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Eastmain Resources Inc. (ER-TSX) |
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November 28, 2008 Issue |
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The Most Powerful Name In Corporate News and Information. |
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Despite The Turmoil In The Markets, Junior Mining Company Eastmain Resources Is Well Positioned, With Goldcorp As A Major Shareholder Building A New Mine With A New Complex In The Same District Where Eastmain Has Discovered A High-Grade Gold Deposit |
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Eastmain is a Canadian gold exploration company with 100% interest in the Eau Claire and Eastmain gold deposits. The Corporation has in excess of $20 Million in working capital and holds an interest in 12 projects within the district, including the Eleonore South property, where a gold discovery has been found in a similar geologic setting to Goldcorp's Roberto deposit. Eastmain has a minimum budget of $4 million for gold exploration in Quebec. |
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Mr. Robinson: “Despite the turmoil in the markets we are in very good shape. We are focused on precious metals in northern Quebec, with a high-grade deposit (the Eau Claire deposit, Clearwater project) that we are drilling as we speak. It (Eau Claire) has had very pleasant results; there is a lot of gold present. This summer we were also able to load the treasury up via a significant private placement with several key institutions, led by our major shareholder, which is Goldcorp. Combine that placement with the circumstances that Goldcorp is building a new mine and a new mill complex in our immediate district, and things look very promising. We have a future home for our gold deposit.”
CEOCFO: Would you tell us more about where you are in the actual project? Mr. Robinson: “We are in the process of drilling it (the Eau Claire gold deposit) off to define mineable resources, firstly, through an open pit, so that we are detail drilling with large diameter core. We can tell when we hit; gold is visually obvious; a lot of fine gold dust is present in the rock. That is the main target, so geologists in the field can tell whether we are into gold-bearing rock or not. Literally, we are systematically definition drilling this area to outline a large open-pitable resource. In contrast with many projects out there, this is a very high-grade deposit as opposed to a large low-grade deposit. By high-grade I am referring to grades of about .7 ounces per ton, as opposed to grams per ton.”
CEOCFO: What led you to this particular project? Mr. Robinson: “We have been working at this for a long time. Initially the search for another Hemlo led the Company to the Clearwater Project. Eastmain has been involved with this project on and off since the 1980’s. Under the current management team, we acquired control in 2001; at the time had been a joint venture with the Quebec government. It wasn’t really until 2007 that we significantly changed the scope of the project by increasing the diameter of the core size and drill-testing on a close spacing. The combination of closely-spaced drill holes plus large diameter core started to demonstrate (in three dimensions) what we had previously seen during surface stripping and sampling in detail - there was a lot of gold present. Gold content was very high in the larger samples and the more samples we collected the more the overall grade went up.”
CEOCFO: How did you know to change techniques? Mr. Robinson: “We were preparing to do a bulk sample on the project. We had intended to go in and drill and blast and transport a few thousand tons of rock to a local mill, and in discussions with our major shareholder, which is Goldcorp, they suggested that a large diameter drill program (larger samples) may be more representative of the metallurgy of the deposit. Therefore, we decided to change the core diameter to a larger diameter called HQ, 2.5 inches across. That definitely was the ticket.”
CEOCFO: What is the timetable going forward? Mr. Robinson: “As we speak, we are drilling and will continue to drill up until the 31st of October. At that point, we will wrap it up until the end of this year and probably start up again in early winter and continue to drill. The idea now is to convert the known resources from an indicated resource to a measured resource. This just gives you a higher confidence in terms of the grade of the resource estimate for an open pit at Eau Claire. Our objective is to make the pit as large as possible. It would be equivalent to operating a gravel pit. Literally you would just come in there drilling, blast, and scoop up gold-bearing rock and truck it to the facility.”
