Argentina approves Extorre’s EIA for Cerro Moro

The provincial government of Santa Cruz in southern Argentina has approved the environmental impact assessment of the proposed Cerro Moro mine, Extorre Gold Mines (XG-T, XG-X) reports, and the results of a prefeasibility study are expected in June.

In other news Extorre has acquired the 14,000-hectare ranch that covers the principal vein zones at the project, which will give the company full ownership of the surface rights covering the Escondida, Zoe, Loma Escondida, Esperanza and Babriela zones. It also covers the area that Extorre has chosen to build processing facilities and infrastructure for a mine.

Eric Roth, the company’s president and chief executive, noted that the deposit’s “very high-grade” gold-silver veins should allow Extorre to “obtain near term, low cash-cost gold-silver production from a relatively modest capital investment.”

According to the preliminary economic assessment in October 2010, project capex is estimated at US$131 million (of which 21% is a VAT that is refundable after production starts). The PEA also outlined average annual production in the first five years of operation of 133,500 gold equivalent ounces at cash costs of US$201 per oz. Project economics were calculated using a gold price of US$950 per oz. and a silver price of US$16 per oz.

Currently four drill rigs are active at Cerro Moro.

At presstime the company held $28 million in cash and was trading in Toronto at $9.25 per share. Over the last year the junior has traded between a low of $2.41 per share (July 9 2010) and a high of $10.03 per share (May 10 2011). Extorre has about 87.6 million shares outstanding.