-- Note: Part 1 of this story was published last week, in the Oct. 5-11/09 edition of The Northern Miner.
CAP HAITIEN, HAITI-- When something goes wrong here, or takes three times as long as planned, or is far more complicated than it should be, the Eurasian Minerals (EMX-V, ESMNF-O) team has a saying: TIH. It stands for "This is Haiti" and it is a nod to the country that hosts Eurasian's La Mine, La Miel, Treuil and Grande Bois gold properties, and the challenges that come with working here.
Haiti is, after all, the poorest country in the Western Hemisphere. Eighty percent of Haiti's 9 million inhabitants live on less than $2 a day and 54% are considered abjectly poor. Seven in 10 people are unemployed, two-thirds depend on subsistence farming for their food, and more than one in five Haitian children dies before the age of five.
The city of Cap Haitien is bright, busy, and falling apart. Wastewater runs down gutters on the sides of the road. There is garbage everywhere. Vendors line the streets, selling everything from used car batteries and old tires to plantain chips and chickens. There are more potholes than cement and concrete buildings lean precariously on one another.
And the country keeps getting kicked while it's down: last year, violent food riots helped topple the prime minister and four tropical storms left 800 people dead and caused $1 billion in damage.
Progress is slow, but there are promising signs. In April, an international coalition of countries pledged a combined US$335 million to help Haiti recover from the battering of 2008. And United Nations Secretary-General Ban Ki- Moon appointed former U. S. president Bill Clinton as UN special envoy to Haiti, with the mandate of helping to improve life for Haitians.
Of significance, in May three international organizations -- the World Bank, the International Monetary Fund, and the Inter- American Development Bank -- cancelled US$1.2 billion of Haiti's debt, erasing nearly two-thirds of the country's outstanding loans. Until the cancellation, Haiti had been paying roughly US$1.6 million each month to the World Bank.
Much of the country's debt dates back to loans that did little more than line the pockets of its dictators, especially the father-son team of Francois "Papa Doc" and Jean-Claude "Baby Doc" Duvalier who ruled consecutively from 1957-86. Tenuous gains achieved in earlier years were more than erased during the Duvalier years.
Haiti was added to the debt cancellation program for heavily indebted countries in 2006. It took almost three years to achieve because the organizations required Haiti to implement several reforms, including auditing government accounts, adopting a law on public procurement, strengthening tax and customs administration, and debt reporting. The country also had to implement an AIDS prevention and treatment plan, finance school tuition for children, and improve immunization rates.
Despite improvements in some areas, security remains a constant concern. There has been a United Nations force stationed in Haiti since 2004, after an armed rebellion led to the forced resignation and exile of president Jean- Bertrand Aristide. An interim government organized new elections under the auspices of the United Nations Stabilization Mission, which eventually took place in 2006 and elevated René Préval to president.
But the UN force remains, its departure date extended for a year every year, as it has not yet achieved its mandate to stabilize the country. Port-au-Prince is considered one of the most dangerous cities in the world; gangs control the slum area known as Cité Soleil. But in the countryside in and around Eurasian's properties, the feeling is not one of insecurity but rather a curiosity about the outside world and a desire for work.
Eurasian and Newmont employ some 300 local Haitians. They only need about 100 at any given moment but people work on a rotating schedule to spread the benefits of employment -- the main thing that's lacking in Haiti. When Haitians approach white people in the countryside, jobs are the main thing they want. The country used to have several thriving industries -- sugarcane, manufacturing, bauxite, coffee -- but for various reasons, each evaporated and left nothing behind.
For Eurasian, that means the reestablishment of a mining industry in Haiti would be more than welcome, in the eyes of the government and the rural population. The company is already overwhelmed with locals looking for work. And so far, the company has had good experiences in dealing with the government, though each move requires a lot of time as these sorts of agreements have not been negotiated in over a decade. Eurasian wanted to be a first mover, and it's getting what it asked for and more. But what else can you expect? After all, TIH.
Haiti isn't in Eurasia
Eurasian is well aware that Haiti is part of neither Europe nor Asia. The company does, however, have several other projects on the go that do suit its name, located in Turkey, Kyrgyzstan and Romania.
The Akarca project in western Turkey's Anatolia region is a grass-roots gold-silver vein discovery. Exploration in 2006 and 2007 delineated three vein systems within a 1.2-sq.-km area. Eurasian has completed core and reverse-circulation drilling at Akarca and been rewarded with broad zones of mineralization, including 63.7 metres grading 1.54 grams gold and 14.52 grams silver per tonne.
