Oct 8 2014
Exeter Resource Corporation is pleased to announce an expanded water drilling program at its Caspiche gold-copper project in northern Chile.
The program follows the discovery of an extensive subsurface aquifer earlier this year at the Company's water exploration concession north of Caspiche (secured under a JV option for a 90% interest).
The expanded 2014 water exploration program, budgeted at US$1.6 million, includes completing two additional large diameter water bore holes and a series of smaller diameter water monitoring holes. Down hole pump tests will be carried out, together with water level measurements to quantify water flow rates and aquifer recharge rates. Based on the one pump test carried out in Q2/14, it is believed that potential exists for sustainable flows of over 200 litres per second (L/s) once all five holes have been tested (two new holes and three from drilling in Q2/14). Such flow rates, if confirmed, should be adequate for any of the mining options recently outlined in the May 6th, 2014 preliminary economic assessment (PEA) for Caspiche. See Exeter News Release NR 14-03 dated May 6th, 2014.
The May 6th, 2014 PEA identified three new low capex potential development options, all of which required modest quantities of water compared to the large open pit option from the 2012 Pre-feasibility study (PFS). The PEA calculated that the 30,000 tonne per day ("tpd") standalone oxide operation would require a peak water supply of less than 50 L/s. This option produces an estimated average of 122,000 gold equivalent* ounces annually over a projected ten year mine life, including 148,000 ounces annually in the first five years.
The standalone oxide open pit mine plan benefits from lower up front capital requirements and sequenced higher start up grades in the initial part of the mine life. In addition, a very low life-of-mine strip ratio (0.27:1) and favorable leach kinetics are positive contributors to the project economics. At US$1,300/oz gold pre-tax net present value ("NPV") is US$355 million, generating an internal rate of return ("IRR") of 34.7%, and a payback period of 3.4 years from initial construction (after-tax NPV 5% US$279 million, IRR 30.2%).
The other two potential development options considered the phased treatment of both oxides and sulphides at 60,000 tpd and 27,000 tpd respectively. One option looked at mining both gold in oxides and gold-copper in sulphides by open pit only. This option required a peak water supply of about 190 L/s. The other option looked at open pit mining of gold in oxides followed by selective high grade underground mining of gold-copper sulphide mineralization, an option that required a peak supply of 150 L/s.
The current program follows Q2/14 drilling wherein the Company completed three large diameter water drill holes with 12" internal diameters including the installation and equipping of casing, screens and filters. All three drill holes intersected potentially significant quantities of water based on a preliminary evaluation. Prior to the onset of winter conditions in Chile, one down hole pump test was completed on hole LV 03. This test included a series of variable and fixed-speed pump tests. At each flow rate tested, the water table stabilized and recovered rapidly, suggesting favourable permeability and transmissivity. Flow rates of +40 L/s were tested. See Exeter News Release NR 14-07 dated June 24th, 2014. Similar flow rates are expected from the two remaining, untested drill holes. Pump tests on these holes are expected to start this month.
Andinor Limitada, a specialist Chilean water drilling company, is the principal contractor for the new drilling program. Supervision of the program by Exeter and JV personnel will be augmented by expert, independent, external consultants. These consultants will also review and compile the water data which will form the basis of applications to the Dirección General de Aguas, the Chilean water authority, for water rights.
Exeter's Chilean subsidiary, Sociedad Contractual Minera Eton Chile ("Eton") and the Chilean subsidiary of Canadian company Atacama Pacific Gold Corporation ("Atacama") (TSX-V : ATM) have formed a JV to jointly explore for water in Northern Chile. Eton is earning an aggregate 90% interest in the Peñas Blancas (Laguna Verde) concession and other water concessions. See Exeter News Release NR 14-02 dated February 27th, 2014.
Jerry Perkins, Exeter´s VP Development and Operations and a "qualified person" ("QP") within the definition of that term in National Instrument 43-101, Standards of Disclosure for Mineral Projects, has reviewed and approved the technical information in this news release.
The economic analysis contained in the PEA is considered preliminary in nature. No inferred mineral resources form part of the PEA studies and no mineral reserves for the PEA have been established. Mineral resources are not mineral reserves and have no demonstrated economic viability. There is no certainty that economic forecasts outlined in the PEA will be realized. The PEA and the April 2012 Mineral Resource (as defined) may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant factors.
*Gold equivalent oz (AuEq) value is based on gold and silver revenues (prices and recoveries involved). AuEq oz [troy oz] = [Au g/t * Rec Au * tonnes]/31.1 + [Ag g/t * Rec Ag * tonnes]/31.1* silver price troy oz/ gold price troy oz. Recoveries are adjusted based on metallurgical characteristic of the resource.