Figure 1.SubjectCompany's Logo
Erin Ventures Inc. (TSX-V:EV)
Erin VenturesInc. is a Canadian-based internationalmetal and mineral exploration mining company listed on the TSX Venture Exchange(ticker symbol EV) (US Listing: ERVFF). The Company has come to our attentiondue, in part, to the exceptional opportunity afforded shareholders as EV.V hasregained ownership of the Piskanja Boron deposit in Serbia, the 3rd largestboron deposit in the world and is in talks with potential strategic partners ofsize that will be able to facilitate an end market for the Boron and advance theproject to fruition. EV.V also has several gold projects of significance, twowith near term cash flow potential. Mining MarketWatch Journal provides insightinto each of Erin Ventures' properties below:
1)Piskanja Boron Deposit, Serbia - 100%owned
3rd Largest Boron Deposit in TheWorld
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Figure 2. Piskanja Boron Deposit Erin Ventures' license covers ~3 square kilometers containing an ancient lakebed whereby the Boron was deposited through volcanic activity and it is believed there should be boron throughout -- so far EV.V has explored only ~4% of that basin yet has already established the 3rd largest deposit in the world.
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On August 31, 2010 Erin VenturesInc. reported that it has been granted an exploration license for the PiskanjaBoron deposit in Serbia, by the Serbian Ministry of Mining and Energy. Thelicense covers an area of approximately 3 square kilometres, and includes theentire known historical mineralized area along with a substantial amount ofpreviously unexplored ground. This development signals the return of the entirelicense area previously held by Erin Ventures.
Background: Erin Ventures enteredinto a joint venture (JV) agreement with the Serbian government over a decadeago, they were the first company to do a deal with the new government after theBosnian war and entered into a 50/50 JV with the Serb government at that timethrough an electric utility agency that was working on a coal seam when they hitBoron. Erin Ventures advanced the the project for several years encounteringsignificant successes in the process building tonnage to the point where thedeposit sat with (now considered historic non NI 43-101 compliant) tonnage of~7.5 million tonnes grading 39% B203 (Boron). Fast forward to 5 years ago, theCompany woke up one morning to find the Serb government had given the propertyto Rio Tinto. Erin Ventures launched a law suite seeking damages against theSerb government. In Q1 2008 a new Serbian government got into power, thegovernment that is in power now, one very focused on joining the EU as one oftheir main mandates and establishing a responsible business friendly (includingmining friendly) climate. Erin Ventures addressed its position with the newgovernment and within a short period of time EV.V was asked if the Company wasinterested in the return of the Boron property as settlement. EV.V indicatedthat they would and have been working on that settlement ever since and theAugust 31, 2010 release entitled "Erin Granted License for Serbian Boron Property" is part ofthose efforts. The government also provided the Volujski Kljuc alluvial goldproject to EV.V as compensation for damages in the settlement.
Region &Infrastructure
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The Piskanja deposit is located in ahistorical mining region that has good infrastructure for mining includingroads, rail, electric power, experienced miners, support services, etc., ~250 kmsouth of Belgrade, Serbia by good paved roads.
Things have changed a lot in Serbia andit is now considered a stable business friendly republic. As for the governmentthat Erin Ventures lost this property under, there is not one of them still inpower anywhere within government. There has been a lot of forward progress andnumerous business have signaled the country open for business, some noteworthynames to set up shop include Microsoft, Rio Tinto, US Steel, Fiat, Bell, ItalianTelephone, RCI, IBM, and a whole host of others. Its also beneficial to notethat the Prime Minister of Serbia went to school with one of the directors ofErin Ventures and at one point the Minister of Mining had been a student of andan employee of one of the Erin Ventures directors.
