Eaglecrest Exploration: recent financing, boardroom shuffle sets company up nicely for 2011

Eaglecrest Explorations (TSX-V: EEL, OTC:ECRTF) recently announced a placement of 21.4725million units at 30 cents and the issue of a similar number of warrants to raise C$6,44 million , to fund exploration programs in Colombia, to maintain projects in Bolivia and for working capital.

The management of the company has also been reorganized with the appointment of Carl Hansen as Chairman of the Board, and Hans Rasmussen as CEO, who are both senior geologists, each with several decades of experience in Latin America with major exploration groups. Investors include Sprott Asset Management, along with a group of U.S. investors who control a major stake in the company.

Eaglecrest is developing two new projects known as Fredonia and Venecia, located just south of Medellin, in northern Columbia. Up until 1937, Columbia was the largest gold producer in the America’s, but since that time has seen little new exploration over the last half century.

This is now changing as the country has become safer and a very fashionable exploration target for gold and base metals, along the least explored extension of the minerals rich Andes Cordillera, that runs along the entire length of South America. Major finds in Northern Columbia, include the La Colosa Mine, with a resource of 13 million ounces of gold, under development by AngloGold (NYSE: AU), Angostura with 11.6 million ounces, under development by Greystar (TSX: GSL, AIM: GSL), and a host of other world class projects now under development by other companies.

The Fredonia Project Area covers an area of 150 km² and is under option from a private company called Grupo de Bullet. Consideration for the option includes a payment of $120,000, the issue of 1 million shares and warrants, and a commitment to spend $2.8 million on exploration over 3 years. This interest can be increased to 75% by funding development of selected targets to completion of feasibility studies.

A first pass sampling program was completed in the eastern section of the Project Area at a prospect known as El Retiro, which was identified from small scale artisanal mining along exposed veins hosted in Proterozoic metamorphic rocks. A 0.8 meter channel in one of these quartz veins provided chip samples with grades of up to 8.25 g/t gold and 47.5 g/t silver. Numerous veins are visible in outcrops and have been tagged for follow up reconnaissance sampling and mapping.

In the central portion of the Project area known as Quebrada Garrucha, a 2 meter channel returned up to 0.33 g/t gold and 5.4 g/t silver from a mineralized volcanic breccia, with a number of additional breccia bodies identified for future sampling and mapping. Rock chip samples from nearby mineralized faults returned up to 7.5 g/t silver. This target area is located 2 kilometers east of Bellhaven’s (TSX-V: BHV) La Mina Concession, where a Non Compliant  gold Resource of 27.1 million tonnes at 1.1 g/t for 960,000 ounces has been identified. A number of additional gold targets have also been targeted for additional drilling at La Mina by Bellhaven, which reflects upon the high prospectivity of the area.

Eaglecrest has secured an option to acquire a 75% interest in the Venecia Project, covering 1,985 hectares, and compliments the Fredonia Project by completely encircling Bellhaven’s La Mina, where drill holes of 72.7 meters and up to 142.5 meters recorded grades running from 0.7 g/t to 1.07 g/t gold. The Quebradona Project with 1.5 million ounces of gold, which lies 20 kilometers to the south, has recorded intersections of up to 380 meters at 1.15 g/t of gold.

The company is currently acquiring airborne and ground magnetic data over Fredonia, and will continue with mapping and sampling over select targets. A 5,000 meter drill program and regional evaluation is planned for mid 2011, to be followed by an additional 10,000 meter drill program later in the year.

Eaglecrest owns 100% of the San Simon Project located in Bolivia, and includes the Mina Vieja, which was originally discovered in 1742. The project area  was exploited by artisanal miners in the 1980’s, and lasted for about 30 years, with as many as a thousand people extracting gold from shallow workings when the field was at its peak.

Eaglecrest  recently completed a NI 43-101 compliant resource on  the L463 Gold Shoot on the Don Amelia Zone, for an Indicated Mineral Resource of 262,000 tonnes at 5.15 g/t and an Inferred Resource of 251,000 tonnes at 5.46 g/t. for contained gold of approximately 87,452 ounces. 

This resource statement  excludes multiple shoots that are distributed over a 4 kilometer strike line, and does not include the nearby L484 Shoot or the San Pedro West Shoot, or any potential extensions at depth. The technical study also found that many of the mineralized drill holes were too widely spaced, so a further resource upgrade can be completed with infill drilling placed 25 meters apart.

Prior to 2002, Eaglecrest had  completed 7,000 meters of drilling  at the Buriti – Paititi Zone which has open pit potential on at least two locations over a 7 kilometers strike line. The Paititi Prospect lies at the western end of the strike line and has been drilled with 52 holes, and measured at approximately 200 meters x 800 meters, containing sub horizontal mineralized layers carrying gold values of 3 – 10 g/t, as well as identifying vertical feeder faults that exceed 10 g/t gold. A near surface bulk sampling program of 197 tonnes produced an average grade of 1.64 g/t gold, which is indicative of low cost, economic grade for shallow open pit mining.

The Buriti Prospect lies at the eastern end of the same trend and exhibits near surface mineralization that was partially drilled in earlier campaigns. The area has extensive exposure of outcropping mineralization that was rich enough to support artisanal mining in the past. Earlier this year Eaglecrest completed 10 trenches, over a distance of 2,200 meters, at the San Francisco Prospect which lies at the mid point between Buriti and Paititi. This area carries very shallow overburden that was easily penetrated by a backhoe to expose quartz veins, veinlets and stockwork zones.  Sampling and trenching data confirms that the Buriti and Paititi Zones are connected through the San Francisco Zone that lies between them, and broadens the width of the overall strike to a width of 1.5 kilometers within the 7 kilometer strike line.

Eaglecrest is seeking terms on the development of the San Simon Project as an advanced stage, underground development project, at the Don Amelia Zone. Terms are also being sought for the continued development of the Buriti – San Francisco – Paititi Zones, where recent work has upgraded the prospectivity and open pit potential of the whole strike line.

A substantial number of companies are now operating in Bolivia, including Coeur d'Alene Mines Corporation (TSX: CDM, NYSE: CDE), investing $240 million at the San Bartolome Mine, with a resource of 120 million ounces of silver, and Pan American Silver (TSX: PAA, NASDAQ: PAAS), which runs the San Vicente Silver Mine.