Extorre Says YPF Nationalization Won't Affect Gold Projects

Extorre Gold Mines Ltd. (XG, XG.T) said Thursday there are no signs that the nationalization of Argentina's largest oil and gas company, YPF SA (YPF, YPFD.BA), foretells similar moves against mining companies in the South American nation.

"The mining sector has received explicit public support from the provinces and the federal government," Canada-based Extorre said in a statement.

The company is developing the Cerro Moro, Puntudo and Don Sixto gold projects in Argentina. "Very recent discussions with potential financiers to provide capital for the potential development of Cerro Moro have indicated that the YPF action has not materially affected the finance ability of the project," Extorre said.

Argentine President Cristina Kirchner said Monday that she will ask Congress to approve the expropriation of a 51% stake in YPF from its controlling shareholder, Spain's Repsol YPF SA (REPYY, REP.MC). The bill is expected to be quickly passed by the Kirchner-controlled Congress.

The move has sent Argentine stock and bond prices into a tailspin as investors flee local assets.

Extorre's shares were recently 2.4% lower at $4.51 Thursday. The stock has fallen almost 17% so far this week.

-By Shane Romig, Dow Jones Newswires; 54-11-4103-6738; [e-mail]