LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page >> News >> Story  Disclaimer 
Latest Headlines to Launch New Website

Is Gold Price Action Warning Of Imminent Monetary Collapse Part 2?
By: Hubert Moolman

Gold and Silver Are Just Getting Started
By: Frank Holmes, US Funds

Silver Makes High Wave Candle at Target – Here’s What to Expect…
By: Clive Maund

Gold Blows Through Upside Resistance - The Chase Is On
By: Avi Gilburt

U.S. Mint To Reduce Gold & Silver Eagle Production Over The Next 12-18 Months
By: Steve St. Angelo, SRSrocco Report

Gold's sharp rise throws Financial Times into an erroneous sulk
By: Chris Powell, GATA

Precious Metals Update Video: Gold's unusual strength
By: Ira Epstein

Asian Metals Market Update: July-29-2020
By: Chintan Karnani, Insignia Consultants

Gold's rise is a 'mystery' because journalism always fails to pursue it
By: Chris Powell, GATA


GoldSeek Web

Peter Spina, Founder, Gold Seek LLC><center><font color= Exeter Resource - The New Caspiche

By: Peter Spina, Founder

 -- Published: Thursday, 26 February 2015 | Print  | Disqus 

Deep in Chile’s Atacama Desert sits one of the more prolific mineral formations in the world – the Maricunga metallogenic belt. Majors like Barrick, Teck, Kinross, Goldcorp, and Hochschild all have big mines here, and so too does Exeter Resources (NYSE: XRA | TSX:  XRC), a $44-million market cap junior sitting on a 40-million-oz. AuEq deposit.


The Caspiche Project is located in the Maricunga Belt of Chile.


Exeter’s Caspiche project, a gold-copper porphyry with an oxide cap, has several advantages. There’s easy road access in the dry, treeless landscape with the mining hub of Copiapo sitting 185 km away; grid power runs just 12 km from the site at Kinross’ Maricunga mine; and Chile as a jurisdiction consistently ranks high for mine policies and predictability.


The catch is that Atacama is not simply a desert, but the driest place on earth outside of Antarctica, leaving little water to operate the many big deposits in the area.  


Exeter is well aware of the challenge, and has spent the past two years re-working its Caspiche project to need less water — and less capital — while also scouring the region for a suitable water source. The company says it is closing in on just such a source, which, combined with the completely re-worked mine plan released last year, is creating a new and  very promising picture for the company.


A giant is discovered


Exeter took an option on the dormant Caspiche project in 2005 and discovered the true potential of the project less than two years later when it punched through to the underlying porphyry. The company started pulling intercepts like 793 meters grading 0.96 g/t Au and 0.4% Cu and 1,234 meters carrying 0.89 g/t Au and 0.33% Cu.



The deposit, and Exeter, kept growing just as the resource sector was recovering from 2008. By early 2010 the company had moved to the main board of the TSX and was gracing $9 a share. And by early 2012 the company had a prefeasibility study out that had established reserves of 19.3 million oz. gold and 4.6 billion lbs. copper, at grades of 0.58 g/t Au and 0.24% Cu in the sulphides, and lower in the oxides.


But by then the appetite for megaprojects was waning, and Caspiche, with a capex of $4.8 billion, certainly fit into that category. To make the trend especially clear, Exeter would soon see Barrick halt development at it and Kinross Gold’ Cerro Casale project, sitting just 10 km south of Caspiche, after capital costs ballooned from $4.3 billion in early 2010 to $6 billion by mid-2011.


In response Exeter looked to Kinross’ Maricunga mine, a more nimble heap-leach operation 15 km north, for inspiration instead, and went back to the planning stage.


The New Caspiche


Exeter announced its new vision for Caspiche in May 2014, setting out three development options in a new preliminary economic assessment.


Option one is a standalone 30,000-tonne-per-day (tpd) heap leach oxide gold project that could produce about 122,000 AuEq oz. a year for 10 years.