Importance of Boronand Uses
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Figure 4. Raw boron
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Boron is one of the most importantindustrial mineral there is; just about all aspects of manufacturing rely insome way on boron. According to the US Geological Society (USGS) the estimateddistribution pattern for boron compounds consumed in the United States in 2009was glass and ceramics, 76%; soaps, detergents, and bleaches, 5%; agriculture,4%; enamels and glazes, 3%; and other, 12%. One of larger product growth sectorsof the market for boron is in demand for pink fiberglass insulation stemmingfrom accelerated energy costs and the other is in high tech applications; theheat shield on the space shuttle craft is entirely boron, stealth technology(the aircraft that can’t be seen on radar) is entirely made of boron composite,through to specialty sports equipment such as boron shafted golf clubs. A newmarket application is lithium batteries, especially with respect to electricvehicles; several manufacturers are utilizing boron within their lithiumbatteries (when you use boron in a lithium battery it reduces the weight, itreduces the heat generated by the battery, allows it to hold charge longer, andallows it to be more easily recycled).
TheMarket
Demand: The latest USGSobservations note that borate consumption in China was projected to increase,driven in large part by demand from its domestic ceramic and glass industries.As a direct result, Chinese imports were expected to increase over the nextseveral years. Europe and emerging markets are requiring higher buildingstandards, which directly correlates to higher consumption of borates forinsulation fiberglass. Continued investment in new refineries and technologiesand the continued rise in demand should fuel growth in world production over thenext several years.
Supply: The marketis 80% controlled by two entities; 1) Rio Tinto with US Borax in California,they have about 40% of the world market and 2) the Turkish government has theother 40%. The Boron market is essentially an oligopoly and highly lucrative forentities with clean high grade economical deposits. Information on margins andeconomics are closely guarded trade secrets; for example, if you look at RioTinto’s information they never disclose what their production numbers are orwhat their grades are however Mining MarketWatch Journal believes (from talkingwith people that have sat through meetings at Rio Tinto) they are looking at~15% of their income coming from their Boron division alone. The Turks are knownfor frequent interruptions plus some quality and arsenic problems. Worldproduction of boron minerals reached an estimated 4.5 million metric tons in2009 (source USGS).
Price: Market prices reflect therelative scarcity of borates with prices averaging: US$280/t for colemaniteconcentrate (40-42 percent B2O3); US$500/t for ulexite (40 percent B2O3);US$550/t for boric acid; and US$50/kg for anhydrous borax.
Erin Ventures' World Class Boron Deposit - Size, the Potential, and the Advantages
The Piskanja boron deposit is thethird largest in the world as it sits now; Erin Ventures had proven up (nowconsidered historical non NI 43-101 compliant) a tonnage of 7.5M tonnes grading39% B203 (Boron). It appears to Mining MarketWatch Journalfrom its own (non 43-101) interpretation that the probable numbers are 10 - 12Mtonnes and possible 20M+. When Erin Ventures did their drill program they wereinterrupted by war but at the time they were testing two near surface zones(beds of boron mineralization called lenses), they were several kilometres apartand it was open between those zones so the potential to significantly increasethat tonnage is great. The high gradeboron deposit is currently defined in three near surface lenses. To dateErin Ventures has only explored 4% of the basin which contains the borondeposit, the entire basin is believed to be borifous.
The boron laden material found inErin Ventures' deposit is worth ~$300/tonne, just raw crushed material, it isthe most valuable industrial mineral there is and the math is fairly simple --With the average grade on this material being 39% Boron, the cost of mining (ifEV.V is simply shipping F.O.B. crushed material) Mining MarketWatch Journal believeswill be less than $50/tonne, this equates to a $2Billion+ deposit as it sits now(at 7.5M tonnes), with much higher probable numbers.
One of the significant advantages forErin Ventures so far is that there is a tremendous amount of problems witharsenic within some of the supply coming from the majors, especially Turkey, andat this point at the Piskanja property EV.V has not come across any arsenic --it is completely clean.
Another advantage is the thick nearsurface high quality grade lenses compared to some completing properties whichtend to be found in various 'radiated' deposits (imagine like a zebra coat whereyou have a couple inches of boron, a foot of rock, a couple inches boron, sixinches of rock – that sort of thing); Erin Ventures' deposit is coming in atanywhere from 1m to 9m in thickness so there is tremendous potential for highgrade material coming out of this property. With Erin Ventures' material runningat and average grade of 39% it represents a significant cost savings to thetypical buyer as what happens very often with radiated material is that theclient is actually paying for the 'equivalent' of 39% so a competing radiatedsituation might need to load up 3 and 4 tonnes of material in order to equate to39% and thus it would be more expensive to transport and to process becausegenerally the material is shipping F.O.B. (the customers responsibility).
