InsideMetals Newsletter - 11/16/2009 | Volume 4, Number 21 - Precious Metals Market Trends, Geopolitical View, Gold Producer News and Website Updates

October 27, 2009: Eldorado Gold Corp. (EGO) announced that it has compiled a new mineral resource estimate for its Kisladag mine in Turkey. The new resource is a 32% increase in measured and indicated ounces over the 2008 estimate. The new measured and indicated resource reflects 459.1 million tons of ore grading 0.023 oz/ton gold, which contains 10.38 million ounces of gold. Kisladag also contains an inferred resource of 200.8 million tons of ore, which grades 0.015 oz/ton gold and contains 2.95 million ounces of gold.

October 27, 2009: Kinross Gold Corp. (KGC) lowered its full year 2009 production guidance and raised its forecast for costs of sales. The revised outlook is due partly to a slower than expected ramp-up at its Paracatu mine in Brazil. KGC now expects it will produce 2.2 million gold-equivalent ounces at an average cost of sales per ounce of $425 to $450 per ounce, down from an earlier 2009 production forecast of 2.5 million gold-equivalent ounces at a cost of $390 to $420 per ounce. KGC expects an average cost of sales per ounce of $700 to $735 at Paracatu, which will produce 340,000 to 360,000 ounces in 2009.

October 28, 2009: Agnico-Eagle Mines Ltd. (AEM) reported a net earnings loss of $16.966 million in the third quarter, compared to $14.038 million in the year-earlier quarter. Third quarter 2009 results include a non-cash foreign currency translation loss of $22.9 million, as well as stock option expenses of $5.1 million. The impact of significantly higher gold production, compared to the third quarter of 2008, was more than offset by changes in working capital related to a build-up of materials and supplies for Meadowbank, to cover summer freight charges for the shipping season to support mine start up in the first quarter of 2010. Gold production in the third quarter was 118,763 ounces at a total cash cost of $449 per ounce. This compares to gold production of 68,753 ounces in the year-earlier quarter at a total cash cost of $135 per ounce. The increase in production is attributable to significantly higher production from Goldex, as well as production from Lapa, Kittila, and Pinos Altos, which were not in production in the third quarter of 2008. Higher cash costs are largely due to a stronger Canadian dollar, and the impact of start-up/optimization, and the lack of byproduct metals in some of these mines. Full year production is now expected to be approximately 500,000 ounces. Full year guidance for 2010 is now 1.0 to 1.2 million ounces. Refer to the press release for details on development on exploration, development, and operations.

October 29, 2009: Compania de Minas Buenaventura SA (BVN) reported that its third quarter 2009 net profit rose 48% over the year-earlier quarter to $148.5 million from $100.8 million as a result of higher gold sales and from contributions from mines it doesn't operate. Total revenue in the quarter rose by 11% to $230.9 million, on production of 346,128 ounces of gold. BVN realized $968 per ounce of gold sold. Silver prices increased by 2%, while copper prices declined by 22%. Silver production declined 4% to 3,519,000 ounces while copper production declined 5% to 16,666 tons. Lead and zinc production declined 22% and 3% respectively.

October 29, 2009: Gold Fields Ltd. (GFI) announced that it may build another gold mine in the Andes. The Chucapaca deposit is located in southern Peru, and is at an advanced stage of drilling. GFI hopes to complete a scoping study on the project by June 2010. Chucapaca is a 51:49 joint venture with Peruvian miner Compania de Minas Buenaventura SA Earlier in the year GFI commissioned its Cerro Corona gold mine in northern Peru.

October 29, 2009: Barrick Gold Corp. (ABX). CEO Aaron Regent reported that ABX has decided not to develop the Sedibelo platinum project in South Africa. ABX believes the required funds can be better spent on other assets. A completed, May 2008 bankable feasibility study on the project was positive, however declining platinum group metal prices in the second half of 2008 and a thorough review of project alternatives indicated declining project economics, as the first phase of project construction would require commitments of more than $400 million plus a $106 million payment. ABX recorded an impairment charge of $158 million related to the project in the third quarter. If ABX does not announce a decision to develop the project by the end of the fourth quarter, the partner will have 90 days to buy ABX's 10% by reimbursing ABX for exploration expenses and the cost of compiling the feasibility study.

