Mr. Trevor Mulroney reports

EXTORRE PROPOSES STAGED DEVELOPMENT FOR CERRO MORO

Extorre Gold Mines Ltd. has provided details of a preliminary internal study for the staging of mine development contemplated in PEA-3 for the Cerro Moro gold-silver project announced on April 2, 2012. The study indicates potential mine development capex (capital expenditure) of approximately $124-million (U.S.) in stage one of a two-stage approach while maintaining initial production exceeding 170,000 ounces per year gold equivalent in the first year of production. All currency figures in this release are presented in United States dollars unless otherwise indicated.

              PRODUCTION/COST SUMMARY: FIRST STAGE: 500 TO 600 TPD

                                                                 Estimated range            
Initial annual production (gold                                             
equivalent ounces)                                   170,000             180,000
Initial capital expenditure                                                 
(excludes recoverable taxes)                    $110-million        $120-million
Approximate recoverable taxes                    $14-million         $16-million
Initial operating costs (excludes                                            
royalties and export tax)             $200 per recoverable gold equivalent ounce
Potential free cash flow (before                                            
royalties and taxes)                            $190-million        $200-million

The first year of a potential two-staged mine development foresees an initial mine throughput of 500 to 600 tonnes per day (tpd) increasing to 1,000 to 1,100 tpd levels within 18 months of production start-up. This approach potentially reduces the initial capex to $110-million (excluding recoverable tax of $14-million) while the balance of the mine's capital expenditure requirements could be financed through operating cash flow.

The substantial potential early cash flows generated from mining very high-grade open-pit mineralization would finance continuing development costs and allow process plant and infrastructure expansion as well as underground mine development to commence within six months of mine start-up. The potential mine expansion to 1,000 to 1,100 tpd levels could be achieved within 18 months of commencement of production.

Highlights of the revised potential mine development program are as follows:

First stage: 500 to 600 tpd

• A small processing plant and minimum infrastructure;
• Open-pit mining only;
• High-grade mineralization from open pits to be blended with lower-grade material to maintain a constant feed grade to the plant;
• The high grades providing potential high cash flows and low operating costs on a per ounce basis;
• Open-pit mining at this level potentially sustainable for up to three years (based on resources to November, 2011).

Second stage: 1,000 to 1,100 tpd

• Expand the processing plant and complete the full infrastructure;
• Start underground mining operation;
• Continue mining the remaining open-pit material, blending such feed with high-grade underground material;
• Plant expansion to be completed within 36 months of mine start-up.

Metal production:

• Total life of mine: 889,500 ounces of gold and 48 million ounces of silver (1.8 million ounces gold equivalent or 92 million ounces silver equivalent);
• First year: 170,000 to 180,000 ounces gold equivalent;
• Average first five years: 190,000 to 200,000 ounces gold equivalent;
• Average life-of-mine production (12 years): 154,000 ounces per year gold equivalent comprising gold production of 74,000 ounces per year plus silver production of four million ounces per year.

Capital expenditure:

• Base capex: $110-million to $120-million plus 13-per-cent VAT (value-added tax) (refundable) of approximately $14-million to $16-million; base capex including a contingency on the plant and open-pit mining fleet and also including indirect plus owners' costs plus spares of $21.5-million;
• Sustaining capex of $250-million to $270-million (largely underground development costs and power line);
• An option to add $15-million to the initial capex to accommodate the plant upgrade and to minimize lost time on the changeover for increased throughput in phase 2; would reduce the sustaining capex by an equivalent amount;
• Cost of first decline (Escondida): $13-million (plus VAT) -- early start-up dependent on available financing;
• Mine working capital: $15-million.

Operating costs (mine site, excludes royalties and export tax):

• First stage: approximately $250 to $260 per ounce gold equivalent recovered;
• First six years: approximately $290 to $300 per ounce gold equivalent recovered;
• Life-of-mine cash cost per ounce gold equivalent: $330 to $340.

Trevor Mulroney, Extorre chief executive officer, stated: "Cerro Moro is very well suited to our preferred staged development approach because of the reduced initial capital requirements and our ability to rapidly and selectively access very high-grade mineralized zones. In fact the head grade on a diluted basis exceeds 30 g/t for the first stage of production.

"The staged development allows Extorre to meet its objective of commencing production in 2014 and train a work force while significantly reducing initial capital requirements, which is an important consideration given the state of current capital markets. The strong operating cash flows allow for future development expansion.

"For the first five years annual mine output is 60 to 70 per cent of that modelled in PEA-3 (193,000 ounces per year versus 248,000 ounces per year gold equivalent). This is achieved against a 57-per-cent reduction in the upfront capital requirement.

"Operating cash costs on a gold equivalent basis are in fact lower than in PEA-3 because of the higher head grade feed being supplied to the processing plant. That is to say the higher grades more than offset the higher unit costs associated with a smaller mine throughput."

Bryce Roxburgh, co-chairman of Extorre Gold Mines, is a qualified person as defined in National Instrument 43-101 and is responsible for preparing the information contained in this news release.

We seek Safe Harbor.