Talks Underway for Strategic Partnerto Carry Development and Marketing
A good reason forpotential retail and institutional investors to establish a long position inshares of EV.V now
The August 31, 2010 news release ofErin Ventures entitled "Erin Granted License for Serbian Boron Property" mentions that discussions areunderway with 'interested potential strategic partners' (Journal Note: that’splural) regarding development of the project and eventual sale of the boron.Mining MarketWatch Journal notes that if Erin Ventures simply sticks to shippingBoron they should have a profitable opportunity here that could lead to thedwarfing of the current market cap as such an arrangement will allow foradvancement of the project to fruition without share dilution on the part ofErin Ventures. Now appears to be an ideal time for investors to establish a longposition in EV.V as the market cap is under $14M, with shares trading at afairly low price, yet the company has exceptional assets, prospects, iscurrently well capitalized (ErinVentures will be the recipient of US$700,000 upon the successful completion ofthe recent sale of its Belize gold project, EV.V will retain a 3%NSR), and EV.V would see an awful lot ofcash with an ideal strategic partner; EV.V could move this world class depositforward and reap the rewards without the risk and dilution. When Erin Ventureshad the property previously it had a New York traded chemical company as a JVpartner which was at that time the largest consumer of boron in the world, EV.Vhad a JV agreement whereby the chemical company would put up the money todevelop the property and Erin Ventures' contribution was the property itself --again today such an arrangement would be an attractive situation. MiningMarketWatch Journal notes that such an arrangement appears to be setting up thisway again as Erin Ventures were bold enough to make the statement regardingtalks now underway in the above referenced news release. Its is not just deeppockets that Erin Ventures will be looking for in an ideal strategic partner,they are looking for the ability to market the product aswell.
Near Term Plans for EV.V for thePiskanja Boron Deposit
ErinVentures will begin to plan to bring this thing 43-101 compliant and in the meantime continue their discussions. The data that Erin Ventures had collectedpreviously is relevant and there would have been data accumulated in the interimperiod form Rio Tinto.
Under Serbian law, a mineral exploration license is grantedexclusively, for a 3 year period (extendable at the request of the licenseholder). Upon successful completion of the exploration program, the licenseholder has the sole right to apply for an exploitation (mining) license. MiningMarketWatch Journal notes that a 3 year term is normal and is how it works inmany other counties, EV.V has an exploration license with an exclusive right toexploit.
2) SantaRosa open pit gold mine, Panama - 75% owned (viaagreement to complete)
A past producer with 60,000 oz/annumcapacity facility shutdown a decade ago with then (now consider historical non43-101) ~900,000oz proven and ~1.5M ounce resource of gold at a grade averaging1.3g/t using gold price of $350
The Santa Rosa Mine was openedfor commercial production by Greenstone Resources Ltd. in 1996 and operatedthrough 1998. The Santa Rosa gold deposit is located near the village of Caazasin Veraguas Province, Panama, approximately 300 kilometres southwest of PanamaCity Access to the site is via paved road from the paved Pan American Highway.These roads are suitable for the transportation of major project components. TheSanta Rosa project (the "Santa Rosa Mine") has two components: the Santa Rosadeposit and the Alto de la Mina ("ADLM") deposit. Project feasibility wascompleted in October 1993 for gold production by open pit mining methods.Construction of the project occurred during 1994 and 1995. Commercial productionat Santa Rosa was achieved in the second quarter of 1996.
