VANCOUVER, BRITISH COLUMBIA--(Marketwired - Nov 19, 2013) - Eagle Star Minerals Corp., (TSX VENTURE:EGE)(ELGSF)(E6R.F) ("Eagle Star" or "the Company") is pleased to release a letter from President & CEO Eran Friedlander.
It is with my greatest pleasure to reach out to you today in order to acknowledge your interest in the Company while recognizing significant milestones we have achieved together with the help of your support. With our maiden resource as part of the long anticipated, initial NI 43-101 report right around the corner, I have decided to take this opportunity and lay out to you the strategy that we have carefully crafted in house to ensure maximum leverage of Eagle Star's unique circumstances (significant land exposure along the phosphate belt of Brazil, strong geological outlook and premium location at the heart of what is the world's largest agricultural region) as the company aims to become a dominant force active in Brazil's booming agricultural sector.
The commencement of an aggressive drill program at Bomfim, a strategic land acquisition and recruitment of experts with specific knowledge of how to produce and sell phosphate based fertilizers in Brazil are just a few examples of measures taken recently by the Company in its quest to fulfill its goals. As a shareholder you would have noticed our Bomfim Project taking center stage over our other projects throughout the past year. The reason for this shift in focus is our belief that Bomfim's similarities to the adjacent MbAC Fertilizer's ("MbAC") Itafos Mine, in terms of geology, ore types and near term production possibilities are striking and therefore present an opportunity too good to delay.
From day one of our involvement in the Bomfim project our exploration strategy was based on closely following our proprietary geological model whilst trying to identify areas of phosphate mineralization along the phosphate belt. This model led us to the discovery of nine (9) such targets. To date, two have been followed up with further investigation and both have successfully returned excellent results of high quality phosphate at or close to surface. All targets share the same characteristics including what is especially important from our perspective - large outcrops of high-grade mineralization. Why is that important? High-grade mineralization allows us to fast track our way into production bypassing large capital commitments and long production lead times. Subsequently, this would accelerate value creation and result in significantly less dilution for our shareholders.
Following in the footsteps of our mining neighbor MbAC and its predecessor Itafos, we know that crushed outcrops of high-grade phosphorite can be sold within the close vicinity of our project area as direct application natural fertilizer. Same as in the case of both these companies, we intend to start producing at Bomfim as soon as possible so that we can generate enough cash to inject back into exploration and then eventually towards development of a larger scale production facility. Most recently, MbAC has ceased operation of its direct application natural fertilizer facility allowing Eagle Star and its shareholders to take advantage of a unique opportunity whereby a market has already been created. At a very low cost of approximately 2 million dollars we can build a similar facility to extract and process high-grade material similar to the one operated by MbAC and sell it to local farmers who are using this product as a partial substitute to the standard, more costly NPK blend.
Our plan for early production at Bomfim should help explain why over the past few months we have focused our drill program on quantifying outcropping high-grade phosphorite at already identified targets throughout the Bomfim project. At the South East portion of Bomfim Hill ("PZE-South") ease of access and a successful pit opening campaign were important considerations when it came to selecting the first target to be drilled. Drill results have clearly indicated high-grade, at surface mineralization that seems to extend to the targets located at the North ("PZE-North"), Central ("MSZ") and West ("PZE-West") portions of the Bomfim Hill. We are therefore confident that Bomfim Hill alone with its four separate sub-targets, represents a very lucrative opportunity in terms of near term production and that it in turn, will greatly benefit our shareholders.
Same as at PZE-South, the combination of a few factors such as ease of access, positive results from scout drilling and a subsequent pit opening campaign revealing high-grade at surface has led us to drill Target A1 ("Amaury") next. The small drill program here proved also to be a success as we recorded multiple high-grade drill intercepts at or close to surface including drill hole AM-RC-10 intersecting 18 meters of 15% P2O5 from surface. With two successful drill programs in hand, we are well on our way to proving a significant resource of high-grade phosphate mineralization in arguably the world's most strategic location from a fertilizer consumption perspective.