October 29, 2009: Eldorado Gold Corp. (EGO) reported net income of $30.2 million and cash flow from operations of $27.6 million for the third quarter which ended September 30, 2009. EGO produced 88,918 ounces of gold in the quarter at an average cash cost of $297 per ounce from its Kisladag mine in Turkey and its Tanjianshan mine in China. EGO sold 85,246 ounces of gold at an average realized price of $957 per ounce. EGO maintains its 2009 production guidance of 230,000 to 240,000 ounces. Refer to the press release for details on operations, development, and exploration in China and Turkey.

October 29, 2009: Gold Fields Ltd. (GFI) announced net earnings of $129 million for the quarter ended September 30, 2009, compared with a loss of $29 million and net earnings of $5 million for the June 2009 and the September 2008 quarters respectively. Attributable gold production for the quarter was 906,000 ounces, which was in line with the previous quarter. Total cash cost of production increased 5% from $512 per ounce to $586 per ounce. Exploration expenditures decreased from $20 million in the June quarter to $17 million in the September quarter as a result of less drilling activity because of the stronger rand. GFI expects to increase production to 925,000 ounces in the December quarter. Refer to the press release for financial, operations, and exploration details.

October 30, 2009: Eldorado Gold Corp. (EGO) announced that it has increased its Mineral Reserves at Efemcukura, Turkey by 23%. The deposit now contains Proven and Probable Reserves totaling 5.66 million tons of ore grading 0.265 oz/ton gold which contains 1.5 million ounces of gold. The deposit also has an additional 6.12 million tons of ore with a grade of 0.28 oz/ton containing 1.70 million ounces of gold. EGO believes there is considerable potential to further expand resources, but the geometry of the deposit will require that future drilling take place from underground workings.

October 30, 2009: Newmont Mining Corp. (NEM) reported record third quarter 2009 net income of $388 million on record revenue of more than $2.0 billion. For the third quarter cash flow was a record of more than $1 billion. For the year, NEM forecasted production to be in the range of 5.2 to 5.5 million ounces of gold. Full year 2009 production will be closer to 5.2 million ounces as a result of a failure to reach the 160,000 ounces of production that was forecasted at Boddington for the third quarter. Boddington only achieved production of 4,000 ounces as a consequence of start up delays. Production was also impacted at Batu Hijau as a result of a geotechnical failure in the pit. Lower grade ore stockpiles at Batu Hijau were processed, but the slope failure is expected to delay access to ore originally scheduled for mining in 2010 and 2011. NEM forecasts a 5% to 10% increase in gold production from both Boddington and Batu Hijau. The top priorities for development include Akyem, in Ghana, and Conga, in Peru. Akyem has 7.66 million ounces of gold reserves and is scheduled to begin production in late 2013 or early 2014. Conga, a copper-gold project has reserves of 11.8 million ounces of gold and 3.2 billion pounds of copper. Conga is targeted for start up in late 2014 or 2015.

November 2, 2009: AngloGold Ashanti Ltd. (AU) reported that its third quarter production increased 5% to 1.187 million ounces as a result of continued improvements at its Geita mine in Tanzania and fewer safety related interruptions at its Vaal River operations in South Africa. Total cash costs were within the guided range of $534 per ounce, despite the impact of higher wages and power prices in South Africa and stronger operating currencies. For the quarter, AU posted adjusted headline earnings of $163 million compared to the previous quarter's record of $167 million. During the quarter, AU invested $797 million to complete a restructuring of its hedge book at prices significantly below current market prices. AU now has hedge commitments of 3 million ounces, which is less than a year's production. AU anticipates decreasing its hedge position at the rate of 800,000 ounces per year through 2015, when it will be hedge free.

November 2, 2009: Barrick Gold Corp. (ABX) reported that it may complete the planned closure of its hedge book, announced last month, some 12 months earlier than planned. In October 2009, ABX had bought back 1 million ounces of hedged gold

November 2, 2009: IAMGOLD Corp. (IAG) reported that approval to proceed with the Sadiola Deep Sulphide feasibility study has been made by SEMOS, a joint-venture which includes AngloGold Ashanti Ltd., the Republic of Mali, International Finance Corp (IFC) and IAG. The deposit is located in Mali, West Africa. The current Sadiola mine plan will support an estimated production of 350,000 ounces of gold for 2009, and then declining to a 2015 end of mine life. The pre-feasibility study projects an increase in production at Sadiola to between 400,000 to 500,000 ounces per year with an end of mine life in 2019. The pre-feasibility indicated that an after-tax internal rate of return of 11% is achievable based on an $800 per ounce gold price and an initial investment of $400 million. The project would breakeven with a $625 gold price.

