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Exploring mines in Elephant Country

November 28, 2007 15:52 IST

To say Haiti is underexplored is almost an understatement, according to Scott Close, head of investor relations at Eurasian Minerals.

The last producing mine - a copper operation - was closed in the 1970s and no one has explored for minerals in the country in about a decade, he said. Combine that with Haiti's proximity to the Dominican Republic, home of Barrick Gold's immense Pueblo Viejo deposit, and Eurasian has a recipe for success.

"It may be the only place in the world where we are hunting in elephant country," Close told Resource Investor, referring to Haiti's potential to hold world-class gold, silver and copper deposits thanks to its close location to Pueblo Viejo on Haiti and the Dominican Republic's shared island of Hispaniola.

"No one has explored there for about a decade," he said. "Â…Those are two combinations you just don't find (often)."

Eurasian began exploring Haiti in early 2006 with the acquisition of the La Miel and La Mine gold properties. Keith Laskowski, Eurasian's country manager for Haiti, worked in the country under Newmont Mining, but Newmont left Haiti when its political situation began to deteriorate in the mid- to late-1990s.

Laskowski kept his eye on Haiti, however, knowing that the "political tide would turn there, and the geology was so promising," Close said.

"(Laskowski) liked Haiti quite a bit."

The political situation is much more stable now with President Rene Garcia Preval in office, according to Close. Preval, who worked with the Minister of Mines and Energy in the 1970s, is receptive to exploration and mining.

Eurasian's decision to enter Haiti last year is consistent with its past activities of going "into places that may have been overlooked because of the political situation in the past," Close said. He cited the example of Eurasian's operations in Serbia, where the land was cheaper because of political instability. The company recently sold its Serbian assets to Reservoir Capital Corp.

La Miel and La Mine

Often when you hear "United Nations" and "mining" in the same sentence, it is not always good news for the miner. But Eurasian is actually using a past UN study to its advantage.

The company's La Miel and La Mine properties were explored under a United Nations Development Programme in the 1970s. The program is intended to "kick start" an underdeveloped economy by offering training programs and grants and encouraging industries like mining and forestry.

Much like government-run geological surveys in the US, "the UN has their own organisation that explores for minerals in underdeveloped countries," Close said.

In Haiti, the UNDP reported "epithermal alteration and mineralization" at La Mine in a 7-kilometre by 1- to 2-kilometre area holding trench sampling results up to 17 metres at an average grade of 7.6g/t gold, according to Eurasian's website.

At La Miel, the UNDP found three areas with rock samples holding epithermal mineralisation up to 3.7g/t gold and a geochemical anomaly holding a 2-kilometre long gold-in-soil.

Close said the UN publishes geological results to bring companies into countries where the economy could use a helping hand. Should a large deposit of gold be found and developed in Haiti, "(Eurasian) would bring in a lot of new revenuesÂ…new prosperities with new jobs and new infrastructure," he said, including roads, electricity and possibly school and hospital.

"The UN obviously recognizes that and collects data for anyone who would like to review it and use it," Close said.

Since Eurasian began its exploration program in 2006, the company has identified inconsistent levels of gold, silver and copper mineralization over 500 metres vertically and 1.7 kilometres of strike length at La Mine. Two rock samples from silica cap outcrops were found to hold 6.49g/t gold and 238g/t silver and 2.49g/t gold, 40.4g/t silver and 0.30 per cent copper.

At the 324.5-acre La Miel property, Eurasian recently outlined a northwest trending, 1.2-kilometre by 0.9-kilometre area of irregular gold mineralization in volcanic rocks with a grade greater than 0.02g/t. Results from six trenches totalling 1,127 metres of sampling include 243 metres with an average of 1.71g/t gold, including a higher grade sub-interval of 69 metres at a grade of 3.93g/t gold.

La Mine and La Miel's close proximity to Barrick's Pueblo Viejo is encouraging, according to Close. Pueblo Viejo holds proven and probable reserves of 18.1 million ounces of gold. The mine, which has an approximate life of 20 years, also holds 2.6 billion pounds of zinc, 358 million pounds of copper and 88 million ounces of silver, according to Barrick.

In addition, the close proximity could lead Barrick to take an interest in a potential joint venture with Eurasian, though Close declined to speculate on that option.

But a joint venture in Haiti is in the game plan for Eurasian, he said, and the company has already "drawn watchful eyes."

"We certainly have had interest in the property."

Eurasian closed up one cent at C$1.60 today on the Toronto's venture exchange. With a market cap of C$38.27 million and additional exploration projects in Turkey, the Kyrgyz Republic, Romania and Macedonia, the company has traded in a 52-week range of C$1.16 to C$2.50.

Jane Louis, St. Louis (