Eagle Star Minerals Corp.

Eagle Star Minerals Corp.

June 16, 2011 15:31 ET

Eagle Star Minerals Corp. Acquires Mineral Concessions With High Phosphate Potential in the Parnaiba Basin, State of Piaui, North East Brazil

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 16, 2011) - Eagle Star Minerals Corp. (TSX VENTURE:EGE)(PINK SHEETS:ELGSF)(FRANKFURT:E6R) ("Eagle Star" or "the Company") is pleased to announce that it has received approval from the National Mining Agency of Brazil (DNPM) of its application for 39 mineral claims covering an area of 80,000 hectares in the centre of the state of Piaui – Northeast Brazil The concessions are located in areas with extensive phosphate potential.

The Phosphate occurrences are associated with the Pimenteiras shale formation located within the Parnaiba Basin. An arms-length party which includes Brazilian geologists has recognized this geological environment as having the potential for the occurrence of large scale phosphate and potash mineralization and has approached Eagle Star for the land acquisition. They carried out very detailed reconnaissance litho-geochemical rock chip channel sampling of the Pimenteiras formation outcrops for locating phosphate mineralization in the Parnaiba Basin. Over 222 samples were collected in an area measured 200 kilometres by 60 kilometres. Most of the samples were collected from outcrops along the main road or nearby access roads. The distance between the samples was variable and was consequence of local conditions, but on an average samples were collected every 3 kilometres. Each sample corresponds to a channel, perpendicular to the layers or bedding. The length of each was variable and averages 3 meters.

Three different highly anomalous areas were identified from the sampling. Claims totaling 80,000 hectares were staked to cover these anomalous areas.

  • The principal anomalous zone has 180 km² (18,000 hectares) and returned values of 2-22% P2O5
  • The second anomalous zone covers 340km² (34,000 hectares) and showed anomalous results of 3-10% P2O5
  • A third anomalous zone covers 240km² (24,000 hectares) with lower results (2-5% P2O5) but should present higher values in a detailed sampling

The best results, mainly in the Paes Landim area, come from siltstone outcrops with phosphate nodules. The Pimenteiras siltstone formation is observed to be more than 12 meters thick based on the numerous outcrops in the area. The rock samples were analyzed by SGS Geosol Laboratorios Ltda (SGS) located in Vespaciano, Brazil. Detailed assay results from the three areas are shown below:

Paes Landim Block

Sample # %%%%%%%%%

Santa Cruz Block

Sample #%%%%%%%%%

Canabrava Block

Sample # %%%%%%%%%

Geological studies suggest that the Pimenteiras formation was formed by cold water depositional environment. Most of the phosphate deposits in the world occur in sedimentary rocks like black shale, chert and carbonate rocks. The origin of these deposits is debated; most commonly they are associated with phosphate and nutrient rich cold upwelling currents (Kazakov, 1937; Cook, 1976; Sheldon, 1981). A possible tectonic control is suggested by its common association to marine transgressions (Strakhov, 1960; Mitchell & Garson, 1981).

Economic deposits usually show P2O5 (phosphate) grades ranging from 5 to 35%, most often as cryptocrystalline fluorapatite [Ca5(PO4)3(F,CO3)]. The most productive deposits are Upper Cretaceous to Eocene in age, located in Morocco, North Africa, and the Permian Phosphoria Formation in Idaho, USA (Blatt et al., 1991). The Phosphoria Formation is an example of a deposit associated to marine transgression presenting residual enrichment due to weathering of soluble phase (e.g., carbonate). The phosphate mineralization at Pimenteiras can also be compared to the Wonarah phosphate mine located in the Georgina Basin, Northern Australia. The Wonarah deposit hosts 485 million tonnes grading 18% P2O5

Brazil is one of the world's major agricultural producers. Agriculture represents one third of its economy, 42% percent of it is export based and is responsible for 17.7 million jobs (ANDEF, 2004). However, most of the soil in the countryside lacks Phosphorus (P), Potassium (K) and Nitrogen (N) and there are no economic viable deposits of sulphur. As the production of fertilisers has not followed the development of agriculture and livestock farming, the country became the 4th major importer of fertilisers and 2nd major importer of phosphate (Lapido-Loureiro et al., 2008), accounting for 51% of the phosphorous utilised in the country (www.cruzeirodosul.inf.br). In 2006, Brazil imported US$ FOB 1.170 billion in phosphate. This dependency is anticipated to increase continuously unless new domestic sources are found. Soils in the Brazilian Savanna are very depleted in phosphorous; this factor hinders long lasting and profitable agricultural activities without the application of phosphate based fertilisers. Therefore any locally produced phosphate from new mines will be consumed locally in Brazil.

