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Extorre Gold releases further high grade gold-silver results from Cerro Moro

May 31, 2011 12:43 PM ETPAAS
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Extorre Gold Mines (AMEX:XG) (TSE:XG) reported Tuesday that it has continued to drill high grade gold-silver results from the Zoe discovery, part of the Cerro Moro project in Santa Cruz, Argentina.

Notable intersections included 8.00 metres at 84 grams per tonne (g/t) gold and 1,332 g/t silver, or 35.0 g/t gold equivalent in hole MD1220, including 4.15 metres at 15.2 g/t gold and 2,419 g/t silver, or 63.6 g/t gold equivalent.

Other significant results included hole MD1234, which intersected 2.00 metres at 36.3 g/t gold and 1,858 g/t silver, including 0.90 metres at 63.5 g/t gold and 3,135 g/t silver; and hole MD1253, which returned 2.00 metres at 37.0 g/t gold and 1,924 g/t silver, including 0.90 metres at 80.4 g/t gold and 4,023 g/t silver.

The company said that a total of 34 diamond drill holes now define the Zoe structure over a strike length of roughly 1.5 kilometres, one kilometre of which shows high grade gold-silver mineralization that is peripheral to a "central, bonanza grade zone".

"As with the Martina and Escondida Far West zones located west of Zoe, we are finding the near surface mineralization is generally significantly lower grade than what is found at depth," said Extorre's project manager, Fernando Chacon.

"We will therefore begin step back drilling to test for high grade mineralization at more favourable depths."

Indeed, management said it is considering moving two drill rigs to Cerro Moro from the company's other Puntudo project, which is located around 220 kilometres to the west. The move is planned for mid-June.

Of the 34 holes completed to date at the Zoe discovery, 22 have now been publicly released. Currently, there are four rigs operating at Cerro Moro, with three at the Zoe target.

Last April, the company announced that Cerro Moro had estimated indicated resources of 357,000 ounces of gold and 15.3 million ounces of silver, or 612, 000 ounces of gold equivalent, plus inferred resources of 190,000 ounces of gold and 12.0 million ounces of silver.

A preliminary economic assessment on the project last October also highlighted the robust economics of Cerro Moro, as the mine is expected to produce an average of 133,500 ounces of gold equivalent during its first five years of operations, at a cash cost of just US$201 per ounce.

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