Eaglecrest Explorations Continues Expansion of the High-Grade Gold Zone at San Simon

These are not the best of days for exploration companies. As funds to finance exploration programmes dwindle, most of them have shelved their development plans and have shifted gears to cash preservation mode. Companies that shrug off such worries but continue with their development efforts therefore usher considerable comfort in their projects and prospects.

This makes Canadian Venture and Frankfurt listed Eaglecrest Explorations Ltd (TSX.V: EEL, Frankfurt: EAT) an interesting story. We have been following Eaglecrest for some time as we have a penchant for companies with assets in relatively less explored countries. Eaglecrest has some 300 square kilometres of mineral title at the San Simon project in north-eastern Bolivia. The structures that host gold mineralization on the property are geologically identical to some of the major well-known quartz vein gold deposits and gold shoots, such as those found in Ghana.

It would still appear as a brave move on our part to be enthusiastic about companies with assets in Bolivia, given the hostility by Mr. Morales towards energy companies. Hostility actually ends there, that is at energy companies. Bolivia is keen to develop its mineral riches and has already attracted companies such as Coeur d'Alene (San Bartolome), Sumitomo/previously Apex Silver (San Cristobal) and Pan American Silver (San Vicente).

In addition, the Indian steel giant, Jindal Steel and Power Limited has acquired the development rights for 20 billion tonnes of EL Mutun Iron Ore Reserves in Bolivia and is planning a $2.1 billion investment.

These are established mining companies and are not known for making investments willy-nilly! Eaglecrest has already undertaken considerable development activity and recently reported the expansion of surface high-grade gold zones at the Buriti gold target at the San Simon project. Rock chip assay results from samples in this zone varied from below detection to 10.85 grams per tonne gold. Fifteen samples had results greater than 0.5 grams per tonne gold with eight samples returning greater than 1 gram per tonne gold.

The new surface mapping and sampling has extended the Buriti zone 300-metres to the north, making the zone at least 300-metres wide. Similarly, the Paititi zone, on the east end of the same trend, is at least 200-metres wide where artisanal miners over the past 20 years have exposed gold-bearing mineralization in a small open pit. According to Hans Rasmussen, President these high-grade gold results continue to expand the surface expression of the Buriti stockwork-vein gold mineralization. New results demonstrate there is at least seven kilometres of gold mineralization that extends from Paititi westward to Buriti. Rasmussen stated that the ground crews continue to work on evaluating this zone with every new trench and rock chip sample continuing to indicate a potentially large mineralized zone for a future open-pit gold resource.

Mapping and sampling from outcrop and trench exposures will be used to prioritize multiple zones along this Paititi-Buriti trend for drilling once adequate funds are secured later this year reckons Rasmussen. It has been busy few months for Eaglecrest. As part of the on-going district-wide exploration programme a total of 268 surface rock chip samples were collected in early 2009.

Of these, 160 were collected along the mineralization trend that extends from the Paititi pit westward to an area of outcropping mineralization called Buriti. Based on these new results, as well as samples collected east of Paititi, the zone now has about seven kilometres of strike length east-west.

More significant, zones of alteration-mineralization within the trend near Buriti are now known to be up to 300-metres wide as announced above, based on surface rock chip, trench and soil sample data. Much of the near-term development activity is expected to be in the Paititi-Buriti zone due to its proximity to the Company's existing infrastructure and its strongest, most contiguous gold-arsenic geochemistry in the 2007 soil data. Paititi-Buriti soil sample assay results ranged from below detection to 1.57 grams/tonne gold. Historic data from exploration efforts at the Paititi following surface soil sampling, rock chip sampling, trenches, core drilling and underground bulk sampling by two prior management teams have left useful information to help the current development programme.

Eaglecrest has also completed an in-house geologic model using the 52 holes that were drilled at Paititi and the new model is expected to assist in expanding gold mineralization. Clearly, Eaglecrest’s investment case is dented by the over-assessment of country risk in Bolivia. A clear understanding of the country risk specifically for mining projects may prove that the pessimism is overdone. Given the increased investment by other mining companies in Bolivia and the government’s desire to develop its mineral riches, perhaps it is time to take a close look at Eaglecrest. We will keep the readers informed as the story unfolds at Eaglecrest.