November 4, 2009: Harmony Gold Mines Ltd. (HMY) reported a net loss of $3.73 million in the first quarter which ended September 30, 2009 compared to a net income of $30.65 million in the quarter which ended June 30, 2009 and $51.77 million in the quarter which ended September 30, 2008. Overall gold production for the first quarter increased 5.6%. HMY also reported that its underground production increased 6% with a 10% increase in the average grade of recovered gold. HMY produced 373,431 ounces of gold in the first quarter compared to 353,752 ounces in the previous quarter. Revenue reported in the quarter ended September 30, 2009 was $345 million.

November 4, 2009: Hecla Mining Corp. (HL) announced that it could decide next spring whether to move forward with expansion of the Lucky Friday Mine in Mullan, Idaho. HL president Phillips S. Baker said the company will launch the $150 million to $200 million project to exploit known mineral deposits below the existing mine workings. Baker reported that drilling has found mineralization at depth that has a higher grade than the 930,000 ounces of silver that were produced in the third quarter of 2009.

November 4, 2009: IAMGOLD Corp. (IAG) reported that third quarter earnings, driven by lower mining costs and a higher realized gold price, tripled over the year-earlier quarter to $64.9 million, up from $18.8 million. Quarterly revenue rose 4% to $235.2 million. IAG lifted its 2009 gold production forecast to 940,000 to 950,000 ounces at an average gold price of $460 to $470 per ounce at an assumed $935 per ounce.

November 4, 2009: Yamana Gold Corp. (AUY) reported a third quarter revenue decline of 59% from $150 million in the third quarter of 2008 to $60.8 million. AUY had a $21 million derivative loss in the quarter, compared to a gain of $138.9 million for derivatives in the year-earlier quarter. During the third quarter AUY realized a foreign exchange gain of $15.1 million. Production in the quarter increased 34% to 314,707 gold-equivalent ounces. For the first nine months AUY reported total production of 875,763 gold-equivalent ounces, a 20% increase over the 728,124 gold-equivalent ounces reported for nine months of 2008. AUY expects full year 2009 production guidance to be in the range of 1.05 million to 1.1 million gold-equivalent ounces.

November 5, 2009: Barrick Gold Corp. (ABX). Dow Jones reported that ABX's CEO Aaron Regent said the company may consider selling its North Mara gold mine in Tanzania to help finance future acquisitions. Regent said these assets in Tanzania are viewed as non-core assets. Other Tanzanian assets that could be sold include the Kabanga nickel project which has been dogged by a series of invasions by locals.

November 5, 2009: Coeur d'Alene Mines (CDE) announced record silver production of 5.2 million ounces in the third quarter which represents an 86% increase over last year's third quarter production driven by Coeur's two new large, long-life mines, San Bartoleme in Bolivia, and Palmarejo in Mexico. These two mines produced combined production of 3.4 million ounces, or 65% of the company's third quarter silver production. Gold production also increased dramatically due to the continued ramp-up of Palmarejo, which produced 24,289 ounces in the third quarter. CDE also reported record quarterly revenue of $89.8 million, a 14% increase over third quarter 2008 revenue.

November 5, 2009: Goldcorp. Inc. (GG) reported lower third quarter net earnings mainly as a result of a non-cash forex gain from a year earlier. GG's net income for the third quarter slipped to $114.2 million compared to $297.2 million in the third quarter of 2008, when the company recorded a $257.3 million gain on foreign exchange. Following adjustments, including a $28.1 million foreign exchange loss, third quarter adjusted earnings more than doubled to $140 million from $64.2 million in the year-earlier quarter. For the third quarter of 2009, production reached 621,100 ounces, an 11% increase over the year-earlier quarter. GG increased its output guidance for the full year to 2.3 to 2.4 million ounces. GG realized $968 per ounce of gold sold in the third quarter compared to $865 per ounce in the year-earlier quarter. Cash cost in the quarter were $295 per ounce on a byproduct basis, and $384 per ounce excluding byproduct credits. For the full year GG is expecting byproduct costs of $300 per ounce compared to previous guidance of $365 per ounce.

