Proactive Investor's  Instablog

Xmet (CVE:XME) said Monday that it has extended its four year option agreement on the Duquesne-Ottoman gold project by another three years, giving the junior mineral explorer additional time to develop the Quebec-based property.

In February 2010, Duquesne-Ottoman Mines, a subsidiary of Xmet, signed a deal with Duparquet Assets, giving Duquesne-Ottoman the option to earn up to 75% of Duparquet, which owns the Quebec project, by making a number of payments and incurring a series of expenditures by May 31, 2014.

The amendment extends the option period to make these payments and expenditures to May 2017, giving Xmet more time to complete certain financing requirements, and advance the property.

“Our near term objective is to complete and publish the updated NI 43-101-compliant resource estimate on the property which we expect will significantly add to the existing 525,000 inferred ounces gold resource, and to conduct a 7,000 drilling program to further expand the inferred resource base," said president and COO Charles Beaudry.

In addition, Xmet plans on undertaking a stripping and drilling program of the high grade veins on the Shaft and North Shaft Zones in an effort to convert near surface ounces to the indicated category. Its goal is to outline over 1 million ounces of gold resources at the site, of which at least 100,000 ounces will be near surface, high grade indicated resources.

Diamond drilling costs on the property are also very low relative to its peers, allowing Xmet to target gold resource expansion at a very low dollar cost per ounce, it said.

The Duquesne-Ottoman project consists of 20 claims, commonly referred to as Duquesne West, and 40 claims, referred to as Ottoman, covering an area of 928.6 hectares north of the city of Rouyn-Noranda and east of the village of Duparquet, within the townships of Duparquet and Destor.

Chairman and CEO of Xmet, Alex Stewart, commented: “We think that this amendment to the option agreement will be very helpful in our efforts to advance the Duquesne-Ottoman Property through its development stages and we thank Duparquet Assets for supporting our efforts in this regard."

The company's phase one drilling campaign over the past six months at the property was successful in targeting two under-explored areas on the property, the 20-20 and Nip Zones.

Highlights from the two zones included 3.20 g/t gold over 8.10 metres in hole DO-11-20 at the 20-20 Zone; and 6.65 g/t gold over 7.7 metres, including 10.01 g/t gold over 4.3 metres in hole DO-10-05.