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Caspiche Pre-Feasibility Study Update - July 2011

1. Mining and Infrastructure

In Pit Crushing and Conveying (IPCC) Study to be advanced to Pre-Feasibility levels

Similar to other large throughput operations Exeter has been researching the option of using high

capacity crushers and conveyors to move waste from the proposed pit to a dedicated waste dump. This

has the advantage of reducing the size of the mine truck fleet and associated operating costs and can

assist in power generation from downhill laden conveyors. In June Exeter completed a scoping level

study considering two 21,000tph conveyors and associated crushing and spreading systems for use in

the large Super Pit mining operations. This scoping study showed that this style of system couldaccommodate over 95% of the mine waste rock and indicated an average operating cost reduction in

the order of $0.30/t of waste processed compared to trucking. The overall capital expenditure (including

replacement capital) remained comparable to the trucking case. Following the positive scoping study

results, Exeter has approved the inclusion of IPCC units in the project PFS for waste handling, and in

conjunction with Sandvik has begun the associated engineering studies to develop this concept to a

PFS level of confidence and accuracy.

Additional synergies with potential to contribute further savings are also being investigated including the

possibility of using the proposed IPCC system to crush and move oxide ore early in the project life

and/or support movement of sulphide ore located near the bottom of the proposed pit later in the project

life as the stripping ratio and waste tonnage decreases.

2. Processing

Encouraging results from Heap Leaching testwork on the MacNeill zone

A first pass metallurgical test program at McClelland Laboratories on the gold rich, copper poor MacNeill

zone located to the west of the Caspiche porphyry mineralization has returned encouraging results

showing amenability to leaching with relatively fast leach kinetics. Leaching this material may improve

the profitability for this section of the resource and in some cases permit inclusion of material not

considered as appropriate for conventional flotation because of the very low copper grade. Initial

indications are that it may be both possible and preferable to heap leach as much as 100Mt of this

material. As such the leach pad size has been increased in the PFS to accommodate this material.

Follow-up column leach testwork has already begun at McClelland on whole drill core, specifically

directed to provide support to the initial test results.

The encouraging MacNeill results prompted a search for similar mineralized, but copper-poor, material

that could perform in a similar way. Several zones were identified and preliminary testwork will soon

begin on selected samples to investigate whether this material is better treated by leaching.

HPGR Testwork commenced

The Company has commenced work to investigate the possible use of High Pressure Grinding Rolls(HPGR), a crushing and grinding alternative that has the potential to reduce power consump tion and

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perhaps improve mineral liberation and metal recovery. Tonnage samples from two dedicated

metallurgical drill holes have been provided to SGS Lakefield (Ontario) to conduct a conventional

characterization of ore hardness, grindability and abrasive character and to compare this with results

from a pilot scale HPGR installation. The program will not only deliver a comparison of power

consumption but also flotation performance on material ground by the two alternative approaches.

Concentrate Treatment

Pilot plant testwork has confirmed that arsenic may be successfully removed from the

concentrate by both roasting and pressure oxidation (which produces the final metal products).

Studies are now focused on bringing the capital and operating costs for these options to pre-

feasibility levels. The study is looking at development of this infrastructure at lower altitudes

closer to a permanent workforce, supplies and markets.