Patagonia Cerro Puntudo | Exeter Resource

PROJECTS - Patagonia

Cerro Puntudo

The Cerro Puntudo Project is located some 250 kilometres west of Cerro Moro Project in Santa Cruz Province in Patagonia.

Geology and Mineralisation

The property is underlain by Jurassic age volcanics of the Bahia Laura Gp including variably welded rhyolitic tuffs, rhyolite flows and local vitrophyres of the Chon Aike Fm and minor air fall tuffs. In the north part of the area and forming the peak of Cerro Puntudo is a heterolithic breccia unit, interpreted by Mincorp geologists to be of diatreme origin. Principal structural trends on the property are NW and NE.

The gold mineralized zone at Cerro Puntudo forms a prominent elongate zone trending WNW as an annular structure rimming a rhyolitic flow dome, and extending in a south easterly direction for some six kilometres. The flow dome is interpreted to have formed on the northern margin of a large volcanic caldera.

Where it crops out, this favourable breccia structure varies from a few metres wide, to approximately 20 metres wide at La Quebrada and Rico Sectors to 200 metres wide at Puntudo Sector where it may be represented as a diatreme. Hydrothermal breccias have a matrix of iron oxide and silica comprising at least five separate stages of silicification.

Exploration

Exploration has been conducted by both CVSA and Exeter. Exeter's work has included detailed mapping, induced polarization surveying, ground magnetics and drilling.

Gradient Array Resistivity

Exeter have collected a total of 375 composite rock chip samples, each covering an area of about 3 to 10 square metres, and channel rock chip sampling.

Exeter composite rock chip channel sample across the Quebrada Sector gave 25 metres @ 1.7 g/t Au, 127 g/t Ag, and 2.4% Pb. These results confirm CVSA rock chip channel sampling, which had yielded 26.5 metres grading 1.9 g/t gold. Two separate composite rock chip channel samples, taken at the Quebrada North prospect gave 2.5 metres @ 74 g/t Au and 192 g/t Ag and 2 metres @ 8.1 g/t Au.

Exeter also confirmed results from the Rico Sector, located approximately two kilometres northwest of the Quebrada zone. Sampling by CVSA had returned 21 metres grading 3.5 g/t gold and Exeter sampling gave 5 metres grading 31 g/t gold and 29g/t silver. A separate rock chip channel sample by Exeter at Rico gave 14 metres @ 2.0 g/t.

A third zone, the Puntudo zone, located 900 metres to the northwest of the Rico zone is a large area of breccia, now considered a sinter zone. Initially a total of 28 large composite samples, collected by CVSA and Exeter over an area of 10,000 square metres in the Puntudo zone, averaged 0.5 g/t gold. Follow-up composite rock chip and rock chip channel sampling has confirmed values to be less than 1.0 g/t Au with a single sample returning 24 g/t Au.

Channel sampling by Exeter discovered a new zone of silicification ("Quebrada South"), 1.6 kilometres southeast of La Quebrada Sector, that returned 1.2 g/t gold, 57 g/t silver and 0.15% lead over a width of 4.5 metres.

Outside of the main mineralized structure, Exeter discovered further mineralization consisting of silica veining in rhyolitic volcanics. Individual samples returning assay values up to 17 g/t gold. This new zone is some 2 kilometres south of the Puntudo zone.

Drilling Results

Follow-up drilling over the 4 kilometre long Puntudo structure was completed in May 2005, comprising 21 reverse circulation percussion drill holes for a total of 1,719 metres, with down hole depths varying from 36 to 140 metres. This programme was to further test significant auriferous intersections highlighted in the December 2004 and January 2005 drilling, where previously best results received included; 20 metres at a grade of 3.6 g/t gold, including 4 metres at a grade of 9.2g/t gold intersected in CPRC24 and 20 metres at a grade of 3.7 g/t gold, including 8 metres at a grade of 9.6g/t gold intersected in CPRC27. New high grade intersections include; 2 metres at a grade of 12.1 g/t gold intersected in CPRC43 as displayed on the following cross section

And 2 metres at a grade of 42 g/t gold intersected in CPRC50 as displayed on the following cross section:

Following the successful second tier drilling at the Rico prospect deeper drilling was performed to test the mineralisation at greater depths, where CPRC41 intersected significant mineralisation as displayed in the following cross section, which has assisted in the interpretation of southeast plunging ore shoots, as discussed further below.

The Puntudo structural zone has now been tested by a total of 55 reverse circulation percussion drill holes for a total of 3898 metres. Interpretation of all data now suggests that it would appear that targets for high grade mineralisation are located within broad zones of low grade mineralisation. In particular, high grade gold intercepts appear to relate to southeast plunging ore shoots within the Puntudo structural corridor, as displayed on the following long section:

All assays quoted above were calculated at a 0.5 g/t gold cut-off with no cutting of high grades.

All drill holes were sampled on site at one or three metre intervals. The samples were prepared at the ALS Chemex preparation facility in Mendoza and assayed for gold by fire assay (50 g charge, 1ppb Au detection limit) and silver by AAS at the ALS Chemex laboratory in La Serena, Chile. Check assaying by ALS Chemex on the 46 samples assaying greater than 1.0 g/t gold indicated good reliability of gold results. As a further check, one in 20 samples was either assayed in duplicate, or was a standard or a blank sample. All samples with gold values greater than 10 g/t gold will be screen fire assayed.

Shallow holes around the Puntudo volcanic sinter have offered sufficient encouragement to drill test high angle, potentially mineralised feeder structures associated with the volcanic sinter.

Detailed results for the two campaigns are given in the News Releases dated February 24, 2005 and August 10, 2005.

Exeter will now complete detailed structural mapping over the entire Puntudo structure (in October 2005) in order to better define the gold targets for further drilling.