CEOCFO: It sounds so easy! Mr. Robinson: “It is something that is very easy and it has only taken us 25 years to get to this position. We have some things going for us. First, is that in contrast to many projects, we are in the middle of quite a number of hydroelectric projects, so that we can drive to a project and not have to pay a nickel for it - Hydro Quebec has provided the infrastructure. In addition, to power and roads, you can stand on the deposit and your cell phone works. That is combined with the Quebec government really wanting you to be there, so much so that for every dollar you spend, about half of it is reimbursed. What that translates into is that for the first million ounces of gold outlined at Clearwater, it costs about $6.80 per ounce of gold. What is obvious is that with the circumstances we are seeing in the stock market, we are firm believers that the place to be, is in precious metals. Clearly, as there is turmoil going on in the paper currency markets, some of the best “currency” to be in is something that is tangible in terms of precious metals. Further, because we have a high-grade gold deposit, those metals that are sitting there in the ground are becoming more valuable. That is particularly advantageous to a junior company such as ourselves. That added to the financial package provided by Quebec really puts us in a more favorable position that most given the current market circumstances.”
CEOCFO: How often is the high-grade gold found? Mr. Robinson: “The typical Canadian shield deposit is about a quarter of an ounce in gold. Many of the big projects these days are measured in grams instead of ounces. They are monstrous in size, but very low-grade. In translation, you have to put quite a number of tons into a mill in order to actually end up with an ounce, which is throughput, which is a driving force. The richest gold deposit in the shield is owned by Goldcorp. It is at Red Lake. The average grade there was .6 ounces per ton and we have now located material that is an average of ¾ and more of an ounce per ton. Those are few and far between. For our company to own a project that has such high-grade sort of sets us apart. Our objective is to determine how many million ounces we can outline. Through the resource estimate that we put out several years ago, we had built Eau Claire up to a million-ounce category. Now we are going to determine if it is a million-ounce deposit or a multi-million ounce deposit.”
CEOCFO: Will you be bringing in more partners; what will happen when it is actually time to do the mining? Mr. Robinson: “We are an explorer, so our expertise is at the exploration level. We are very comfortable working with diamond drills and typical survey equipment that leads you to outlining and defining a deposit. At that point we would have a business plan to sell the assets to the highest bidder, dividend to our shareholders and then go on to do it all again.”
CEOCFO: How do you get the investment public to pay attention when so many companies fighting for a place in the sun? Mr. Robinson: “One easy trick that we had this year wasn’t really a trick. It was that we had drilled high-grade visible gold at Eau Claire. For about two hundred presentations to the institutional clients out there, I had a sample that instead of being measured our typical .7 ounces per ton, had 70.74 ounces per ton. That is more than 2,500 grams or 2.5 kilograms of gold per ton. When you can actually hold a sample in your hand and look at the visible gold, that gets people’s attention. That sample demonstrates that we have a very high-grade project. It demonstrates that perhaps there is untapped potential at Eau Claire that has been undervalued relative to the marketplace.”
“Year to date from January 1st, until yesterday, our stock is plus 74%, which compares favorably to the rest of the gold market.”
CEOCFO: In closing, why should potential investors show interest in Eastmain now?
Mr.
Robinson: “We
have a premiere project that we are expanding in terms of resources, that is
well located. We are financially healthy. There is $21.6 million in the
treasury and the Quebec government refunds almost half of your money year in
and year out. We have been on Toronto Stock Exchange for more than a decade,
so Eastmain is not something that is out of the blue. We have major
shareholders and a partner which is the second largest gold company in the
world.” |
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“Despite the turmoil in the markets we are in very good shape. We are focused on precious metals in northern Quebec, with a high-grade deposit (the Eau Claire deposit, Clearwater project) that we are drilling as we speak. It (Eau Claire) has had very pleasant results; there is a lot of gold present. This summer we were also able to load the treasury up via a significant private placement with several key institutions, led by our major shareholder, which is Goldcorp. Combine that placement with the circumstances that Goldcorp is building a new mine and a new mill complex in our immediate district, and things look very promising. We have a future home for our gold deposit.” - Donald J. Robinson |
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