Figure 5. Santa Rosa gold mine, Panama
The Santa Rosa is a previously minedproperty that was shut down over a decade ago and Erin Ventures is looking toput it back into action. The former owner from over a decade ago (GreenstoneResources) was entirely debt financed at the time and leveraged on a coupleother properties in Nicaragua and Guatemala -- to a large extent the Santa Rosamine was feeding those beasts that were not in production and when the price ofgold wobbled Greenstone was unable to keep the company going. At the time theywent down gold was trading somewhere around $350 and they had a cost of ~$285/ozto produce, its margins were slim. Mining MarketWatch Journal has a historicaldatabase and has reviewed its notes on Greenstone Resources; at the time theywent down there was roughly (now considered historical non NI 43-101) ~900,000Mounces proven and ~1.5M as a resource and the average grade at that time was 1.3g/t. The ~1M ounce historical resource was calculated in a $350/ounce goldenvironment -- fast forward to 2010 with $1,000+/ounce gold and is notunreasonable to assume that a look at the numbers with today’s price would yieldmuch larger results.
Figure 6. Location Map Santa Rosa gold project, Panama
Erin Ventures has signed a deal with theworkers. The workers had gone unpaid from Greenstone, they formed a group andwent to court where they won the court battle; the courts and ministry of labourgave the workers the rights to the property. The workers now have to take whatthey won in court to title -- Erin Ventures' deal is structured such that theworkers have to prove 1) title and 2) that the government of Panama will giveEV.V permission to mine the property before EV.V actually has to pay for it. Thedeal is for just over $1.5M, so if there is a resource there of 1.5M ounces thenthat means EV.V paid ~$1/ounce.
Mining MarketWatch notes that the SantaRosa is a potential company maker in itself but there are a couple of provisosto work out so EV.V does not want to spend a whole lot of money without beingassured it can advance the project.
3) Volujski Kljuc alluvial gold project, Serbia - 100% owned
Near term cash flow potential• Systematically drilled revealing (historic non 43-101 compliant) 29million cubic metres of auriferous gravel grading 0.29 g Au/cubic metre fromsurface to bedrock • Low cost to bring operational
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Figure 7. Volujski Kljuc alluvial gold project
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Erin Ventures accepted theVolujski Kljuc alluvial gold project as part settlement of their lawsuit. Themanagement of Erin Ventures knew about the property for several years and thisproperty has had a big history of gold production going back to the Romans.Management of Erin Ventures has seen the sampling which has been done, including2500+ drill holes -- the deposit appears almost drilled academically. It isbelieved there is a great possibility to improve on the interpreted numbersbelow as some think that across the board the historical interpretation utilizedthe wrong methods to measure it. Management of Erin Ventures believes theproject represents significant near term can cash flow potential and there is alow cost to get into production. Management of Erin Ventures are under noillusions and Mining MarketWatch does not anticipate that the market will beexcited about an alluvial property until at some time in the future when testinggoes well and management is proven right -- at that time EV.V can pull thetrigger and go into larger scale production. Mining MarketWatch Journalestimates EV.V can put a machine together for under US$100,000 and beginspinning off cash flow, after several month of production if EV.V can say it ranone machine and put $X million its pockets then this could be big.
The property covers approx. 24kilometres of the Pek River valley in eastern Serbia and is readily accessibleby paved highway, 160 km from the capital city of Belgrade. The area isprimarily river bottom farm land serviced by rail service and on a major powergrid. All services are available in the town of Kucevo approx. 6 km from theproperty.
The Pek River drainage system has been known to carrygold values since ancient times. Records show that various mining operationsover 17 cumulative years recovered approx. 2,300 kg of gold (60,000 ounces,worth US$66,000,000 at current gold prices) with the first production in 1905and the last in 1941.
Through to 1989, 3435 drill holes werecompleted: 1051 Banka drill holes and 2384 Keystone drill holes. Calculationscompleted in 1951 identified 29 million cubic metres of auriferous gravelgrading 0.17 g Au/cubic meter from surface to bedrock. An additional 9 - 75 cmcaisson holes were drilled on the property by Serbia's copper conglomerate, RTBBor, in the late1980's to test the validity of the grade with larger samplevolumes. The program was successful and resulted in over-all grades beingincreased significantly to 0.29 g Au/cubic metre from surface to bedrock. Visualexamination of the recovered gold from this testing reveals the absence of finegold, which may be a result of inefficient recovery and sampling techniques.Detailed examination of the drill records clearly shows a zone that carriessignificantly more gold than the average grade throughout the valley. Generally,mapping and data recording from the drilling is excellent. All holes weresurveyed and collar elevations recorded.
