Extorre Gold Mines announced in early April 2012 the results of preliminary economic assessment (PEA) No. 3 for its Cerro Moro gold-silver project in Santa Cruz province, southern Argentina. The PEA considered mine production scenarios ranging from 1,000 to 1,500 mt/d. A 1,300-mt/d scenario was selected as the preferred scenario and is the basis for the information reported here.

At the 1,300-mt/d mining rate, Cerro Moro precious metal production over a nine-year mine life is estimated at 848,000 oz of gold and 47.2 million oz of silver, for a total gold equivalent production of 1.79 million oz. Gold contributes approximately 48% of the projected revenue stream, and silver contributes approximately 52%. During the first five years of operations, gold equivalent production would average 248,000 oz/y. The economic modeling used base-case metal price assumptions of $1,320/oz for gold and $26/oz for silver.

The Cerro Moro PEA contemplates a combination of approximately 43% open-pit and 57% underground mining. Mine-site cash costs during the first five years are estimated at $304/oz on a gold equivalent basis. Initial capital expenditures are estimated at $284 million, including refundable VAT.

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