Option two is scaled-up 60,000 tpd heap leach mine, transitioning into a 27,000 tpd open pit to mine the higher-grade gold-copper sulphides. Under this plan the mine would produce about 289,000 AuEq oz. a year for 18 years.


Finally option three outlines a similar 60,000 tpd heap leach mine, but then transitions into underground open stope mining. This plan sees varied production rates, averaging 250,000 oz. gold in the first three years and 425,000 AuEq oz. in years 4-13, while the overall average rate is 344,000 AuEq oz. over 42 years.


The new plans are also based on somewhat revised resources, with an oxide measured and indicated resource of 121.5 million tonnes grading 0.43 g/t Au and 1.58 g/t Ag for 1.7 million AuEq oz. at a 0.18 g/t AuEq cutoff., and a sulphide resource of 1.4 billion tonnes grading 0.51 g/t Au, 0.19% Cu, and 1.2 g/t Ag for 39.6 million AuEq ounces at a 0.30 g/t AuEq cutoff.


All three plans take advantage of the large, flat-lying oxide gold cap of the deposit. All of the copper has leached from this oxide zone, so it’s well-suited to heap leaching, and being so near-surface means the waste to ore ratio is an attractive 0.27:1.


Wendell Zerb, who came on as president and CEO of Exeter in early 2013 and has lead the re-imagining of Caspiche, says the heap leaching will be a great lead-in to any of the project options.


“These new studies confirm the development optionality at Caspiche and the economic strength of the numerous lower capex mining options available. Our standalone surface oxide gold zone with very little waste rock and relatively rapid gold recovery characteristics is a logical first step in each development option.”


The heap leap option could become even more attractive, with detailed metallurgical results released after the study was finished showing better-than-expected recoveries in the early years of production. The results, released in November, show extraction rates of 93% in the first two years of operation, and 87.7% in years three and four, which also correspond to the years that the highest grades would be processed. The higher recoveries could lead to quicker capital payback and improve the overall financials of the project.


Capital costs for the three projects vary quite a bit, but thanks to the heap leach component all allow for manageable initial costs and for cash flow from the oxide zone to finance additional capital requirement as the project expands.


For heap leaching alone, the mine would initially cost an estimated $251 million, while the other two options call for around $380 million in initial costs and then $926 million in sustaining costs for the open pit sulphide mine and $1.58 billion in sustaining costs of the underground option.


As to the potential after-tax (27%) profitability of the plans, option one has an IRR of 28.5% and a NPV of $252 million, option two has an IRR of 21.1% and NPV of $656 million, and option three has an IRR of 16.7% and $1.14 billion, all at a 5% discount rate and based on US$1,300/oz. gold and $3/lb. copper. Payback ranges from 3.4 years to 7.7 years in the plans.


Commenting on the new plan, Exeter co-chairman Yale Simpson stated “Our ability in today’s market to focus on advancing the 1.7 million ounce gold oxide open pit is sensible and achievable. Importantly for shareholders, with future elevated gold and copper markets, we believe the value of the very large Caspiche gold-copper inventory will be a strong value driver for Exeter. Caspiche is unique, representing one of only a few scalable development projects that is not yet controlled by a major company.”  


Quenching Caspiche’s thirst


Drafting plans that reduce upfront capex has been important for Exeter, but even more importantly the new plans all significantly reduce water needs for the mine.


The old mine plan needed about 1,000 liters a second (l/s), no small amount deep in the desert. The new heap leach plan, however, requires less than 5% of that at 44 l/s, while the sulphide mine would need between 150 and 185 l/s.



Those are much more manageable numbers, but Exeter has yet to secure any water in the district. The majors who have set up shop in the area have all made sourcing water a priority, leaving few promising tenements left in the area.


But in 2013 Exeter struck a deal with Atacama Pacific Gold to earn 90% of several potential water concessions about 120km northeast of Caspiche, and last year made significant progress on proving up a viable water supply there.


