LATIN AMERICA — Eaglecrest drills San Simon property in Bolivia

Junior explorer Eaglecrest Explorations (EEL-V) is hoping that perseverance, new management and a new geological model will pay off at its San Simon gold property in northeastern Bolivia.

Situated 500 km from the capital city of La Paz, Eaglecrest started work on the 7,000-ha highland plateau property in 1994. The area has a history of small-scale gold mining, with activity currently concentrated in the Trinidad, Paititi and Buriti areas.

Between 1994 and 1996, the company performed mapping, trenching, soil sampling, geophysical surveys, bulk sampling and limited diamond drilling. Eaglecrest’s primary targets were the Paititi and Trinidad small-scale mining areas.

At Paititi, locals have mined an area 550 metres long by 50 metres wide by 6 metres deep. The mineralization is hosted by argillized and silicified quartzites and occurs as northeasterly trending, shallow-dipping quartz stockwork averaging 80-100 metres in width. The mineralized system is exposed over a 600-by-125-metre area.

A 10-hole program on the Paititi pit in 1996 returned lower-than-expected gold values, with intercepts ranging from 0.48 gram per tonne over 32 metres in hole 1 to a high of 1.8 grams over 25.6 metres in hole 9.

The Trinidad vein lies 6 km west-northwest of Paititi. Mineralization occurs in an east-westerly trending, shallow-dipping quartz vein emplaced in sedimentary rocks. The vein has been traced intermittently for 4 km along strike. At the small-scale mining sites, the vein averages 3 metres in width and grades 6 grams gold.

Adjacent to the vein is the Rosa stockwork zone, exposed over a 250-by-50-metre area.

In 1996, Eaglecrest drilled 25 holes into the vein-stockwork zone. The best intercepts from the Trinidad vein include 17.3 grams gold over 7.2 metres in hole 1 and 8.1 grams over 7.9 metres in hole 12. The best result from the stockwork zone was 3.6 grams over 8.9 metres in hole 6 and 2.9 grams gold over 9.1 metres in hole 5.

By 1997, a plummeting market for junior gold companies combined with lower-than-expected gold grades from drilling led Eaglecrest into financial trouble. It was not until late 1998 that a financial and managerial restructuring allowed the company to begin evaluating the results from San Simon.

The new managerial team is led by President Gary Cope with, as directors, Western Copper Chairman Dale Corman, Robert Gayton, R. Janowsky, Lawrence Page, Robert Swenarchuk and Thomas Patton. George Cavey is exploration manager and Arthur Freeze, project manager, at San Simon.

Armed with a recently completed $1.2-million private placement and a 100% interest in 21,000 ha of the Precambrian shield in northeastern Bolivia, the company has re-evaluated all the past exploration activities. The result is a new geological model for the gold mineralization at Paititi and the identification of new gold targets.

The current drill program is testing the near-surface, bulk-tonnage gold target that extends westward for 3 km from the Paititi pit towards Buriti. The anomalous zone is based on extensive soil sampling and a coincidental induced-polarization geophysical anomaly. Based on a reinterpretation, the company believes the auriferous veins in the Paititi zone do not dip vertically but have been folded and rotated sub-horizontally, creating ideal stockwork conditions for low-cost bulk-tonnage open-pit mining. To date, 880 metres of the 2,500-metre drill program have been completed.

Eaglecrest has completed two drill holes into the Paititi pit, while three holes were abandoned in the mineralized zone because of bad ground conditions. Five reconnaissance holes have been completed over a 2-km area west of the Paititi pit.

Although assay results are pending, the company is particularly encouraged by a 1-km stepout hole from Paititi pit. The hole is reported to have hit quartz vein stockwork throughout its entire 138-metre length.

Eaglecrest holds a 100% interest in the San Simon property. At production, a 3% net smelter return royalty is payable to the vendor.

The company is also seeking new gold targets in the San Simon plateau. In June, Eaglecrest acquired a 13,851-ha property 10 km north of Paititi. The exploration target is a 12-km-long quartz-pebble conglomerate horizon that reportedly contains visible gold in the matrix and in the quartz pebbles. This horizon is associated with elevated uranium stream-sediment anomalies and a weak airborne radiometric geophysical anomaly.

Eaglecrest can earn a 100% interest in the property by issuing 200,000 shares, spending US$300,000 on exploration and paying the vendor US$100,000 after two years.

To fund future activity, Eaglecrest is negotiating a private placement of up to 4 million units priced at 50 cents each. A unit consists of one share and one half-warrant exercisable at 60 cents for one year.