Jet and Leeward head for the exit in Myanmar

Just as the U.N. is finally being allowed in to Myanmar, two Canadian exploration companies are getting out.

On Sept. 28 Jet Gold (JAU-V) and Leeward Capital (LWC-V) announced they were abandoning the Set Ga Done gold property because of increasingly inflexible and bureaucratic rules imposed on their operations.

Jim Davis, president of Leeward, says the bureaucratic nightmare began to worsen two years ago when the deputy minister of mines lost his power to incoming Brigadier General Ohn Myint.

After the deputy ministers departure it became silly it was the beginning of the end, Davis says. We were hoping against hope that (Myint) would come around but that never happened. Then with the protests, it was the perfect excuse to run.

Those protests have lead to the death of 10 protesters, according to the ruling junta, but groups in the country say the number is closer to 200, many of them Buddhist monks, with some 6,000 people detained.

The mass pro-democracy protests had their genesis in smaller fuel price protests which began after the junta ended subsidies and let fuel prices rise to the international markets prices an increase of 500% that was too much for the populace to handle.

But the dire state of the country isnt what inspired the companies to leave. Both Card and Davis say their departure was in the works months before the violence broke out.

The companies had stopped spending money on the project back in January, and were looking to turn exploration costs over to privately-owned Quad Energy who had signed a deal to earn 51% of Jet Golds and Leewards interest by spending US$700,000 on exploration.

When that deal fell through over a month ago, there was little else for the companies to do but walk away leaving the site to fall back into the control of the government.

Theres nothing wrong with the mineral potential and its a beautiful country with beautiful people but the government is a pain in the ass, Davis says on phone from his office in Calgary.

As for pundits who will read the two companies losses as just desserts for doing business in a tainted military state, Card and Davis have a different view.

Were not going to stop the junta. Were not going to have that kind of influence. But if were there on the ground at least we have some input to help people and indirectly influence the government, Card says. You cant if youre just sitting at your desk in North America sniping at them.

Card estimates that his company had sunk $300,000 to $400,000 into the country, but both he and Davis expressed little regret about investing time and money in the country.

We tried and it didnt work. Its no use, Card says. We recognized when we went in there that it was a different place to do business.

Davis was the first of the two to arrive in Myanmar, touching down back in 1996. Ready for the challenge he quickly set up an office run by Myanmar nationals, and established what he describes as a good relationship with the minister of mines.

Shortly thereafter Leeward acquired a 75% interest Set Ga Done, with the government taking the remaining 25%. In 2003 Jet Gold acquired half of Leewards interest by providing at US$50,000 application bond and funding the first US$150,000 of exploration.

Local miners were the first to discover gold at Set Ga Done back in 1989. Early work done by the companies indicated that a robust discovery could be in the works as field exploration in 2004 revealed two parallel gold zones to the south of the Set Ga Done gold zone.

While an early drill campaign returned one intersect of 9.8 grams gold over 4.77 metres, along with indications that beyond the known high grade gold vein the site may also host a Carlin-style sediment hosted gold deposit, further drilling ran into obstacles that proved to arduous to overcome.

With only one drill in the country, the joint venture decided to import a rig and crew, but the simple request was held up in the halls of government for over a year and a half, leaving the companies with much frustration and very little understanding of the deposit.

People say youve got to pay someone off to get anything done but you cant pay off anyone. Everything is done by committee. There were 26 separate groups that had to approve us getting the concession in the first place, Card says.

As for what they believe the future holds for the internationally condemned junta, Davis says the key factor is the hulking neighbour to the east

Theres only one country that can cause regime change, Davis says and thats China. If it gave the nod then it would happen. All Burma really is a vassal state of China. What the Chinese want, they get.