Exco Resources Limited (ASX:EXS) Quarterly Report For The Period Ended 31 December 2009
Exco Resources Limited (ASX:EXS) Quarterly Report For The Period Ended 31 December 2009

Perth, Feb 4, 2010 AEST (ABN Newswire) - Exco Resources Limited (googlechartASX:EXS) (googlechartPINK:EXRSF) is pleased to provide a Quarterly Activities Report for the period ended 31 December 2009.

EXPLORATION & DRILLING UPDATE

HIGHLIGHTS

- SAM (Sub Audio Magnetic) surveys define multiple magnetic and conductive bodies at Eight Mile Creek East and Turpentine South.

- Significant IOCG style mineralization intersected at Eight Mile Creek East. EHRC247 contained 34m @ 0.70% Cu and 0.22 g/t au from 96m depth.

- Mineralisation confirmed at Turpentine South with EHRC238 intersecting 6m @ 0.91% Cu from 18m and also 18m @ 0.49% Cu from 56m depth.

- Initial Drilling at the Tanbah Prospect has intersected copper mineralization in most holes drilled. Assays for the first 3 holes include a best intersection of 6m @ 1.62% Cu and 0.44 g/t Au from 14m depth in ECRC327.

- Best of 3 holes drilled at Salebury Prospect intersected 6m @ 1.56% Cu and 0.71 g/t Au in ECRC316.

- Widespread low level copper anomalism in 6 holes drilled at Fisher Creek West Prospect.

Having recommenced drilling on Exco's Cloncurry Copper and Hazel Creek Projects during the December quarter, activities are currently in a seasonal lull. Work is again scheduled to resume over the next few weeks, weather permitting.

Assay results have been received for approximately 50% of the drilling completed in December 2009, with the remainder expected to be completed over the next few weeks.

CLONCURRY COPPER PROJECT (CCP)

Reverse Circulation (RC) drilling commenced on 16 targets throughout the CCP for a total of 3,106 metres. Of these targets 10 were regional greenfields targets with no previous drilling, and 6 were follow-up to previous drilling by Exco. Positive results were received from 5 of the greenfields targets with results still due for 2 of the 10 drilled to date. Four of the six follow-up targets produced some encouragement with assays still due for one of the targets (Canteen Prospect).

E1 Camp - Regional magnetic anomalies

The E1 Camp is host to a sizeable resource base comprising 44.8Mt @ 0.75% Cu & 0.21g/t Au and containing 338,000t of copper and 309,000 oz of gold. Recent drilling has been successful in both expanding this resource base, and in converting a significant percentage (~55%) of Inferred resources to the Indicated category as the basis for an ultimate mineable reserve for the CCP.

Remaining within the E1 Camp are numerous geophysical anomalies that are considered highly prospective, but which are, as yet, largely untested. Several key magnetic anomalies to the south and east of the known E1 Deposits are considered to be regionally significant and have therefore been selected for further drill testing.

During the quarter four RC holes for 391 metres were drilled near the E1 Camp of deposits on 2 partially tested regional magnetic targets, as follow-up to encouraging geological and geochemical results in previous drilling. The current programme has so far failed to upgrade these targets and results will be fully evaluated to determine any future potential on these 2 anomalies. Other regional targets will be tested when the drilling resumes.

Monakoff North Regional Magnetic Anomalies EPM15870 (EMRC307-310)

Established resources at the Monakoff and Monakoff East Deposits together comprise 4Mt @ 1.32% Cu & 0.42g/t Au, containing 53,000t of copper and 54,000 oz of gold. A key aspect of these deposits is their relatively higher grade, such that finding additional sources of similar material is a high priority for the Company.

The region around Monakoff is host to a number of buried magnetic anomalies of similar size and intensity to that associated with the known deposits. Moreover, adding to the prospectivity is the fact that the geological and structural setting of these anomalies appears similar to both Monakoff and the E1 deposits to the North.

Four RC holes for 397 metres tested four new magnetic targets buried under younger overburden within EPM15870. Results are only fully available for the first 2 holes. EMRC307 intersected a wide zone of low level copper and cobalt anomalism from 32m to the end of hole at 82m. Best interval within this zone is 6m @ 0.19% Cu from 52-58m.