November 5, 2009: Kinross Gold Corp. (KGC) announced that it has entered into an amended revolving credit facility which includes an increase of available credit to $450 million, on an unsecured basis from the previous $404 million secured facility. The new facility will expire in November 2012. The term loan for the Paracatu property forms part of the revolving facility and the credit facility will be available as the term loan is repaid. The new credit agreement is led and arranged by Scotia Bank and by Bank of America Merrill Lynch.

November 6, 2009: Newmont Mining Corp. (NEM) reported that Regional Governments will lead the purchase of a 14% stake in PT Newmont Nusa Tenggara, which shares ownership of the Batu Hijau mine. The Regional Governments are Nusa Tenggara Barat province, Sumbawa regency and West Sumbawa regency.

November 9, 2009: Gammon Gold Inc. (GRS) has restructured and replaced its previous syndicated credit facility with a stand alone $30 million revolving line of credit that will be offered through the Bank of Nova Scotia. The terms of the new facility are expected to enhance Gammon's net cash flow, as there will be no principal repayments other than a one-time payment on the maturity date, equal to the drawn loan balance.

November 9, 2009: Silver Wheaton Corp. (SLW) announced un-audited results for the third quarter which ended September 30, 2009. SLW had record net earnings of $33.6 million, compared to $20.2 million for the same period in 2008. SLW received record attributable production of 4.3 million silver-equivalent ounces (4.0 million ounces of silver and 3,698 ounces of gold) at a total cash cost of $3.97 per silver ounce. The increase in silver production represents a 59% increase over third quarter 2008 production. During the quarter SLW entered into an agreement with Barrick Gold Corp. (ABX) to acquire 25% of the life-of-mine silver production from ABX's Pascua-Lama project located along the Chile-Argentine border, as well as 100% of the silver production from Lagunas Norte, Pierina, and Veladero until the end of 2013. SLW will pay ABX $625 million for the silver. SLW will make an upfront payment to ABX of $212.5 million and installment payments of $137.5 million over three years. Refer to the press release for details on financing and operations.

November 10, 2009: Barrick Gold Corp. (ABX) announced that its wholly owned subsidiary, Barrick (PNG) Exploration Ltd. has successfully completed its due diligence under terms of the Letter of Intent with Coppermoly Ltd., an Australian listed company. ABX will now commence its exploration commitment by sole funding up to AUD $20 million to earn up to a 72% interest in Coppermoly's projects on the island of New Britain in Papua New Guinea. Terms of the agreement calls for ABX to spend AUD $3 million over the next 24 months. ABX will also subscribe for 6,309,647 fully paid common shares of Coppermoly Ltd., which raised $567,868. The ABX placement will equate to approximately 5% of share capital of Coppermoly, and will be voluntarily escrowed from sale for a minimum of two years.

November 11, 2009: AngloGold Ashanti Ltd. (AU) CEO Mark Cutifani told the RBC gold conference in London that he expects the South African government to reject Eskom's (Electricity Supply Commission of South Africa) proposed electrical rate increase due to the impact on gold mining Eskom has proposed a tripling of rates over the next three years. [Other companies that will also be affected include Gold Field Ltd., Harmony Gold Mines Ltd, and DRDGOLD Ltd.]

November 11, 2009: Harmony Gold Mines Ltd. (HMY) reported that it plans to close a couple of high cost mines in the next six months or so that have low gold grades or are too expensive to mine because of the strong rand. The mines that will be closed will be small operations with production in the range of 35,000 to 50,000 tons per month.

November 12, 2009: Gammon Gold Inc. (GRS) reported a third quarter loss of $7 million compared to a loss of $3.5 million in the year-earlier quarter. Revenue for the quarter fell 1% to $47.9 million. Gold sales declined 12% to 29,858 ounces. Silver sales declined 7% to 1.25 million ounces. Refer to the press release for detailed financial and operating results.

November 12, 2009: Kinross Gold Corp. (KGC) reported that it has gotten the go-ahead from the Ecuadorian government to commence work at its Fruta del Norte gold deposit. Work had been stalled after the government imposed a freeze on mining last year as it revised its mining laws. KGC indicated that it would begin drilling shortly and plans call for completion of a pre-feasibility study by January 2010.

November 12, 2009: Newmont Mining Corp. (NEM) expects gold sales at its Yanacocha joint-venture in Peru to hold steady over the next couple of years. Gold sales at Yanacocha totaled 1.8 million ounces in 2008. NEM is still deciding whether or not to develop its Peruvian Minas Congra copper-gold project which had been postponed because of the global economic and credit crunch. Minas Congra is thought to contain more than 6 million ounces of gold and 1.7 billion pounds of copper. NEM will take 12 to 16 months to make a decision on Minas Congra, which could require an investment exceeding $1 billion to develop.

