Tapping into Brazil: Eagle Star Minerals' Iron Potential

Online, December 30, 2010 (Newswire.com) - ANALYSIS - ProspectingJournal.com - VANCOUVER, BC - Over the next six years the world is going to become more and more familiar with Brazil and what it has to offer on a global stage. While billions of eyes are set on Brazil's preparation for two of the world's largest sporting events (FIFA World Cup 2014, Summer Olympics 2016), many in the investment community have been closely following the rapid and exciting development within Latin America as a whole. Built up on the successes of oil giant PetroBras [PBR - NYSE] and mining goliath Vale [VALE - NYSE], the Brazilian economy has been steadily opening up through better transparency, efficient government regulations and high-potential openings for smaller international companies looking for their piece of the Brazilian dream. One company that is seeking to harness this potential is Eagle Star Minerals [EGE - TSX.V], based out of Vancouver, Canada.

"Brazil is a very attractive country for junior resource companies to operate in. After all, the regime is very similar to what we encounter here in North America. Everything is well regulated by the government, with the National Department of Mineral Production (DNPM) (in the case of the mining industry) granting concessions and making sure that stakeholders fulfill their commitments", says Eagle Star's President and CEO, Eran Friedlander.

"The prolific mining and oil and gas sectors of Brazil were state-owned for many years, and only recently have been opened up to the rest of the world. The result has been the creation of many opportunities for finding large deposits in Brazil for junior public companies, like ours. This is a major benefit to companies like Eagle Star who are positioned to take advantage of the opportunities as they arise."

"Since Brazil is home for two international giants (namely VALE and PetroBras) there are a lot of knowledgeable people in Brazil for us to work with who have the capacity and the experience to assist in developing these large scale, natural resource projects."

Eagle Star Minerals is currently poised to earn 55% interest (with an option to capture the remaining 45%) over a 100,000 acres of mineral claims spread over three parcels in Brazil. Located near pre-established infrastructure which provides easy access, Eagle Star's Angico Iron Project is now six months into development with the goal of proving the iron mineralization previously identified by magnetometer surveys over the project's three claim blocks. The potential within the development of these Brazilian claims has always been apparent to Friedlander and his team.

With three stages of development planned over the first 30 months since signing the initial contract in February 2010, Eagle Star has successfully moved out of stage one, and remains right on schedule. Exploration work started in June 2010, spearheading what can be considered a very intensive year for a company of this size and level of progression. Since the area comprised within the Angico Iron Project is quite large, exploration is done through both trenching and drilling to maximize the amount of data that can be collected over the claims.

"Over the last few months we've done work to uncover what's underground, to give us a glimpse of what we should expect," says Friedlander. "After all, our area is very large and contains three different types of iron mineralization. So while that's good from a risk perspective, it also requires us to do a lot of work to learn more about the quality and potential of the different prospects."

"Wherever surface conditions allowed, we went with the trenching method, since it is the most cost-effective. Wherever it wasn't permitted, we drilled. So far our drilling work has been very shallow, as only 500m was budgeted in stage one. In an effort to cover a very large area, we were limited in terms of how deep we could go for the time being. All in all we have completed our intended trenching and drilling work and now await the results from the samples we've collected through these two activities."

While the waiting for feedback from the exploration activity continues for the near future, Friedlander remains confident in the potential that Brazil and its iron market presents for the company. No stranger to the area, Friedlander began doing business in Brazil in 2001 while the country was still in recession. Foresight into the opportunities that were opening up in the region, Friedlander began accumulating business ties and a solid network. This development of contacts and acquaintances resulted in some people in high places. It was through an ex-government minister familiar with the Brazilian group that held the rights to the Angico project that presented Friedlander with the opportunity at a stage that sought proper investment. Knowing the potential of the market in Brazil, Friedlander and his team acted upon the opportunity.

"The iron market is very strong in Brazil. You can see this through the level of exploration that's going throughout the country. There are many projects being explored at the moment, with prices being high," says Friedlander about the iron climate.

As a global leader of iron production, Brazil is attracting a lot of international iron companies too. These companies need to guarantee their future supplies, so they seek out new deposits to acquire. The potential afforded for each of these companies by Brazil's attractive deposits and steadily opening market has made the country a natural choice to seek new projects. This has allowed iron producers more choice to shop for supplies.

"To further demonstrate the strength of the market, today we know that the pig iron manufacturers in Brazil are struggling for cheap supply, so they are forced to use alternative sources," adds Friedlander. "This bodes well for local demand going forward".

Where Eagle Star currently sits is in stage two of its exploration program, on schedule to make completion two years from now. The risk is diversified over the three claims, from which results from the most recent work should be arriving in the new year. The potential for each claim allows Eagle Star to assess each of the large land masses separately.

"In terms of potential, a discovery in any one of our three concession areas should turn out to be really enormous. That's why we like what we've seen for this project. There's significant potential in each and every area," boasts Friedlander. "And on top of that, because we are already there, and this is an area that can host other attractive projects, there are going to be some opportunities to expand. That's something we are planning to do next year, with the objective being to build up a portfolio that has a potential resource of having one billion tonnes of iron ore."

G. Joel Chury

ProspectingJournal.com

--
DISCLOSURE: A fee has been paid for the production and distribution of this article and as such should be viewed in the context of advertising. At the time of publication, the author of the article does not hold any shares in the company described.