Eaglecrest Explorations Interview Transcript with Hans Rasmussen

Harry Norman:  Hello this is Harry Norman, for Proactive Investors and welcome to another Proactive audio interview.  Today is 13th January 2010 and I am talking with Hans Rasmussen President Chief Operating Officer and Director of Eaglecrest Explorations listed on the TSX venture exchange metals and mining sector.  Stock ticker EEL, share price C$0.54; market cap 20.2 C$5 million; web address: eaglecrestexplorations.com. Hans, thank you very much for joining us for this interview.

Hans Rasmussen:  Thanks for having me.

Why is a geophysicist and geologist such as yourself, looking for gold in Bolivia and Columbia?
Well I’ve been in the business for 26 years now and most of my time has been spent in the Americas and I feel very comfortable, I’m almost bilingual and the potential for discovery is going to be in places that have been looked at the least. Two countries that represent that would be Bolivia and Columbia, there are others in South America, but these are two places I feel very comfortable working in. They have high potential for discovery, particularly if you look at the history of production of metals, both of them have 500 years of history of metal production so that’s why I like these places.
What progress has been made at Eaglecrest Exploration’s San Simon gold project in north eastern Bolivia and what ideas do you have about how this project could be commercialised?
I’ve been involved with Eaglecrest since January 2007 and we’ve made very significant progress in understanding how gold is distributed in the known zones of gold mineralisation. That was huge, that was a big turnaround for the company in terms of actually coming closer to a resource calculation.  And we were producing gold at the same time as we were drilling on the [Dona Amelia] zone at the project.
So two things have come together there that lead to what we would end up commercialising. Number one is we can find more gold because we know where it is, how it’s located, how to drill it.  And number two, we know how to produce it.  We know [from our production experience] that it has great metallurgy 85 to 95% of the gold can be recovered because we had a gold processing plant working for almost two years and we were producing a gold concentrate from the rock that we were pulling from the underground.
So commercialisation from my point of view, is selling the asset to a producer.  Our goal at Eaglecrest is to be an explorer, to drill out gold resources, to pave the way for a producer to come in and buy the asset and go into production.  We’ve only had time, in my three term at Eaglecrest so far, to work less than 20% of the property and within that 20% of the property I feel like we have very strong indications that we have potential for three different areas with economic gold mineralisation.  Of course to prove that, we’ve got to drill, that’s the next step for Eaglecrest.

What are your thoughts on operating a mining exploration and development company in Bolivia, Hans?
Going back to the places in the world where there are producers operating, Bolivia is one of those places that producers are operating. I am in very good communications with Coeur d’Alene, who put the San Bartolome mine into production. And if you look at their release last November I think it was, or December, they comment how the government was very supportive. They’re making silver at about C$6 an ounce, which is highly profitable, in a historic district with lots of headaches, you know, where you’ve got lots of people to deal with. They were able to go into production and the government was very supportive.
The same [support from the government has occurred] for some of the other big projects that happened in Bolivia, you looked at the San Cristobal project where Apex silver put that into production with the help of Sumitomo, now Sumitomo is mining there.  The latest new project that’s going into production is called Mutun and Jindal, an East Indian Company, will invest C$2.1 Billion to mine half of the Iron ore deposits there.  So, it’s a pro-mining culture, I think that mining operations and developments are possible in Bolivia.  You just have to have a good relationship with the government, like in any Latin-American country.

What can you tell investors about your recent acquisition, Fredonia, in the Central Cordillera Gold Belt of Columbia?
The Board of Directors have Eaglecrest decided that Columbia was a great place to diversify Eaglecrest in terms of having multiple exploration properties and diversifying in this fantastic gold market that we’re coming into.  Columbia, historically has been the largest gold producer in the South America, so that was geologically a great place to think about and just in the last five or six years let’s say, stability and safety of the company has become significantly better than it was even in the late 1990s.
So, we decided, okay this is the place to explore and the Fredonia was selected because it’s close to infrastructure and in and around the Fredonia area you’ve got some resources that have been drilled out that are about 2 million ounces, and you’ve got a couple of historic districts with well over ten million ounces of both historic production and ounces of gold that’s still in the ground.  So the Fredonia area for me was a large real estate play, in terms of getting our foot in the door in Columbia, grabbing 18,000 hectares or 180 km² of mineral title in an area that’s highly prospective.
What are your thoughts on operating in Columbia, Hans?

