Exeter completes positive prefeasibility study for its Caspiche oxide gold deposit

Exeter Resource Corporation (TSX:XRC)(NYSE Amex:XRA)(FRANKFURT:EXB) ("Exeter" or the "Company") is pleased to announce the Oxide Gold Prefeasibility Study for its Caspiche Project in northern Chile has returned a NPV(5) of US$329.5 million and net operating costs of US$524/ounce gold. Average annual production over the five year mine life would be 210,000 ounces gold and 364,000 ounces silver.

The Oxide Gold Prefeasibility Study ("PFS"), completed by Jacobs Engineering (formerly AKER Solutions), is based solely on the near surface oxide portion of the Caspiche deposit and considers that deposit as a standalone mine. The +100 metre thick oxide "blanket" will have to be removed from the very large underlying sulphide project and no residual value is attributed to the mine infrastructure and equipment that could be utilised in developing that larger project.

The combined oxide-sulfide deposit is the subject of a much larger pre-feasibility study currently underway and scheduled for release in Q4-2011.

Highlights of the Oxide Standalone PFS

NI 43-101 compliant Proven, and Probable Mineral Reserves for the Caspiche Oxides Project total 1.35 million ounces of gold at an average grade of 0.41 grams per tonne ("g/t") gold and 5.36 million ounces of silver at an average grade of 1.64 g/t silver contained within 101.74 million tonnes of ore. The 43-101 report does not include a further Inferred Resource of 50,000 ounces of gold and 300,000 ounces of silver at average grades of 0.26 g/t and 1.51 g/t respectively, contained within 6.21 million tonnes of ore.

Average annual production is approximately 210,000 ounces gold and 365,000 ounces silver.

Mine life is 5 years.

Average cash operating costs are US$524/ounce gold, after the silver credit.

At US$1,320/ounce gold, using a 5% discount rate, the pre-tax net present value ("NPV"), including the Anglo royalty is US$329.5 million, generating an internal rate of return ("IRR") of 34.4%, and a payback period of 3.2 years from initial construction.

Estimated initial capital costs are US$335.6 million.

Processing throughput is 62,000 tonnes per day ("tpd") of ore.

Average gold recovery is 78%. Average silver recovery is 34%.

Waste to ore ratio is 0.26:1 over the life of mine.

Several opportunities to materially improve project economics, including the supply of power from the grid, were not incorporated into the PFS.

Exeter Chairman Yale Simpson states "the purpose of the Oxide PFS was to demonstrate the commercial viability of the Caspiche oxide deposit as a relatively low capital cost, low risk mine producing over 200,000 ounces gold annually. The study assumes a standalone project, quite independent of the development of the large Caspiche sulfide deposit.

"The oxide ore body leaches exceptionally well by industry standards and will be an important cash flow generator, whether it is developed independently to provide cash flow over a five year mine life, or in concert with the development of the main sulfide deposit. Our engineers advised that an increase in the size of the secondary crusher could increase mine throughput (and shorten mine life) at a relatively modest increase in the mine capex.

"On the basis of the economics set out in the PFS report, the Company can now consider mine permitting and development of the oxide project well in advance of the larger scale and more capital intensive sulfide project."

Read the full news release here.