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Exeter Provides Update on Proposed Spin-Out to Create Two Independent Companies
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Exeter Provides Update on Proposed Spin-Out to Create Two
Independent Companies
Restructuring to Unlock the Value of the
High Grade Cerro Moro Gold-Silver Project in Argentina
Vancouver, February 18, 2010 – Exeter Resource Corporation (NYSE
-AMEX: XRA, TSX: XRC, and Frankfurt: EXB) ("Exeter" or the
"Company") has mailed a detailed information circular (the
"Circular") describing the business to be conducted at its
special meeting of shareholders to be held March 11, 2010 at 3
:00 pm at the Companys offices in Vancouver, British Columbia
with respect to the spin-out of its Argentine assets into
Extorre Gold Mines Limited ("Extorre") by plan of arrangement
(the "Arrangement").
Upon successful completion of the Arrangement Extorre will hold
all of the Companys interest in its Cerro Moro and Don Sixto
properties located in Argentina and will focus on the
development of the Cerro Moro Project.
Exeter will continue to
hold and focus on advancing its Caspiche Project, located in
northern Chile.
Detailed information respecting the matters
contemplated by the Arrangement is set out in the Circular and
documents incorporated by reference therein.
At the meeting the Company will seek 66 2/3% shareholder approval
of a resolution on the spinout whereby each Exeter shareholder
on the distribution date (the "Distribution Date") of the
transaction, which will be fixed following receipt of the final
order from the Supreme Court of British Columbia (the "Final
Order") and announced by news release, will receive one share in
Extorre for each share held in Exeter on the Distribution Date.
There will be no change in shareholders holdings in Exeter.
Two
trading days prior to the Distribution Date Exeter shares will
trade "ex-distribution" and the shares of Extorre will trade on
a "when issued" basis.
On the Distribution Date registered Exeter shareholders who do
not dissent to the resolution will be deemed to have exchanged
without any action on their part each of their Exeter shares on
the basis of one new Exeter share and one new Extorre share.
No
new share certificate will be issued for the Exeter shares and
existing Exeter share certificates will be deemed to be share
certificates representing the new Exeter shares.
Exeter
shareholders who hold their Exeter shares in their brokerage
accounts, including discount brokerage accounts, will have their
Extorre shares automatically deposited into their accounts by
their broker upon completion of the Arrangement.
The accounts of non-dissenting Exeter shareholders of record on
the Distribution Date will be credited with the Extorre shares
to which they are entitled.
Following approval of the Arrangement, Exeter shareholders of
record on the Distribution Date do not need to do anything
further in order to receive their Extorre shares, which will be
delivered as soon as possible after the Distribution Date.
Certificates representing Exeter shares are not being exchanged
pursuant to the transaction and will continue to represent the
new Exeter shares.
Subject to receipt of all required consents and approvals,
including Exeter shareholder approval, receipt the Final Order,
Toronto Stock Exchange ("TSX") and NYSE-Amex approval and
satisfaction of certain closing conditions, the Arrangement is
expected to close on or about March 12, 2010.
It is a condition
precedent to the completion of the Arrangement that Extorre
shares be conditionally approved for listing on the TSX.
Application has been made to list Extorre on the TSX.
Listing is
subject to Extorre meeting the original listing requirements of
the TSX, receiving TSX approval and meeting all conditions of
listing imposed by the TSX.
For US shareholders, Extorre intends to initially apply for
listing on the OTCQX exchange.
Listing is subject to Extorre
meeting all listing requirements of the OTCQX and receiving
OTCQX approval.
Please refer to the Exeter press release dated January 19, 2010
and the Circular for more detailed information, available on
SEDAR at www.sedar.com.
About Exeter
Exeter is a Canadian mineral exploration company focused on the
discovery and development of gold and silver properties in South
America.
The Company has C$72 million in its treasury.
On
January 19, 2010 the Board approved the Arrangement pursuant to
which the assets of Exeter would be separated into two highly
focused companies.
On the Caspiche Project in Chile an inferred mineral resource
estimate of 1,117 Mt (million metric tons) at a grade of 0.55
grams per metric ton gold and 1.12 grams per metric ton silver
including 1,017 Mt at a grade of 0.22% copper was announced in
September 2009.
This equates to in-situ inferred resources of 19
.6 million ounces of gold, 40 million ounces of silver and 4.84
billion pounds of copper (a total of 32.4 million gold
equivalent ounces*).
Drilling with six rigs is underway to
expand and upgrade the resource.
