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TABLE OF CONTENTS Oct 5 - 11, 2009 Volume 95 Number 33 - 0 comments

Eurasian Explores Haiti's Rich Earth (October 05, 2009)

FIRST MOVER CONTROLS MORE THAN 10% OF NATION'S GROUND

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By: Gwen Preston
2009-10-05

SITE VISIT

CAP HAITIEN, HAITI -- When Columbus crossed the Atlantic in 1492, he landed in the Bahamas and, after a few months, ended up in what is now Haiti. One of his ships ran aground on the island's rugged shore and Columbus ordered some of his men to use the remains of the Santa Maria to establish the first Spanish colony in the Americas.

The initial colony did not survive but another was soon established and over the next 200 years, the colony on Hispaniola, as the island is called, became the richest in the West Indies and one of the richest in the world. What helped provide such riches? Gold, of course.

The island has since survived a turbulent history and the western half, which is now Haiti, is the poorest country in the Western Hemisphere. But much gold likely still remains within the mountainous island and, with the nation slowly gaining some stability, at least one exploration company -- Eurasian Minerals(EMX-V, ESMNF-O) -- is placing its bets on Haiti.

Few would argue that Haiti does not hold significant mineral potential. After all, the small country shares an island -- specifically the remnants of a Cretaceous arc assemblage along the northern margin of the Caribbean plate -- with the gold-rich Dominican Republic. Barrick Gold (ABX-T, ABX-N) and Goldcorp's (G-T, GG-N) Pueblo Viejo, the Dominican's biggest deposit, hosts 215 million tons of proven and probable reserves containing 20.4 million oz. gold, 117.3 million oz. silver and 423.5 million lbs. copper.

No such deposit has been found in Haiti but the reason may be more political then geological. The nation has spent most of the 20th century too poor, politically unstable, and dangerous for international mining companies to invest in exploration.

That is not to say the country was left completely unexplored. From the 1970s to the mid-1990s several mining companies, including Kennecott Minerals (now part of Rio Tinto [RTP-N, RIO-L]) and Newmont Mining (NMC-T, NEM-N), tried their hands at Haitian exploration. During the same timeframe, the United Nations Development Program (UNDP), realizing that assistance in uncovering mineral wealth could help lift Haiti out of poverty, sent geologists across the country to map, and then advanced several prospects as far as drilling.

But in 1994, with the United States poised to invade the country and topple the military regime of the time, the few companies that had been brave enough to enter Haiti left.

Keith Laskowski, in his role as Newmont's Caribbean exploration manager, had encouraged the major to explore Haiti and had seen firsthand the mineral promise it held. With Newmont's departure, he was forced to shift his attention elsewhere but he never forgot Haiti. He kept up with political developments there, watching for a time when the country regained enough stability for international investment. And in 2006, he felt he saw that stability on the horizon.

Laskowski turned to his friend and fellow ex-Newmont geologist Dave Cole, who is now president and CEO of Eurasian. Cole has always liked the "first mover" concept, and under his direction, Eurasian was already exploring projects in Turkey, Kyrgyzstan and Serbia.

In mid-2006, Eurasian acquired its first two Haitian properties, La Mine and La Miel. The UNDP had documented epithermal gold mineralization on both properties. At La Mine, which is 50 km west of the port city of Cap Haitien and 15 km south of the Atlantic coast, the UNDP noted massive barite with gold, massive sulphides, and an extensive epithermal stockwork zone with attendant gold-bearing gossans. La Miel, which sits 65 km east of Cap Haitien along the Haitian-Dominican border, also boasted epithermal mineralization, in argillic alteration zones.

It wasn't long before Eurasian added to its Haitian holdings. In early 2007, the company picked up the 88-sq.-km Treuil licence, which is immediately south of La Mine. At Treuil, the UNDP had identified two copper porphyry targets within a north-south-trending zone of quartz-diorite intrusions.

By early 2008, Eurasian's efforts in Haiti had attracted interest from the major that had led them there in the first place: Newmont. Eurasian and Newmont soon signed two deals: a joint-venture agreement for La Miel and a regional strategic alliance framework. The La Miel JV deal gave Newmont the right to earn a 65% interest in the project by either completing a feasibility study defining a 3-million-oz. gold reserve or spending US$30 million on exploration. Eurasian will also receive a US$2-million bonus upon completion of the earn-in.

