Cerro Moro gold/silver project pre-feas initiated by Extorre

Extorre Gold Mines (TSX:XG, FSX: E1R, OTC: EXGMF) said Wednesday it has hired GR Engineering Services to conduct a pre-feasibility study on its Cerro Moro gold-silver project in Santa Cruz, Argentina, expected to be completed by the second quarter of next year.

The company said the study will consider the development of an 8 year, 750 tonne/day mine producing 133,500 ounces of gold equivalent annually for the first 5 years.

"The level of engineering requested by Extorre is to a level that will enable the project to proceed directly to a construction decision and detailed engineering," said Extorre CEO Eric Roth.

"As Extorre has already submitted an Environmental Impact Assessment report to Provincial authorities, the Board is optimistic that a decision to proceed with commercial development could be made by June 30, 2011."

Extorre said it remains committed to an aggressive discovery drilling program through 2011 and 2012, which, it is hoped, will increase the resource base, bringing the added resources into consideration in the current mining plan.

The pre-feasibility study follows the preliminary economic assessment of the project, released in October, which indicated the potential for a low cost open pit/underground gold-silver mine. The initial Capex was estimated at US$131 million, with an after-tax IRR of 43.4%.

Article published courtesy of Proactive Investors