Due diligence willrequire that a small test plant be fabricated and several hundred cubic metersof gravel processed from trenches to bedrock to confirm recoverable gold grades.If this test is successful in confirming or increasing drill grades, Erinintends to construct a New Zealand dredge similar to the one deployed at itsBelize alluvial project (Note: EV.V just sold that Belize alluvialproject).
4) YukonGold Property Proximal to Underworld, British Columbia, Canada - 100% owned
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Figure 8. Tintina Gold Belt Erin Ventures' Yukon gold claim is ideally located within the Tintina Gold Belt. ~90 km south of Dawson City, with road access within ~20km and commercial river barge access to the area.
Figure 9. Right. Location Map
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In May 2009 Underworld ResourcesInc (TSX Venture: UW) announced a spectacular drill intersection of 3.4gpt over104.0m on the Golden Saddle zone on the White Gold property located 75km southof Dawson City, Yukon. Ten months later Kinross Gold Corporation launched afriendly takeover bid for Underworld valued $139.2-million. In May of 2010 ErinVentures entered into an agreement to acquire the AU The 36 lode Quartz mineralclaims are adjacent to the White Gold Property held by Underworld Resourceslocated in the Yukon. The Erin Ventures claims (known as the AU Claims) aredirectly to the northeast, approximately 14 km from Underworld's White Golddiscovery (since acquired by Kinross Gold).
Erin's claims appear tohost similar metasedimentary stratigraphy as the Underworld White Gold project,as outlined in GSC mapping by Gordey and Ryan. The White Gold District lieswithin the Tintina Gold Belt a 200-km-wide, 1,200-km-long arc extending fromnorthern British Columbia into southwestAlaska. This area has past productionand gold resources totaling over 69 million ounces.
Erin Ventures is working on a testprogram which should be completed by the end of September 2010 with results tofollow when available.
5) Deep River gold-copper-molybdenum property, North Carolina- 100% Owned
Deep River containsgold-copper-molybdenum mineralization that is associated with altered porphyryintrusions and associated volcanic rocks and sediments. This high-level porphyrygold style mineralization in the Carolina Slate Belt is considered to have thepotential for significant tonnage and economic value. The highly anomalous soilgold values found at Deep River are analogous to those encountered during theinitial geochemical surveys at the two-million ounce Ridgeway gold mine.
The alteration associated with this porphyry system forms anelliptical shape elongated in a northwesterly direction and covers an area ofapproximately 8 km by 5 km. Within this system, the known soil gold anomaly (+50 ppb) has dimensions of approximately 3 km by 1 km with gold values up to 3.5g/t. The broad alteration pattern may indicate the sub-surface existence of amuch larger intrusive system that has not been drill tested.
Results from rock sampling of the limited outcrop in the prospectarea range up to 3.1 g/t gold, 0.2% copper, 0.13% molybdenum and 0.74% lead.Rock samples taken outside of the original soil grid reported 2.5 g/t and 0.6g/t gold, indicating good potential to expand the overall dimensions of themineralized zone. The overall zone of mineralization is poorly exposed due todeep weathering and vegetation. An airborne magnetic, radiometric and EMgeophysical survey show that the presently known area of alteration andmineralization is situated on the northwest flank of a large magnetic low,indicating that the system may be significantly larger than exposed.
LOCATION / INFRASTRUCTURE
The Deep River Gold Project is locatedin central North Carolina, approximately 100 kilometers southwest of the capitalcity of Raleigh, in a rural area consisting primarily of farms and timberland.Infrastructure is excellent with good road access and readily available powerand water, as well as a skilled labor force.
Mining in North Carolinais not subject to federal mining law but is regulated by State agencies. Thepresent state government is considered by the company to be pro-business andenvironmental permitting is expected to proceed without significantdifficulties. All land, including the minerals rights in the prospect area isprivately owned.
6) CeiboChico gold project, Belize - SOLD
See related August 23, 2010 releaseentitled "Erin to sell Belize Gold Project"; EV.V will be the recipientof US$700,000 upon the successful completion of the recent sale of its Belizegold project, EV.V will retain a 3% NSR.