October 26, 2009: Aurizon Mines Ltd. (AZK) reported drilling results along Zone 124 at the Casa Berardi Mine in northwestern Quebec. Drilling completed on 30 new holes from a drift on the 280 meter level extended the continuity of mineralization. This drilling on 50 meter (55.1 feet) spacing targeted two parallel structures that have over 100 meters (328 feet) of strike length and 250 meters (820 feet) of vertical extension between a depth of 100 meters and 350 meters (1,148 feet). Sixteen of these thirty drill holes contained gold mineralization. The best results reported 1.73 oz/ton gold over 23 feet and 0.47 oz/ton over 13.8 feet. Ten drill rigs are active on the site. An updated mineral resource is expected to be completed at year-end.

October 26, 2009: Endeavour Silver Corp. (EXK) announced that it has completed its previously announced non-brokered private placement by issuing a total of 1,299,843 units ("Units") of the company for gross proceeds of $3, 899,529. Each Unit was sold at the price of $3.00 and consisted of one common share of EXK and one-half of one common share purchase warrant. Each whole warrant will allow the purchase of one common share of EXK at a price of $3.60 until October 26, 2011.

October 29, 2009: Richmont Mines Inc. (RIC) reported total revenue of $19.1 million for the third quarter, up 16% from the $16.5 million generated in the third quarter of 2008. Precious metals revenue rose 15% year-over-year in the quarter to $17.7 million compared to $15.3 million in the third quarter of 2008. Gold sales for the third quarter were 16,840 ounces at an average price of $899 per ounce. During the quarter RIC was successful in lowering the cash cost at its two operating mines, Island Gold and Beaufor, compared to costs in the second quarter. RIC's exploration and project evaluation costs for the third quarter were $2.5 million, down from $3.4 million in the third quarter of 2008.

November 2, 2009: Apollo Gold Corp. (AGT) reported that it has recently completed additional drilling at its Grey Fox project which is located about 2.2 miles southeast of its Black Fox mine in Ontario. A drilling program which commenced on August 10, 2009, to date has completed 34 drill holes. Assay results have been completed on the first seven drill holes and the results continues to show mineral continuity in shallow, multiple intercepts. The rocks drilled at Grey Fox are similar to the host rocks at Black Fox. Recent assays show numerous intercepts of approximately 3.3 feet with grades in the range of 0.03 to 0.10 ounces per ton. One hole had an intercept of 45 feet with a grade of 0.10 ounces per ton, an another hole contained 1.8 ounces per ton over 4.3 feet. It is possible that this mineralization will trend unto the recently acquired Pike River property (from Newmont) as the Destor-Porcupine Fault Zone to the north.

November 3, 2009: New Gold Inc. (NGD) announced unaudited financial and operating results for the third quarter ended September 30, 2009. Gold production in the quarter was 79,531 ounces compared to 58,801 ounces in the year-earlier quarter. Earnings from mine operations increased by 67% to $22.6 million from $13.5 million earned in the third quarter of 2008. Gold sales in the quarter increased by 16% to 77,645 ounces from 67,156 ounces produced in the third quarter of 2008. Total cash cost per ounce of gold sold, net of byproduct sales, decreased 17% to $475 per ounce from a $565 per ounce cost in the third quarter of 2008. NGD is expected to produce between 270,000 and 300,000 ounces in 2009, growing to 400,000 ounces in 2012. Refer to the press release for details of financial and operating results.

November 3, 2009: Northgate Minerals Corp. (NXG) produced 80,791 ounces of gold and 11.9 million pounds of copper in the third quarter which ended September 30, 2009. The cash cost to produce this gold averaged $539 per ounce. For the quarter, NXG reported adjusted net earnings of $7.7 million. For the quarter NXG sold 85,397 ounces of gold at a realized gold price of $982 per ounce and 12.8 million pounds of copper at a realized price of $3.39 per pound. NXG reported consolidated revenue of $120.2 million in the third quarter of 2009, compared to $99.3 million in the year-earlier quarter. Exploration conducted in the quarter was successful in locating additional gold mineralization at Fosterville and Starwell, in Australia, and at the Young-Davidson project in Ontario. Refer to the press release for details on financing and operations.