On the Cerro Moro Project in Argentina an initial inferred
mineral resource estimate of 646,000 ounces gold equivalent** at
a grade of 18 g/t gold equivalent** was announced mid-2009.
A
new Cerro Moro resource estimate is scheduled for April 2010, to
be followed by a Preliminary Assessment Study of potential
project economics and mine planning.
These studies will form the
basis of a mine development decision and the submission of the
project to Provincial authorities for permitting.
Exploration
drilling will continue through 2010.
No site work is currently planned on the Don Sixto gold-silver
project in Argentina.
The Company will continue to work with
provincial authorities and with representatives of other mining
companies, to effect amendment to the 2007 legislation that
banned the use of cyanide in mining operations in Mendoza
Province.
Matthew Williams, Exeters Exploration Manager and Justin Tolman,
Exeters Caspiche Project Manager both considered 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.
You are invited to visit the Exeter web site at www
.exeterresource.com
EXETER RESOURCE CORPORATION
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 V6C 2W2
[]
*Gold ("Au") equivalence for copper ("Cu") and silver ("Ag") was
calculated by Exeter using assumed metal prices of US$800/ounce
("oz") for Au, US$12/oz for Ag and US$2/pound ("lb") for Cu.
The
formula to calculate Au equivalence for Cu was pounds of Cu
multiplied by 2 and divided by 800; Au equivalence for Ag was
calculated using the formula oz of Ag multiplied by 12 and
divided by 800, and in both cases assumes 100% recovery.
Reported grades and metric tons have been rounded (see news
release NR 9-22 dated October 20, 2009).
**Inferred mineral resource estimate of 1,098 Mt containing 371
,000 ounces gold at a grade of 10.5 g/t and 19.2 million ounces
silver at a grade of 545 g/t for 646,000 ounces gold equivalent
at a grade of 18 g/t gold equivalent.
Gold equivalent is
calculated by dividing the silver assay result by 70, adding it
to the gold value and assuming 100% metallurgical recovery (see
news release NR 9-14 dated July 8, 2009).
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 the Company
s belief as to the extent and timing of its drilling programs,
various studies including engineering, environmental,
infrastructure and other studies, and exploration results,
budgets for its exploration programs, the potential tonnage,
grades and content of deposits, timing, establishment and extent
of resources estimates, potential for financing its activities,
potential production from and viability of its properties,
expected cash reserves and the expected benefits of the proposed
spin-out transaction.
These forward-looking statements are made
as of the date of this news release.
Users of forward-looking
statements are cautioned that actual results may vary from the
forward-looking statements contained herein.
While the Company
has based these forward-looking statements on its expectations
about future events as at the date that such statements were
prepared, the statements are not a guarantee of the Companys
future performance and are subject to risks, uncertainties,
assumptions and other factors which could cause actual results
to differ materially from future results expressed or implied by
such forward-looking statements.
Such factors and assumptions
include, amongst others, the effects of general economic
conditions, the price of gold, silver and copper, changing
foreign exchange rates and actions by government authorities,
uncertainties associated with legal proceedings and negotiations
and misjudgements in the course of preparing forward-looking
information.
In addition, there are also known and unknown risk
factors which could cause the Companys 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 officers, directors or promoters of the
Company with certain other projects; the absence of dividends;
currency fluctuations; competition; dilution; the volatility of
the Companys common share price and volume; tax consequences to
U.S.
investors; and other risks and uncertainties, including
those described in the Companys Annual Information Form for the
financial year ended December 31, 2008, dated March 27, 2009
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.
The Company is 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 the securities laws in
effect in Canada, which differ from the requirements of United
States securities laws.
Unless otherwise indicated, all mineral
resource estimates included herein or incorporated by reference
herein have been prepared in accordance with NI 43-101 and the
Canadian Institute of Mining and Metallurgy Classification
System.
NI 43-101 requires issuers to file technical reports at
certain times under a prescribed format.
Canadian standards
differ significantly from the requirements of the SEC; mineral
resource information contained herein or incorporated by
reference herein may not be comparable to similar information
disclosed by U.S.
companies.
In particular, and without limiting
the generality of the foregoing, the term "resource" does not
equate to the term "reserve".
The SECs 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 U.S.
standards in documents filed with the SEC,
unless such information is required to be disclosed by the law
of the Companys 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.
NEITHER THE TSX NOR ITS REGULATION SERVICES PROVIDER (AS THAT
TERM IS DEFINED IN THE POLICIES OF THE TSX EXCHANGE) ACCEPTS
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS NEWS RELEASE
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