WHAT A YEAR FOR
EXETER AND WORLD MARKETS!
2008 was a year of
significant achievement for Exeter although, as with many other companies,
the global financial crisis affected us severely. Our share price has since
made some recovery, but we still began 2009 at a price which reflects a 60%
discount to that of a year ago.
Fortunately, given Exeter's
strong management team, promising projects and available funding, we believe
that we will not only re-establish but surpass our former value. We are
particularly heartened that gold is now being recognized as a superior store
of value, and anticipate that gold equities will benefit accordingly.
With six successful years
of exploration behind us we have achieved the status as the premier junior
exploration company in Chile and Argentina. Despite a challenging year,
we have achieved several very significant milestones, as highlighted below.
THE YEAR IN REVIEW
January
Onwards - Cerro Moro Program
Drilling on our Cerro Moro property in Argentina continued through 2008, with
a series of press releases highlighting high grade gold and silver
discoveries on the property.
In March, Exeter announced
that it had signed a letter of intent with Fomento Minera de Santa Cruz
Sociedad del Estado (Fomicruz), a company owned by the Government of Santa
Cruz Province, Argentina, to explore, on an 80/20 basis (in favor of Exeter),
land adjoining Cerro Moro. By year end, geological and geophysical work had
established that the Escondida Vein system likely extends onto the new lands.
With the rapid escalation
of operating costs due to industry inflation, followed by the credit crisis,
it is now clear that ore grade, rather than the total metal content of a
project, will be a critical ranking factor over the next 1-2 years.
Consequently, during the last quarter we have moved away from the search for
new mineralized veins, to focus on the very high grade Escondida Vein system.
The many other partially tested veins on the property will be evaluated in
due course as the need for supplementary ore increases.
In August, we received
definitive results from metallurgical work at Cerro Moro indicating 90% plus
recoveries for both gold and silver.
These results indicate that a conventional, "off the
shelf" process circuit will be very effective in dealing with the
different styles of mineralization on the property.
In December, drilling was
suspended temporarily, in order to begin the process of producing a resources
estimate compliant with Canadian National Instrument 43-101 - Standards of
Disclosure for Mineral
Projects ("NI 43-101"). Drilling is expected to resume early in
2009, testing the Fomicruz land immediately to the west of Escondida.
March
2008 - $35 Million Financing
Exeter was fortuitous in timing a $35 million equity financing ahead of the
summer market decline and the later credit crisis. The financing was
conducted by a syndicate of underwriters led by Canaccord Capital Corporation
and BMO Capital Markets, and included National Bank Financial, Dundee
Securities and Haywood Securities. The financing has enabled us to maintain
our exploration programs, albeit on a scaled down basis, at a time when many
companies are on care and maintenance (or worse).
April
Onwards - Caspiche Program
Exeter's Caspiche copper-gold project in Chile has generated drilling results
that confirm the site as a major gold-copper discovery. Drill hole CSD-016 in
particular returned 718.75 metres (2,358 feet) at a grade of 1.0 gram per
tonne (0.029 ounces/ton) gold, a result that clearly demonstrates the
potential of the property both for size and grade.
In October, drilling
resumed at Caspiche using three diamond drill rigs capable of drilling to
depths of 1,000 metres plus (3,300 ft). The objective is to generate the data
necessary to announce a NI 43-101 compliant inferred resource estimate of the
size of the deposit in the second quarter of 2009.
Drilling is still in
progress, with some of the holes terminating within the mineralized system at
vertical depths of 900 metres plus (2,900 feet). Importantly, new drill holes
CSD-023 and CSD-028, located 250 metres (825 ft) and 200 metres (660 ft)
respectively from CSD-016, give additional support to the presence of a
central, higher grade zone to the deposit.
To establish the
metallurgical characteristics of the deposit, a testwork program was
initiated in November. Both the oxide and sulfide ore types will be evaluated
in the program.
Our success at Caspiche has
brought the project to the attention of both securities analysts and certain
major mining companies. We will continue to develop these relationships and
explore alternative strategies to maximize the value of this asset in the months
ahead.
*See Exeter's news release
dated April 30, 2008 for further details.
October
2008 - The Financial Crisis
In late October, with $23 million in our treasury, Exeter implemented a
severe cost-cutting program to focus the Company's expenditures on the Cerro
Moro and Caspiche assets. Major staff reductions at all levels were
implemented and a budget adopted that allows for exploration to continue, but
provides for $8 million in our treasury at September 2009. Importantly, the
decision was made to maintain 100% ownership of our core assets, even if that
requires more dramatic cost cutting at a future date.
Exeter's
Strategic Agreements with AngloGold Ashanti and Rio Tinto Mining
Our strategic agreements with Cerro Vangaurdia S.A. (an AngloGold Ashanti
subsidiary) and Rio Tinto Mining and Exploration Limited, over exploration
targets in the Patagonia region of southern Chile and Argentina remain in
good standing. These agreements have led to discoveries, confirmed by
drilling, at Cerro Moro (gold-silver), Cerro Puntudo (gold) and Verde
(silver). Additional
drilling is warranted at both Cerro Puntudo and Verde but remains deferred
due to spending constraints.