My understanding right now of Columbia, it is a very pro-development culture.  Of course we’ve got some examples now of people operating there that will go into production in the near future, like AngloGold-Ashanti at their 12 million ounce La Colosa gold project.  And, you’ve got some new drill results from others like Ventana Gold -- that are also kind of a hot topic on the street right now. 
Those guys [Anglo] are going to be going into production in the next five years and from what I understand they’ve got great relationships with the government and the government is pro development.  So, from what I can tell, gold mining is part of their culture and the mining law is upheld in court.  So there’s no question about whether or not you’re going to be able mine, it’s just you’ve got to follow the legal steps in order to achieve the mining permit and things like that along the way.
Eaglecrest Explorations has just closed a non-brokered private placement raising nearly C$580,000, where does this leave the company’s financial situation going forwards, Hans?
Well, at this stage we have a burn rate with our Bolivian operation and our Columbian operation of about $150,000 a month.  So if you just do the math on that you’re looking at about 3 months earn in that financing.  We open and closed this financing really quickly, because we had an interested investor that was an institutional investor that we wanted to Eaglecrest right away.  So that was open and closed before Christmas.  And, something that is very difficult to do, literally at the meeting with that investor was somewhere around December 11th and the thing was closed 14 days later.

So, that was a very small [equity] placement compared to what we were seeking but we basically wanted to open and close it for that particular investor.  We’re going to continue to look for more financing, we’re going to need about C$4 million a year in terms of total burned, if we want to start drilling in Bolivia, once we start drilling in Columbia then we’re going to have to bulk that up even higher.
When did Sprott Asset Management become investors in Eaglecrest Explorations and has their investment encouraged other institutions to take an interest in the company?
Yes, Sprott Asset Management was the lead order of the CAD$580,000 placement that we just closed.  And again, they are interested in getting involved with Eaglecrest, they’ve met management and they like the idea of both Bolivia and Columbia, and gold.  Today we’ve basically gotten through the paperwork of the placement and not had a chance to spend much time marketing the fact that Sprott is in.  So, we haven’t had a chance to see if their investment will encourage other institutions. 
Now, on that same note, in Fall 2007, Doug Casey personally, and his hedge fund and a couple of his employees, invested in Eaglecrest just based on a [personal] tour of our Bolivian operation.  And we’ve had institutional investors and that really helped the story.  Doug of course, by word of mouth, I’m sure helped get other investors in that bought shares in the market.  We will hopefully use Sprott Asset Management for both shares in the market and to encourage his friends and his connections to get involved in terms of more financing for Eaglecrest in the future.
What can investors expect from Eaglecrest Explorations over the next 12 to 18 months, Hans?
That’s a great question and great timeframe. We’re going to basically move forward aggressively with Columbia, looking at multiple new projects to add that will kind of, fill in gaps in the new Fredonia block we’ve signed on in Columbia.  We’re going to hire a person that will be our vice-president of explorations to move that program forward aggressively. That [the exploration program] starts with basic geology, geophysics and then eventually drilling in Columbia say after mid-year.
The Bolivian operation is totally dependent on investors.  We are waiting for enough funding to start drilling.  At this time, we’re trenching, we’ve got a staff of four Bolivian geologists and one senior person [US geologist] that’s going to be oversee exploration on the project, doing trenching, mapping and preparing for drilling once we get the financing.
So, basically you could expect in the next 12 to 18 months, once we get enough funding, we can drill immediately in Bolivia, we’ll be drilling after mid-year in Columbia. In Bolivia, we can have resource calculations by the end of the year on possibly two of our three target areas, one being underground [resource] and two of those being open-pit style resources. 
So we’re really ready to move forward aggressively—during the last year and half, funding has been the thing that’s controlled [slowed] the rate of moving forward with any exploration company.  We feel really strong about the [Bolivia] project, [because] we’ve had a chance to do a lot of basic geologic work in Bolivia, and we feel very strong about our new acquisitions in Columbia.

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