In 2009, exploration efforts at Akarca identified one gold-silver vein in the main target area, known as Fula Tepe, as well as two new mineralized zones, Arap Tepe and Baglarbasi Tepe, that sit 3 km east of the main zone.
The Fula Tepe vein has been traced for 260 metres of strike and averages 10 metres in width. Like other veins on the property, Fula Tepe shows low-sulphidation epithermal textures. Eurasian collected more than 50 samples from the vein, which returned average grades of 1.78 grams gold and 15.25 grams silver.
Over at Arap Tepe, mapping identified two mineralized zones that both strike for 100 metres and stretch across 1 to 3 metres width, as well as a large outcrop of quartz veining. And at Baglarbasi Tepe, 400 metres west, a 200-metre-long vein zone produced samples grading up to 2.1 grams gold.
Eurasian also owns the Elmali property, in the Biga Peninsula region of western Turkey, where gold-silver mineralization occurs in low-sulphidation quartz veins developed along a contact between rhyolite and marble units, as well as in a chalcedonic silica cap breccia. Rock sampling by a previous owner returned grades as high as 20 grams gold and 10.6 grams silver. Eurasian drilled four holes at Elmali in 2008 targeting two vein zones; one hole returned 6.1 metres of 6 grams gold. In 2009, the company completed a sampling program in which 203 rock samples yielded an average grade of 1.13 grams gold.
Work at Elmali and Akarca is being funded by Eurasian's joint-venture partner Centerra Gold (CG-T, CAGDF-O).Centerra can earn a 50% interest in the properties by spending US$5 million on exploration over four years and then paying Eurasian US$1 million. Centerra can then boost its interest to 70% by spending another US$5 million.
Eurasian's other main Turkish project is also a joint venture, this time with Chesser Resources (CHZ-A). Eurasian and Chesser are exploring the Sisorta property, a 27-sq.-km area in Sivas province, in north-central Turkey. The property hosts altered volcanic and intrusive rocks with zones of hydrothermal brecciation and silicification, all consistent with a high-sulphidation system.
From reassays of historic drill core and four small drill programs, Eurasian has established an initial resource estimate for Sisorta.
The project now hosts 3.17 million indicated tonnes grading 0.89 gram gold, as well as 11.4 million inferred tonnes averaging 0.58 gram gold. Some 76% of the indicated count and 73% of the inferred count comes from near-surface oxide mineralization that is amenable to heap leaching.
Chesser recently fulfilled its obligations and earned a 51% interest in Sisorta by spending US$4 million on exploration and paying Eurasian US$400,000 and 3 million shares. The company is now deciding whether to increase its interest to 70% by solely funding exploration up to the release of a feasibility study or to move to a co-funded joint venture with Eurasian at their current ownership levels.
Eurasian's third country focus is Kyrgyzstan, where the company is exploring two properties. The Gezart licence, in southern Kyrgyzstan, is home to the Orgatash gold prospect, while to the east, the Akoguz licence hosts quartz stockworks, veins and silica replacement zones.
In recent years, it is the Gezart licence that has seen significant exploration activity. Diamond drilling at Orgatash in 2008 returned such intercepts as 42.3 metres of 1.48 grams gold and 45.6 metres of 1.18 grams gold, both starting at surface. Trench and channel sampling also returned strong results, including 62.4 metres of 1.75 grams gold and 65.8 metres of 1.77 grams gold. The Orgatash mineralized footprint now stretches 800 metres along a northwest strike and across 400 metres width. And regional exploration has recently identified a new intrusion-hosted gold zone some 9 km west of Orgatash, where channel sampling returned 14.3 metres grading 1.21 grams gold and 13.7 metres of 1.64 grams gold.
Finally, Eurasian is also exploring in Romania. The company holds two properties: Sopot, which is in southwestern Romania and is prospective for porphyry- hosted copper, and Caraci- Birtin, which is a historic gold mine in west-central Romania.
Eurasian has $8 million in the bank. While that may not be a lot of money, given that the company is exploring some dozen projects in four countries, the company's bank balance has remained surprisingly steady over the last few years. Credit for that goes to president and CEO Dave Cole, who has negotiated joint-venture deals that usually require a new partner to repay Eurasian's expenditures at a project to date and cover exploration spending for several years. In 2008, for example, the company's partners spent $7 million on Eurasian's properties.
"I'm an other-people-spend-money- on-my-projects kind of guy," Cole says.
Eurasian's share price moved between $1.10 and $1.50 over the summer, closing recently at $1.35. The company has a 52-week trading range of 51¢-$1.74 and 29 million shares outstanding.
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