The bigger development, though, was the regional strategic alliance agreement. This means Newmont covers 65% of Eurasian's regional exploration costs in Haiti. Once Eurasian spends at least US$200,000 on a specific exploration area, which must be smaller than 500 sq. km, it nominates the area as a designated project candidate to Newmont. If Newmont accepts the project, the major pays back Eurasian's costs to date and can earn a 70% interest by completing a feasibility study or solely funding the next US$10 million in spending. If Newmont declines the project, Eurasian retains full ownership and can advance it independently.

And in defining the deal, Eurasian made Newmont's earn-in requirements for La Mine more stringent -- the major has to complete a feasibility study defining 2 million oz. gold or solely fund the first US$20 million in costs to earn a 65% interest in that particular project.

Once Newmont earns its 70% interest in a designated project, or 65% interest in the cases of La Mine and La Miel, Eurasian has a few different options. The junior can fund its share of spending; be carried by Newmont and maintain its interest less 5%, paying Newmont back with proceeds from production; let Newmont's spending dilute its interest; or give up the project in exchange for a 3.5% net smelter return royalty and an annual minimum royalty of US$1 million.

With the strategic alliance -- and its significant funding assistance-- in place, Eurasian stepped up its Haitian efforts. In late 2008, the company acquired 27 new exploration licences, all in northern Haiti, that cover roughly half of the Massif du Nord metallogenic belt. Eurasian's land position now stretches across northern Haiti along 130 km of strike, from La Mine in the northwest to La Miel in the southeast. The Massif du Nord belt continues across the border into the Dominican Republic, where it hosts Pueblo Viejo. In addition, Eurasian picked up the historic Meme mine south of Treuil, an underground operation that produced some 2 million tonnes of ore in the 1960s grading 2% copper.

To put it another way, Eurasian now controls more than 2,800 sq. km in Haiti, or 10% of the country.

The projects

One of the most striking aspects of Haiti, for a Westerner, is the almost complete absence of vehicles outside of urban areas. Very few vehicles mean very few roads; instead, the countryside is laced with walking paths ground into the red dirt.

To get to La Miel from Cap Haitien used to require a bumpy, six-hour drive, followed by a few hours on foot. Since starting work at the site in 2007, Eurasian has improved kilometres of road so now the drive takes just four hours.

Flying to La Miel in a helicopter gives passengers the chance to assess the Haitian countryside. Tales abound of the complete deforestation of Haiti, but the reality is that while many trees have been cleared, the result is extensive agriculture. Terraced rows of vegetables, primarily legumes, start at the bottom of each valley and extend up every slope that holds soil. The result is a landscape that is green, even lush.

Those tending the green fields live in mud huts with thatch roofs. Entire families, most of them barefoot, work the fields by hand. Children and grandparents gather firewood, tying the bundles with string and carrying them back on their heads, or haul water. When a helicopter touches down on a nearby hillside, almost everyone drops what they are doing to come and watch the vivitors tromp along the ridgeline looking at rocks.

La Miel is a 325-sq.-km property in eastern Haiti, along the border with the Dominican Republic. Regionally, geology consists of flysch sequences, felsic volcanics, and intrusive rocks within a 35-km-long trend of epithermal alteration.

The main zone at La Miel, known as Savane La Place, is a hill showing signs of strong epithermal alteration. Soil sampling over 5 sq. km identified a strong gold anomaly with associated copper extending 800 metres north-south and across 300 metres width. The strong anomaly sits within a larger, lower-grade zone covering more than 1 sq. km.

In 2007, Eurasian excavated and sampled 10 trenches at Savane La Place that all returned encouraging results. Encountering silicified, altered, brecciated volcanics, baritic breccias, and altered felsic tuffs and intrusives, the trenches returned such results as 243 metres of 1.71 grams gold, 72 metres of 1.9 grams gold, 150 metres of 1.03 grams gold, and 96 metres of 2.5 grams gold.

In addition, outcrop sampling has identified gold mineralization 500 metres northwest of the trenched area. The KL Ridge prospect has not yet seen trenching but Laskowski, after whom the area is named, is keen to get to work on it, in part because the soil anomaly at KL Ridge is three times the size of the anomaly at Savane La Place.

The area has not yet seen a drill, but the sampling and trenching results were enough for Newmont to negotiate an earn-in agreement for the project in 2008. Since then, the major has established a 25-person camp at the site and is preparing to drill. And drilling is certainly needed: Newmont's geologists are currently calling it a low-sulphidation system, but while the presence of mineralization is certain, the debate over its origin and style continues.

Getting started in an underexplored country is always a challenge. When Eurasian arrived in Haiti, the only geological maps available were regional-scale.