EMRC 308 tested a separate magnetic feature and did not return any significant assays.

Results for the other 2 holes (EMRC 309 and 310) are expected in the next few weeks.

Liontown JV ECRC313-315 and ECRC332)

Four buried magnetic targets were tested by 4 RC holes for 461 metres. Some low level copper (up to 0.14% over 2 metre intervals), was encountered in ECRC313, with associated elevated gold arsenic cobalt and molybdenum. Assays have not been completed for ECRC332. The geology and geochemistry will be fully evaluated when assays are complete to determine the level of follow up required.

PUMPKIN GULLY SYNCLINE

The Pumpkin Gully Syncline (PGS) hosts numerous prospects in a range of geological settings. The syncline is composed of folded sequences of metavolcanics and metasediments with an extensive ironstone unit broadly following the contact between the metasediments and metavolcanic rock units.

This ironstone hosts the Monakoff and Monakoff East Deposits on the northern limb of the syncline, the Pumpkin Gully Prospect at the interpreted closure of the syncline, and the Fisher Creek West Prospect on the southern limb.

The ironstone has a total strike length of more than 10km on the northern limb of the syncline. Airborne magnetic survey data suggests the continuity of southern limb may have been somewhat disrupted; however, work to date has highlighted significant prospectivity.

Fisher Creek Prospect (ECRC318-320)

Three RC holes were completed at the Fisher Creek Prospect for 282 metres. Best result from this limited programme is 2 m @ 1.69% Cu and 0.28 g/t Au in ECRC318 from 72m depth. Further geophysics (SAM survey) is planned to better reveal the geology of the area and help site future drill follow up.

Fisher Creek West

Six RC holes for 318 metres were drilled at the Fisher Creek West Magnetic anomaly which has a strike extent of approximately 3 km. The anomaly, where exposed at surface, represents magnetite iron formation similar to the Monakoff ironstone which hosts the nearby Monakoff Deposit. Although these holes failed to intersect potentially ore grade mineralization, they did intersect widespread low level copper and gold anomalism and further drilling is planned.

Salebury Prospect (ECRC316-317)

Two RC holes for 230 metres were drilled between existing drill lines at the Salebury Prospect. Excess water flows preventing holes reaching planned depth. ECRC316 intersected 6m @ 1.56% Cu and 0.71 g/t Au from 30m depth. Further drilling is planned.

Tanbah Prospect (ECRC327-331 ECRC336-340)

The first 3 holes drilled at Tanbah have returned significant copper and gold intercepts in shallow RC holes directed below visible surface alteration and mineralization. A total of 10 holes were completed prior to the monsoonal season in December 09 for a total of 747 metres.

The initial three holes tested approximately 250m of strike where visble copper mineralization was evident at surface at the contact of metasediments/metavolcanics and a calcite silica rock.

ECRC327 intersected 6m @ 1.62% Cu and 0.44 g/t Au from 14m downhole depth and ECRC 328 intersected 8m @ 0.70% Cu and 0.27 g/t Au from 18m depth.

Results for the remaining 7 holes are expected in the next few weeks.

CANTEEN PROSPECT

Three holes were drilled at the southern extension of the large magnetic/radiometric anomaly at Canteen. Widespread sulphides and magnetite alteration were encountered however no massive Cu sulphides were noted in the recent drill holes. Assay results are not yet available. Further drilling will continue to the south over significant surface copper anomalism.

HAZEL CREEK PROJECT

The Hazel Creek Project area includes the Turpentine Deposit (1.8mt @ 1.03% Cu & 0.2 g/t Au) and a number of other prospects where ore grade mineralisation has previously been intersected.

Drilling was initiated at the Turpentine South and Eight Mile Creek Prospects to follow up positive results from previous Exco Drilling. A SAM (Sub Audio Magnetic) survey was also completed over portions of these prospects and results have generated further targets which will be tested when the drilling resumes.

Turpentine South

Nine RC holes (633m) were completed on the Turpentine South Magnetic anomaly where previous drilling had intersected 12m @ 0.79 % Cu and 0.42 g/t Au in the initial phase of drilling in 2008.

