(Source: Canada Newswire)HALIFAX, Oct. 15 /CNW/ - Etruscan Resources Inc. (EET.TSX) has reported its financial and operating results for the nine months ended August 31, 2009. The third quarter 2009 unaudited financial statements and management's discussion and analysis are available on the SEDAR website at www.sedar.com or at the Company's website at www.etruscan.com. All figures are reported in Canadian dollars unless otherwise noted and the financial statements have been prepared in accordance with Canadian GAAP. Commercial production for the Youga Gold Mine was achieved on July 1, 2008, accordingly the third quarter ended August 31, 2008 includes only two months of gold revenues and expenses.

Highlights for the nine months ended August 31, 2009

- Third quarter gold production from the Youga Gold Mine located in

Burkina Faso increased 36% over second quarter production with 17,747

ounces poured;

- Gold production for the nine months from the Youga Gold Mine aggregated

45,952 ounces and gold sold aggregated 47,596 ounces;

- Samira Hill Gold Mine ownership interest sold for US$3 million;

- Gold resources at the Finkolo Gold Project in Mali upgraded with

610,000 ounces now classified as measured and indicated and 220,000

ounces as inferred(1); and

- A regional geochemical survey covering the 1,000 km2 Daoukro Permit in

eastern Cote d'Ivoire establishes the Dietekro gold anomaly as a

priority drill target.

On September 23, 2009 the Company entered into a binding agreement with Endeavour Financial Corporation (Endeavour) whereby Endeavour has agreed to purchase US$43 million of common shares at a price of C$0.30 per common share. The private placement is part of a comprehensive financial re-engineering being undertaken by Etruscan which is to include a substantial restructuring of Etruscan's hedge and debt facilities. The combination of the Endeavour equity financing and the increased gold revenues from the Youga Mine operation, which will result from the reduction of the $700 per ounce hedge commitments, is forecast to adequately fund the Company's near term financing requirements. Further details are provided in this press release in the section titled "Liquidity and Capital Resources".

Another significant event was the improved performance of the Youga Mine during September 2009. The Mine produced 6,600 ounces which was in line with forecast. Furthermore, the Company received approval from its gold hedge providers to roll forward the hedge commitments for September and sell gold at spot prices. A total of 6,140 ounces were sold at an average price of $1,000 per ounce with the estimated positive cash flow generated from Youga operations for September being US$1.5 million. The Company is also selling October gold production at spot prices. The financial results for the Youga Mine going forward will benefit from the recent connection to grid electrical power which is forecast to result in a cost reduction of between US$250,000 and US$350,000 per month when compared to the cost of using the on-site diesel generators.

Youga Gold Mine, Burkina Faso

The Youga Gold Mine is located in southern Burkina Faso near the border with Ghana. The mine is owned and operated by Burkina Mining Company (BMC) which is owned 90% by Etruscan and 10% by the State of Burkina Faso.

Commercial production and substantial completion for accounting purposes was achieved at the Youga Gold Mine effective July 1, 2008. Prior to July 1, 2008 the operating and financing costs associated with the Youga Gold Mine were capitalized as preproduction costs to property, plant and equipment. Gold production was ramped up to forecast levels in the fourth quarter of 2008 with the operation processing approximately 239,000 tonnes of ore and producing 21,169 ounces at a cash operating cost of US$480 per ounce in the last quarter of fiscal 2008.

Commencing in December 2008 the operation experienced a decrease in the availability of the diesel generators that provide power to all aspects of the milling operation. These generators were designed to provide stand-by power not continuous 24-7 power. During the first half of 2009 a number of the generators required major maintenance which resulted in reduced plant availability. This situation was mitigated in the third quarter with the sourcing of three 1.0 MW Caterpillar generators to the Youga mine site all of which are operational. The addition of these three new generators stabilized the power supply and allowed maintenance to proceed on the existing generators. Also, the 22 km grid power line from the town of Zebila in Ghana to the Youga Gold Mine site was completed and energized during the later part of September. The Youga operation is now operating on grid electrical power. The initial unit rate for grid power is US$0.13/kwh compared to US$0.33/kwh for the diesel generated power. This represents a substantial operating cost savings ranging from US$250,000 to US$350,000 per month when compared to the on-site diesel generated power supply previously used at the mine.

A second factor contributing to reduced gold production during 2009 year to date was lower than forecast drill rig availability for the blasting of ore and waste. The contractor continues to make improvements to the rigs to increase availability so that the backlog of waste mining in the Main Pit can be addressed. The mined ore grade for 2009 year to date was below forecast for two main reasons. The reduced blast volumes prevented access to the higher grade ore blocks scheduled in the mine plan for the period and the quality of the blasting was poor, causing excessive ore dilution and gold ore losses. Both of these issues are being addressed and additional drill capacity is being acquired. With these issues resolved, the actual mined ore grade is expected to be in line with the projected grades set out in the Youga mine plan.

These operational issues negatively impacted gold production for the first half of 2009 with 15,181 ounces in the first quarter and 13,024 ounces in the second quarter. The lower than forecast gold production resulted in the unit cash operating costs being significantly above the forecast costs. The remedial measures outlined above have resulted in an improvement in gold production in the third quarter with 17,747 ounces produced at a cash operating cost of US$719 per ounce. This represents a 36% increase in ounces produced and a 17% decrease in cash operating costs compared to the second quarter.

During the third quarter of 2009, gold sales aggregated 16,916 ounces which generated cash revenues of US$11.8 million. All of this production was delivered into the US$700 per ounce hedge.

During the first nine months of 2009, gold sales aggregated 47,596 ounces which generated cash revenues of US$33.6 million.