"We essentially had to start from scratch," Laskowski says. "But it's not hard to believe there's mineralization here when you can just see it all around you." At the time of our visit, Laskowski was Eurasian's Haitian exploration manager. Over the summer -- and after more than two years of spending half his time in Haiti -- he stepped down from that role, though he is still integral to Eurasian's Haitian operations.

Geologists may have been scarce in Haiti before Eurasian's arrival, but Laskowski recognized that another group of people held a vault of knowledge about the area's rocks: the locals. They work the land and walk everywhere they go, so rural Haitians are intimately familiar with their terrain.

................................................................................

Eurasian geologists offered the locals a deal. Anyone who brought them a green rock would get $2.50. If the finder could take a geologist back to where he or she found the rock, that was worth another $6.25. The system led Eurasian to map more than 400 mineral occurrences in the Treuil licence alone.

Trying to explore La Mine and Treuil, which are not road-accessible, has proven to be hard work. The hike in from the nearest road is at least four hours and the exploration camp consists of a couple of tents set up beside a rented mud hut. As for where to set up camp, the geologists developed a rule of thumb: when they spent more time in the day walking than working, it was time to move their camp. It's a system they have been following for almost two years.

And the terrain is unforgiving. The La Miel-Treuil trend contains the highest peak in the area, a mountain stretching to 1,400 metres elevation. Just 15 km north, the land meets the sea. Sometimes the terrain is so rough the team only manages to take 10 samples a day.

Now, after a few years of listening to locals and then scouring the steep hills for geological hints, the company has narrowed its focus at Treuil to three zones, dubbed Champagne, Bordeaux, and Chardonnay. Champagne is in the northwest corner of the rectangular property, Bordeaux is just east of centre, and Chardonnay is close to the southeast corner.

Champagne is a high-grade copper- silver target. Mineralization at Champagne occurs as chalcocite and bornite in a series of sub-parallel, north-south-oriented zones of veins and mineralized wall rock. Eurasian cut six trenches across the zones and the work returned some high-grade results.

The best exposure of Zone 1 returned 14 metres grading 19.15% copper and 140 grams silver. Outcrop chip samples from Zone 1 also carried high grades, such as 4 metres of 20.4% copper, 136 grams silver and 0.23 gram gold; and 2.8 metres of 25.3% copper, 184 grams silver and 0.31 gram gold.

Zone 2, which is 10 to 30 metres east, provided 9.5 metres of trench sample that assayed at 8.5% copper, 63 grams silver and 0.08 gram gold. Another Zone 2 trench cut 0.8 metre of 33.2% copper, 288 grams silver and 0.19 gram gold. And at Zone 3, a trench returned 1.8 metres of 8.1% copper, 68 grams silver and 0.32 gram gold. And all of the Champagne trenches remain open in both directions.

Champagne is part of the same 6km-long, northwest-trending structural zone that hosts Chardonnay, as well as 380 recently documented copper-silver occurrences, some with gold as well. The trend remains open in both directions.

The mineralization at Chardonnay is similar to that at Champagne. Copper, gold and silver are hosted in north-trending fault zones and adjacent deformed wall rocks. Since the terrain is steep, Eurasian's first sampling attempt involved only outcrop chip samples. Of the first set of 63 samples, collected over 1.3 sq. km, the average grades were 4% copper, 42 grams silver and 4.2 grams gold. The prospect covers the bottom and sides of a steep valley, with several parallel mineralized zones aligned on northwest-southeast axis.

And over at Bordeaux, which sits just east of the Champagne- Chardonnay trend, grades are similarly high but the style of mineralization differs. Here copper, gold and silver are hosted in veins near a fault zone; boulders also indicate the presence of porphyry stock-work mineralization. Eurasian collected 52 rock samples at Bordeaux over a 2-sq.-km area and the average grades were 2.66% copper, 18 grams silver and 0.5 gram gold.

"The grades at Treuil are amazing," says president and CEO Cole. "Everyone thinks we're a bunch of yahoos picking microveins with tweezers, but it's not like that. There are boulders of chalcocite in the streams. In almost any other place in the world, this project would have been mined by now."

North of Treuil is the La Mine project area. Exploration work, by the UNDP and then by Eurasian, has confirmed gold, silver and base metal mineralization at La Mine in three separate areas known as La Cour, Planton and Colombo.

At La Cour, which is in the north end of the licence, Eurasian is tracking a volcanogenic massive sulphide (VMS) target that outcrops intermittently along a 3-km-long trend. The trend hosts gossans, semi-massive sulphides, and massive sulphides across 3 to 40 metres width. Eurasian's best trench-sampling result from La Cour to date is 9 metres of 5.2 grams gold, 46 grams silver and 0.15% copper.