November 5, 2009: Aurizon Mines Ltd. (AZK) reported for the third quarter, which ended September 30, 2009, net earnings of $8.2 million and adjusted earnings of $7.7 million. Revenue for the quarter was $44.2 million, matching record revenue recorded in the second quarter. Gold production for the quarter was 43,962 ounces at Casa Berardi, at a cash cost of $392 per ounce (up from a third quarter 2008 cash cost of $356 per ounce).This production was 10% more than forecasted, and 6% more than production in the year-earlier quarter. Revenue from Casa Berardi operations increased to $44.2 million from the sale of 43,650 ounces of gold, compared to $35.5 million from the sale of 40,228 ounces in the third quarter of 2008. Casa Beradi remains on track to produce 150,000 to 155,000 ounces for the full year. The increase in revenue was a result of more gold sold, a weaker Canadian dollar, and higher realized gold prices. The average realized gold price for the third quarter of 2009 was $929 per ounce. The 2009 average gold price included the sale of 20,020 ounces of gold at an average price of $886 per ounce from the exercise of call options, compared to the sale of 11,525 ounces of gold sold at a price of $832 ounces from the exercise of call options in the third quarter of 2008. AZK has managed successful exploration programs at Casa Berardi and at Joanna. Both programs have been identifying deeper ore zones. Refer to the press release for details.

November 6, 2009: Claude Resources Inc. (CGR) announced third quarter production results of 14,180 ounces of gold, a 19% increase over the 11,962 ounces produced in the third quarter of 2008. For the third quarter which ended
November 6, 2009: CGR recorded a net loss of $0.4 million. This compares to a net loss of $1.7 million for the same period in 2008. Cash flow from mining operations during the quarter increased to $5.3 million from $1.6 million in the year-earlier quarter. During the third quarter CGR maintained an active exploration program at the Seabee mine and at its Madsen project. Deep drilling at Seabee continued to find gold mineralization near existing infrastructure. Phase 1, deep drilling of the 8 Zone at Madsen was successful in proving down plunge of the 8 Zone to 450 feet below the 27th level of the mine. Refer to the press release for details on exploration.

November 9, 2009: Minefinders Corp. Ltd. (MFN) announced its third quarter and nine month financial and operating results for the periods which ended September 30, 2009. MFN commenced production at its Dolores mine in Mexico in November 2008. Revenue for the quarter was $24.1 million on the sale of 24,689 gold-equivalent ounces. Operations in the third quarter of 2009 resulted in a loss of $0.7 million compared to a loss of $6.8 million in the year earlier period. For the nine months revenue was $47.4 million based on the sale of 69,545 gold-equivalent ounces. Operations over the nine months of 2009 resulted in a loss of $8.6 million compared to a loss of $20 million. MFN has revised its previously reported 2009 production guidance to approximately 1.4 million ounces of silver and 80,000 ounces of gold at a cash operating cost of between $520 and $530 per gold-equivalent ounce.

November 11, 2009: Aurizon Mines Ltd. (AZK) reported that it has received a positive pre-feasibility study on its Joanna Project, and is proceeding with a final feasibility study. The Joanna project is located in the prolific gold producing Abitibi region of Quebec. A proposed open pit operation has the potential to increase AZK's gold production by 60% to approximately 260,000 ounces per year. Based on an $825 per ounce gold price; 1.0 million ounces of reserves; an 8.3 year mine life; an average operating cost of $434 per ounce; and capital costs of approximately $225 million, the project will have a 14.4% IRR. Refer to the press release for details.

November 12, 2009: Endeavour Silver Corp. (EXK) announced that exploration drilling on the recently acquired Porvenir Cuatro property in Guanacevi District, Durango, Mexico continues to intersect high-grade silver and gold mineralization along the Santa Cruz vein system. Recent drilling highlights include 21.2 oz/ton silver and 0.044 oz/ton gold over 11.3 feet in hole PC50-3. This newly discovered high-grade vein has now been outlined by 11 drill holes over a 200 meter long by 200 meter (656 feet) deep area within the Santa Cruz vein. This zone of mineralization is still open along strike and down dip. In addition to the 16 holes already completed, 5 additional holes will be drilled in the fourth quarter. As a result of this successful drilling, management has approved a 75% increase in the 2009 exploration budget. EXK currently has seven drills working in Mexico, four on exploration projects and three defining ore limits at the two mines.