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The current board of directors has a well rounded combination ofpeople that each contribute expertise in disciplines necessary for a successfulmining entity:
Tim Daniels, President and Director
Tim Daniels, B.Comm.,President and Director, has over 15 years experience in the development andfinancing of natural resource and industrial companies. He served as BranchManager for a Canadian Investment Dealer, acquiring extensive knowledge incorporate and equity financing, and general business development.
James Wallis, M.Sc.(Eng), P.Eng.,Officer
James Wallis, M.Sc(Eng),P.Eng., Officer and Manager of Mining Operations. 30 years of experience in allphases of mineral exploration and mine development makes Mr. Wallis an importantpart of the Erin Ventures team. Mr. Wallis has worked throughout the world insenior mine management positions with companies such as Noranda, Kerr Addison,U.S. Borax, Amax and others. Heis a recognized expert on the evaluation and development of alluvial deposits,and a Registered Professional Engineer in the province of B.C. Since 1996, hehas been based in Belgrade, Yugoslavia.
Mining MarketWatch Note: Jim Wallace iswhat we would classify as a Boron expert, he worked for U.S. Borax for a numberof years.
Dr. Dragoljub Jujic, M. Eng.,Director
Dr. Dragoljub Jujic, M.Eng., Director, has over 30 yearsexperience in mining, engineering and research. A respected and well publishedauthority on the Yugoslavian mining sector, Dr. Jujic previously served asDirector of the Yugoslavian Mining Institute.
Dr. Dennis LaPoint, Director
Dr. LaPoint is aregistered professional geologist with over 35 years experience. He hasextensive management experience in the mineral industry throughout the US andthe Guyana Shield. For the past 8 years he has focused on exploration in theGuyana Shield where he initiated and discovered the Nassau gold district forAlcoa in Suriname, a major new grassroots discovery which is currently inpre-feasibility studies by Newmont. Until recently, he was Exploration Managerfor IAMGold (formerly Cambior) for Suriname where he was responsible for theexploration for new deposits at the Rosebel Gold Mine and new opportunitieswithin Suriname.
Dr. LaPoint has generated and managed programs in precious metals, basemetals, specialty metals, uranium, diamonds and industrial minerals for avariety of companies and clients. In addition he has been General Manager of achemical plant to generate HF acid and recover tantalum. He is an adjunctfaculty member at the University of North Carolina in Chapel Hill and promoteseducational opportunities for Suriname, North American and European students togain field experience. He is a member of the Board for Licensing for Geologistsin North Carolina, past President of the Carolina Geological Society and pastChairman of the Carolina Section SME. He has publications on many topicsincluding North Carolina as America’s first gold rush and an invited paper onthe social impact of small scale mining presented in Germany.
He is founder and President of Appalachian ResourcesLLC, which provides project generation and management services for mineralexploration. He is also co-founder of Triangle Minerals, currently evaluatingthe Deep River gold porphyry target in North Carolina for Erin Ventures. In the1980’s and 1990’s, he was credited with several new gold discoveries in bothNorth and South Carolina.
Mining MarketWatch Note: Dr. LaPointwas head of exploration at the Rosebel mine during IAMGold's now ~10M ounce golddiscovery and was also a key figure in the now ~6M ounce discovery in Surinamenow owned by Alcoa in JV with NEM.
Blake Fallis, General Manager and Chief FinancialOfficer
Blake Fallis has over 20 years experience in financing andcorporate development and has worked with various private and public companiesto provide corporate finance, investor relations, and corporate developmentstrategies. He also spent several years in the investment industry as a licensedstockbroker for a Canadian-based investment firm.
Note: This list is not intended to be a complete overviewof Erin Ventures Inc. or a complete listing of Erin Venture's projects, MiningMarketWatch urges the reader to contact the subject company and has identifiedthe following sources for information on Erin Ventures Inc.:
For more informationcontact Erin Ventures' head office at: Ph 1.888.289.3746
Company's web site:www.erinventures.comSEDAR Filings:URL