Though the discovery and development of high-grade phosphate is a priority for us, we believe that similar to our neighbor MbAC, lower grade phosphate is also abundant in Bomfim especially in areas that reside close to the phosphate belt. So while in the short to mid term we intend to produce fertilizers from higher grades of phosphate that require very little processing, we know that in the longer term we will look to integrate the lower grade/higher volume mineralization into our production plan as this will increase sustainability and growth of our future operations. To do so, we will have to invest in a flotation plant and other facilities that will allow for the conversion of the lower grade material to fertilizers. To that end, we have started flotation tests on representative lower-grade material from Bomfim. We hope that with the results from these tests (that we expect soon) we would be able to prove the full cycle of planned production that will paint a clear picture to our investors as to how we plan to further monetize our Bomfim asset.
Whilst we are very pleased with the land package we have managed to accumulate to date, we are always on the lookout for additional acquisition targets in the vicinity of our project areas that can add significant value to our portfolio. Our latest acquisition - Santiago, is a perfect example of this approach, as in our mind, it is one of the most strategic phosphate claims in Brazil. Formerly owned by Vale, this new claim has been on our radar screen since day one as it resides directly between the original Bomfim claims and MbAC's largest and highest grade ore body - "Canabrava". Work performed just recently by our technical team has revealed very large high-grade outcrops that plateau over the property's boundaries in addition to substantial evidence that suggests a possible extension of the Canabrava ore body into our new concession area. Our belief is that this occurrence is a good indication to the presence of both high-grade and lower grade mineralization in large volume and thus why we have just begun drilling our Santiago target so we may better test the extent of this high-grade outcropping phosphate and inevitably update the soon to be published NI 43-101 technical report as early as Q1 2014.
As the company continues to develop so too does our team. Our goal is to be a producer in 2014 so it was important for us to recruit the specific knowhow to make sure this goal is met. Hence why we added two very strategic gentleman as of late - Edvaldo Guimaraes most recently worked as the Sales and Marketing Manager for MbAC's direct application natural fertilizer production plant. An agronomist with over 20 years of agricultural specific experience, Mr. Guimaraes maintains strong relationships with farmers across Brazil and specifically surrounding the Bomfim claims where he has already been successful in securing 60,000 tonnes of direct application natural fertilizer orders for supply in the 1st half of 2014. Around the same time we were also able to contract Tiago Pereira, formally the Chief Mining Engineer for MbAC's direct application fertilizer plant. Mr. Pereira was instrumental in the design, implementation and day to day operation of this facility. He will play a key role in Eagle Star's plan to duplicate that same strategy that was successful for MbAC.
We are strongly convinced that Eagle Star, and yourselves as shareholders, have a bright future ahead. The fundamentals necessary for success have been put in place - team, assets and proximity to marketplace. Many catalysts exist for Eagle Star right around the corner including multiple resource calculation updates, near term production not far behind in combination with more drilling, flotation and further technical testing of the ore, all of which position Eagle Star and its shareholders in a very unique place from a risk/reward prospective with huge potential upside. We also expect a few significant developments with relation to our two other projects - Samba and Ruth, which I have not covered in this letter to you today, but do expect to communicate these developments to you in the near future as they materialize. We look forward to continue advancing the Company with your support, as we are certain that at this stage every bit of that progress will uncover significant value to you, our shareholders.
ABOUT THE COMPANY
Eagle Star Minerals Corp is a publicly listed company focused on the acquisition, exploration and development of agro-mineral properties in Brazil. Over the past two years, Eagle Star Minerals has strategically grown its' presence in Brazil and continues to focus on maximizing shareholder value by acquiring assets located in geological areas known for proven phosphate mineralization, coupled with good logistics in close proximity to agriculture.
The Company's shares are publicly traded on the TSX Venture Exchange under the symbol EGE, on the OTC Pink Sheets under the symbol ELGSF and on Frankfurt Stock Exchange under the symbol E6R.
On behalf of the Board of Directors
EAGLE STAR MINERALS CORP.
Eran Friedlander, President
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- Eagle Star
Senior Manager, Corporate Development