The project area has excellent infrastructure consisting of roads, water reservoirs, power lines and a future railroad to be completed by the year 2013. In addition, Piaui state has a large agricultural base which includes soy plantations. Therefore any phospahate production will be consumed by local markets.

Eagle Star plans to commence next stage of exploration effective immediately. This will include mapping, systematic chip sampling and drilling.

The Company has agreed to pay project generation fees to the Arms-length party. In order to maintain 100 percent interest in the project the following fees have to paid to the party.

  • issuance of one (1) million shares upon completion of first exploration stage (eight months) and commencement of second exploration stage subject to regulatory approvals (binding). 25% will be free trading effective immediately, additional 25% will be free trading within 6 months of issuance, further 25% will be free trading within 12 months of issuance and the final 25% will be free trading within 18 months of issuance.
  • Cash payment of 500,000 Brazilian Reals within 6 months upon completion of 1st exploration stage or 1 million Reals within 12 months upon completion of 1st exploration stage or 3 million Reals within 24 months upon completion of 1st exploration stage. Alternatively, the company can choose to make no cash payment in which case it will retain 90% interest in the project.

"This is a significant milestone for us as it is the first opportunity to be staked and wholly owned by the Company in Brazil," commented Eran Friedlander, President & CEO of Eagle Star Minerals Corp. "The Company's Brazilian team has been directly involved in the selection and claiming process as a result we are very confident about developing this project to production. With phosphate demand being strong in Brazil we believe that this new asset will add significant value to our portfolio."

Quality Assurance, Quality Control and Qualified Persons

SGS is a ISO14001:2004 and ISO 9001:2008 accredited laboratory. The samples were analyzed by fusion with lithium tetraborate-XRF for SiO2, Al2O3, Fe2O3, CaO, MgO, K2O, TiO2, P2O5 and MnO and retained moisture (LOI) by multi-temperature. The MnO results are negligible.

SGS inserts its own standards, blanks and duplicate samples. The results from these control samples indicate acceptable consistency of analysis.

This news release was reviewed and approved by Mohan R. Vulimiri, M.Sc., P.Geo, who is a qualified person under the NI 43-101 guidelines. Mr. Vulimiri is a member of the Eagle Star's Technical Advisory Board and he advises on all technical aspects with respect to the Company's various projects.

Other News:

The Company arranged a non-brokered private placement of $2.5 million dollars consisting of 10 million units. Each unit is priced at $0.25 per unit and it consists of one share and half share purchase warrant exercisable at a price of $0.35 per share for a period of two (2) years. Finder's Fees will be payable on some of the proceeds of the private placement.

About the Company

Eagle Star Minerals Corp. is a Natural Resource company headquartered in Vancouver, British Columbia, focused on the acquisition, exploration and development of mineral properties in North and South America. The Company's shares are publicly traded on the TSXv under the symbol EGE and on Frankfurt Stock Exchange under the symbol E6R.F.

The Company completed first stage, exploration work program at its Angico Iron project in the State of Piaui, Northeast Brazil. Eagle Star is concentrating on delineating Direct Shipping Ore (DSO) type iron mineralization at the Angico project.

On behalf of the Board of Directors


Eran Friedlander, President

Forward-Looking Statements

This document includes forward-looking statements that are not historical facts. Forward-looking statements include, but are not limited to, statements concerning Eagle Star's that we can maintain our 100% interest in 39 claims in Brazil, that we can successfully fulfill the conditions to maintain our interest, that we .will immediately commence mapping, systematic chip sampling and drilling Also, that we have arranged a private placement. Although Eagle Star believes that its expectations reflected in these forward looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Factors that could cause actual results to differ materially include our possible inability to fulfill conditions of our agreement, the uncertainty of the requirements demanded by environmental regulatory agencies, the Company's ability to raise financing for operations, stock exchange requirements to issue securities that we may be unable to meet, inability to maintain qualified employees or consultants, competition for equipment, inability to obtain required permits, potential delays or obstacles in operations and interpreting data, market conditions and the likelihood that no commercial minerals are discovered. Readers should also review the corporation's periodic filings with Canadian securities regulators for additional risk factors.

Neither the TSX Venture Exchange Inc. nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange Inc.) accepts responsibility for the adequacy or accuracy of this press release.

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