Drilling was carried out on existing cleared drill lines. Additional anomalies were outlined by the SAM survey, and these still require preparation of suitable site access and drill pads.

Most holes encountered some low level mineralisation or alteration associated with the magnetic target. EHRC238 intersected two separate zones of mineralization with 6m @ 0.91% Cu and 0.09 g/t Au from 18m depth, and 18m @ 0.49% Cu and 0.06 g/t Au from 56m depth. Best higher grade intervals from this hole were 2m @ 2.05% Cu from 18m and another 2 m at 2.05% Cu from 72m depth.

Eight Mile Creek East

Four RC holes were completed at Eight Mile Creek as follow-up to previous drilling by Exco in 2001. Significant mineralization was intersected in EHRC247 and alteration and anomalism in the remaining 3 holes. The recent SAM survey has outlined a more definitive trend of the magnetite alteration and this will be tested when the programme resumes in the next few weeks.

EHRC247 was drilled below EHRC138 (16m @ 0.86% Cu and 0.2 g/t Au), and intersected a wide zone of magnetite bearing alteration with widespread zones of pyrite and chalcopyrite between 84 to 130m down hole depth. Breccia textures have been noted in the larger RC drill chips. Best assays for this interval are 0.70 % Cu and 0.22 g/t Au from 96-130m.

JOINT VENTURES

IVANHOE JV (Exco 100%, Ivanhoe option to earn up to 80%)

In May 2007 Exco and Ivanhoe Australia Limited (IVA) entered into a Joint Venture agreement outlining joint venture terms over a number of Exco's tenements in the Soldiers Cap and Tringadee Project areas. The JV tenements cover a total of ~560km2, and are contiguous with Ivanhoe's Cloncurry Project tenements in the Selwyn District.

The joint venture comprised an initial option period, during which time Ivanhoe was required to spend a minimum of A$600,000. At the end of this option period Ivanhoe had exceeded the minimum spend and confirmed its intention to continue with further exploration on the joint venture tenements. A total expenditure of A$5 million by May 2010 will earn Ivanhoe an 80% interest in the tenements.

Field work done during the quarter has included drilling at U4 (EPM 11676), Mac's Tank (EPM 13741) and Garnet Creek (EPM 11169); and ground magnetic surveys at Killer Bore North (EPM 16177) and Wewak (EPM 14033).

Assay results from drilling programmes in the previous quarter at Saxby (EPM 12285) and Fairmile West (EPM 12290) are incomplete with no significant mineralisation in those received to date.

Geophysical data from Garnet Creek is being processed to identify further drill targets.

CORPORATE

SHARE PLACEMENT

The Company completed the execution of a placement agreement to raise A$10.1m (before expenses) through the issue of 41.3 million shares at 24.5 cents each on 4th November 2009.

The placement funds will be used to proactively advance the Company's portfolio of copper projects in north-west Queensland with work having already commenced as discussed above.

The placement was managed by Exco's London-based advisors Fox-Davies Capital Ltd with shares issued to two institutional investors and Exco's largest shareholder Ivanhoe Australia Pty Ltd (googlechartASX:IVA). Ivanhoe thus maintain their 20.18% shareholding in the Company.

On 2 December 2009, as part of the fee arrangements for the capital raising, the board resolved to issue 1,650,000 Options to Fox Davies Capital Ltd, at an exercise price of 27.3 cents with an expiry date of 20 October 2012. In accordance with the contractual conditions the Options vest immediately.

ACCOUNTS

With a cash balance at the end of December of A$19.9m Exco is in a strong position to achieve its corporate and development objectives across the project portfolio.

ANNUAL GENERAL MEETING

The Annual General meeting of the Company took place on Tuesday 24th November 2009. All resolutions before the meeting were passed.

For the complete Exco Resources Quarterly Report for the period ended 31 December 2009, please click the link below:

http://www.abnnewswire.net/media/en/docs/62220-ASX-EXS-478732.pdf

Contact

Michael Anderson
Managing Director
Phone: +61-8-9211-2000

Eamon Byrne
Company Secretary
Phone: +61-8-9211-2000



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