t gold is completed by ALS. Samples returning greater than 10 g/t gold and/or greater than 100 g/t silver are assayed using gravimetric analyses. Standard and blank samples are used throughout the sample sequence as checks for the diamond drilling reported in this release.
Glen Van Kerkvoort, Extorre's Chief Geologist and 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.
Extorre is a Canadian public company listed on the Toronto Stock Exchange (symbol XG) and on the OTCQX (symbol EXGMF). Extorre's assets comprise approximately $40 million in cash, the Cerro Morro and Don Sixto projects, and other mineral exploration properties in Argentina.
On April 19, 2010, Extorre announced a National Instrument 43-101 compliant mineral resource estimate for Cerro Moro:
Indicated Category: 357,000 oz. gold + 15.3 million oz. silver (612,000 oz. gold equivalent*), plus Inferred Category: 190,000 oz. gold + 12.0 million oz. silver (390,000 oz. gold equivalent*)
The 612,000 ounce gold equivalent* indicated resource, has an average grade of 32.3 g/t gold equivalent*, a grade considered exceptional by industry standards. The silver contribution is high, accounting for over 40% of the metal value. Additional inferred resources of 390,000 ounces gold equivalent* are also reported from Cerro Moro.
Extorre released the results of a preliminary economic assessment ("PEA") of the Cerro Moro Project on October 19, 2010. The PEA highlighted the robust economics of a future mine expected to produce an average of 133,500 gold equivalent* ounces annually during the first 5 years of operations. The cash cost per ounce (gold equivalent*) is estimated to be US$ 201 per ounce. Project CAPEX has been estimated at US$ 131 million (of which 21% is a VAT that is refundable after production commences). The project economics were calculated using gold and silver prices of US$ 950/ounce and US$ 16/ounce, respectively.
Extorre submitted an Environmental Impact Assessment for the Cerro Moro mine development to Santa Cruz Authorities on September 16, 2010. Mining permits and approvals for the mine are expected to be received by the end of Q1-2011.
You are invited to visit the Extorre web site at www.extorre.com.
EXTORRE GOLD MINES LIMITED
Eric Roth, President and CEO
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 our belief as to the extent and timing of its drilling programs, various studies including the PFS, and the Environmental Impact Assessment, 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 interim financial statements and MD&A for the fiscal period ended March 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 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 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 measures.
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For more information, please contact
Extorre Gold Mines Limited
VP Corporate Communications
604.681.9512 or Toll-free: 1.888.688.9512