From preliminary results Exeter believes its Peñas Blancas water tenement has the potential to provide sustainable water flows of over 200 l/s, which would be enough to run any of the three new mine plans.


So far the company has drilled five large diameter water bore holes and two smaller monitoring holes at its Peñas Blancas concession, and is currently working on more definitive measurements of flow and recharge rates that could confirm Exeter has secured a water source for Caspiche.


Back on track


With Exeter tackling its capex and water issues, the company is looking to be much more attractive than it did two years ago. The company now appears to have numerous options to advance Caspiche, which still includes attracting a mid-cap or   major to take on a large portion of Caspiche or outright buy the Company.


Fortunately Exeter is well-positioned to continue to advance the new vision for the project while it assesses its development options or it attracts a buyer. The company had about C$30 million in cash at the end of 2014 with no loans or bank debts. It also only has about 88.4 million shares out, which at the roughly $0.50 it has been trading, makes for a market cap of a little over $44 million. That makes for a fairly easy acquisition for a major looking to add a potential 40 million AuEq oz. deposit to its reserves.


There’s no telling when project buyouts might pick up, but with Exeter’s low valuation compared with its resource, and the company taking the key steps needed to de-risk the project, it could become an acquisition target for range of mid cap or major mining companies.


-          Peter Spina



Exeter Resource Corp.



Shares outstanding

88.4 million

Options outstanding

8.2 million

Market capitalization

$45 million


C$29 million

Debt or hedges


Insider ownership





Legal Notice / Disclaimer: This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment., have based this document on information obtained from sources it believes to be reliable but which it has not independently verified; makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of only and are subject to change without notice. assume no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, we assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information, provided within this Report.


Additional Disclosure: The owner, editor, writer and publisher and their associates are not responsible for errors or omissions. The author of this report is not a registered financial advisor. Readers should not view this material as offering investment related advice. Authors have taken precautions to ensure accuracy of information provided. Information collected and presented are from what is perceived as reliable sources, but since the information source(s) are beyond our control, no representation or guarantee is made that it is complete or accurate. The reader accepts information on the condition that errors or omissions shall not be made the basis for any claim, demand or cause for action. Past results are not necessarily indicative of future results. Any statements non-factual in nature constitute only current opinions, which are subject to change. The information presented in stock reports are not a specific buy or sell recommendation and is presented solely for informational purposes only. The author/publisher may or may not have a position in the securities and/or options relating thereto, & may make purchases and/or sales of these securities relating thereto from time to time in the open market or otherwise outside of the trading timeframe listed above. Nothing contained herein constitutes a representation by the publisher, nor a solicitation for the purchase or sale of securities & therefore information, nor opinions expressed, shall be construed as a solicitation to buy or sell any stock, futures or options contract mentioned herein. The companies mentioned herein may be sponsor of Investors are advised to obtain the advice of a qualified financial & investment advisor before entering any financial transaction.

| Digg This Article
 -- Published: Thursday, 26 February 2015 | E-Mail  | Print  | Source:

comments powered by Disqus
Sign-Up for Free E-mail list: Peter Spina

Peter Spina's experience with the precious metal markets started back in the mid-1990s, which led to the creation of back in 1995. Today ranks in the top three most popular global gold websites and its sister site, ranks as the most visited silver website in the world. Back at the start of the new secular precious metals bull market, Peter established the technically-focused subscription newsletter, Gold Seeker Report, which at the start of 2005 was merged into the more comprehensive Gold Forecaster ( service. In addition to the newsletter and websites, Peter frequently appears in the media including MarketWatch, Reuters, and


Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to >> Story

E-mail Page  | Print  | Disclaimer 

© 1995 - 2019 Supports

©, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer


The views contained here may not represent the views of, Gold Seek LLC, its affiliates or advertisers., Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of, Gold Seek LLC, is strictly prohibited. In no event shall, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.