Don
Sixto Deposit
The Don Sixto epithermal gold project in Mendoza Province, Argentina is 100%
controlled by Exeter. The property contains NI 43-101 compliant estimated
resources of 925,000 ounces of gold (20.5 million metric tons at a grade of
1.4 grams per tonne) in the measured plus indicated categories, and a further
334,000 ounces of gold (9.3 million metric tons at a grade of 1.1 grams per
tonne) in the inferred resource category, all estimated at a cut-off grade of
0.5 grams per tonne gold. **
The project has now been
"on hold" for 19 months, ever since the provincial government
enacted legislation banning the use, in mining, of certain essential
chemicals (including cyanide). The deposit is low grade, and as a consequence
we currently cannot see a viable processing alternative to overcome this
obstacle. As a result, Exeter and the mining industry in Mendoza continue to
lobby for legislative amendment. In the meantime, Exeter has launched a court
action seeking to have the legislation declared unconstitutional.
GOING FORWARD
Exeter's current plans for
2009 are based entirely on utilizing the staff and funds presently at hand.
Market uncertainty is expected to persist through 2009, although it is likely
that gold will continue to outperform the other metals. We expect that
financing windows will open periodically for those companies that offer significant
investment upside, and are perceived to be acquisition candidates for the
major mining companies. We are of the view that Exeter occupies that niche
and has the advantage of not needing critical funding at this time.
Drilling results from our
Caspiche project suggest that the property represents a major opportunity to
rapidly increase our estimated gold resources to that of a mid-tier mining
company. We have not joint ventured the property, as we have not wanted to
pass the upside of the discovery to another party at a massive discount to
its potential value. In other words, our belief is that the potential reward
for our shareholders from the current exploration drilling far outweighs the
$6 million dollar risk to our treasury.
In last year's letter to
shareholders, we stated that Exeter planned to take its lead property through
to mining at the earliest opportunity, and to have a second project at the
feasibility stage. This continues to be our goal despite these difficult
times.
2009 NEWS FLOW
Quarter
One - 2009
Caspiche Project
- drilling continues and
resource calculations start
- geotechnical logging
continues
- preliminary infrastructure
studies (water and electricity) continue
- metallurgical testing
continues on oxide and sulfide ore types
Cerro Moro Project
- drilling to begin on
Escondida Vein extension target
- resources calculations
continue (to include all veins on the property)
Quarter
Two - 2009
Caspiche Project
- announce NI 43-101 inferred
resource estimate
- continue geotechnical logging
- reports on infrastructure
studies expected
Cerro Moro Project
- announce NI 43-101 resources
estimate
- drilling continues on
Escondida Vein extension target
Quarters
Three and Four - 2009
- prepare for possible fourth
quarter drilling programs at both Caspiche and Cerro Moro
- advance the scoping study for
mine development at Cerro Moro, including the optioning of a second hand
treatment plant
- end quarter three with $8
million plus in treasury
INVESTOR
COMMUNICATIONS
Exeter is now listed on the
New York Stock Exchange's Alternext Exchange under the same symbol XRA. We
see this as a better trading platform than the AMEX, with added market
credibility attached to the NYSE brand. Our listing on the TSX Venture Board
will be maintained.
Exeter attends several conferences
each year, two of which, the Denver Gold Group Conference (Denver (not
confirmed) and Zurich venues) and the BMO Global Metals and Mining
Conference, are restricted to the senior and most advanced of the junior
resource companies. The list below gives the venues and dates for investor
conferences that we generally attend, and we look forward to the opportunity
to meet with you at these venues:
January 25-26
Vancouver, Canada - Cambridge House Investment Conference
February 22-25 Hollywood, Florida - BMO Global Metals and Mining
Conference
March 1-4 Toronto, Canada - Prospectors and Developers Conference
March 20-23 Las Vegas, Nevada - Casey Research Las Vegas Summit
April 27-30 Zurich, Switzerland - Denver Gold Group - European
Gold Forum
May 11-12 New York, USA - Hard Assets Investment Conference
November 21-22 San Francisco, USA - Hard Assets Investment
Conference
THANKS TO OUR
MANAGEMENT AND STAFF
We owe our profound thanks
to our management and staff who have endured the stress and uncertainty of
the last several months. Our decision to reduce staffing was very difficult,
and was by no means a reflection on the loyalty, performance or capabilities
of our employees. It is our sincere hope that we will be able to work with
many of those individuals again in the future.
Yale Simpson
Chairman
|
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 1260, 999 West Hastings St.
Vancouver, BC Canada V6C2W2
exeter@exeterresource.com
|
**The resources are
400,000 ounces of gold (8.2 million tonnes at a grade of 1.5 grams per tonne)
in the measured category and 525,000 ounces of gold (12.3 million tonnes at a
grade of 1.3 grams per tonne) in the indicated category, all estimated at a
cut-off grade of 0.5 grams per tonne. See Exeter's news release dated August
2, 2007 for further details.
Bryce Roxburgh, Exeter's
President and CEO, and a "Qualified Person" within the definition
of that term in National Instrument 43-101 - Standards of Disclosure for
Mineral Projects, is responsible for the technical information contained in
this letter.
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
statements regarding the extent and timing of drilling programs, anticipated
exploration results, the potential size of the Caspiche deposit, the
potential grade and continuity of mineralization, and timing and
establishment of resources estimates. Forward-looking statements involve
known and unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of the Company to vary from any
future results, performance or achievements expressed or implied by the
forward-looking statements. Factors that could cause actual results to differ
materially from the forward-looking statements include, among others, 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 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, 2007, dated March 28, 2008 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. All statements are made as of the
date of this news release and the Company is under no obligation to update or
alter any forward-looking statements except as required under applicable securities
laws.
THE
TSX VENTURE EXCHANGE DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY
OR ACCURACY OF THIS NEWS RELEASE