The promise at Colombo stems from a dacite stock measuring 700 metres by 250 metres. The dacite stock is coincident with a UNDP soil geochemical anomaly. Eurasian collected 77 rock samples; four samples averaged between 1 and 2.8 grams gold, while 20 assayed better than 0.25 gram gold.

And at Planton, it is a 100-metre-wide fault zone that hosts epithermal gold mineralization accompanied by intense jasperoid silicification. The zone has been traced for more than 1 km along strike and a 5-metre-wide rock chip sample returned 6.2 grams gold, 22 grams silver and 0.12% copper.

Peter Mitchell, Eurasian's lead field geologist in the area, points to La Mine and Treuil on a map and says, "I've never been anywhere in the world with as much metal in the ground as there is in these two squares." And this comes from a man with 35 years under his belt as a field geologist, working for majors and juniors all over the world.

In July, Eurasian's efforts and the promise inherent in La Mine and Treuil were validated when Newmont elected both as designated projects under the partners' regional exploration agreement. The major will now head up exploration at both sites, pursuant to its earn-in obligations.

Some 20 km southeast of Treuil, following the Massif du Nord trend, is another key Eurasian property: Grande Bois. The 50-sq.-km property covers fairly hilly terrain but one of Haiti's few highways runs right past, connecting to Cap Haitien in one direction and Port au Prince in the other.

Kennecott identified a high-sulphidation epithermal gold system at Grande Bois in the 1970s, drilling 10 holes. A few years later, a subsequent operator added another 11 holes to the Grande Bois database. Then, in 1983, the UNDP punched 51 holes into the system and hit mineralization in every hole. The effort produced a historic resource (not compliant with National Instrument [NI] 43-101) of 4.3 million tonnes averaging 2.24 grams gold and 14.92 grams silver.

The deposit is near surface, oxidized to 100 metres depth, and open in every direction. Newmont's geologists, who arrived at Grande Bois this summer, could not get over the fact that the deposit is the drill-hole database -- every hole drilled in the area thus far has hit significant mineralization and contributed to the deposit.

Work at Grande Bois to date has focused on the top and south flank of a hill. The deposit is almost circular, measuring roughly 300 metres by 350 metres. Mineralization is primarily hosted in a rhyolite tuff and barite is abundant. Only a few holes penetrated beyond the oxide boundary and they returned sulphide intercepts with promising copper grades.

Eurasian conducted a soil geochemical survey over the known deposit and at an area known as Rivage Ridge, which is the next hill to the west from Grande Bois. At Grande Bois, a gold-in-soil anomaly of greater than 1 gram sits directly on top of the known deposit, extending west towards Rivage Ridge, as well as east down the hill. And Rivage Ridge hosts two soil anomalies of its own, one measuring 620 by 200 metres and the other covering 920 by 200 metres.

Shortly after Eurasian acquired Grande Bois early this year, Newmont elected to take it on as a designated project. The major arrived at the project this summer and recently began drilling. Since every historical hole hit significant mineralization, Newmont and Eurasian are keen to try some expansion drilling. The first expansion targets are to the west, towards Rivage Ridge, and to the north, where geologists think the barite breccia might be down-dropped.

And some 30 km south of La Mine, Eurasian holds another piece of prospective land, one that it has not had the time to start exploring. The 186-sq.-km property covers the historic Meme mine and surrounding Terra Neuve mining district.

Meme was an underground mine in the 1960s. The operation produced some 2 million tonnes of ore grading 2% copper from five working levels accessed through a series of adits. Mineralization at Meme stems from three small intrusions at the southeast end of a northwest-trending structural zone.

In 1989, the UNDP assessed Meme's remaining potential and defined a historic resource of 1.5 million tonnes averaging 2% copper and 2 grams gold.

--Look for part 2 of this site visit in next week's edition of The Northern Miner.



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Photos



A helicopter lands at Eurasian Minerals' Savane La Place prospect, a hill at the company's La Miel project where trenching has returned up to 243 metres of 1.71 grams gold and 96 metres of 2.5 grams gold.
A helicopter lands at Eurasian Minerals' Savane La Plac...
A Newmont Mining geologist explains recent work at Grande Bois, a Eurasian Minerals property in Haiti. Newmont, which is carrying out a drill campaign at Grande Bois, has the option to earn up to 70% of the property.
A Newmont Mining geologist explains recent work at Gran...
The camp at Eurasian Minerals' La Miel gold project, in Haiti, that Newmont Mining built after electing to earn into the project.
The camp at Eurasian Minerals' La Miel gold project, in...


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