Soquem drops Clearwater back-in (August 11, 2003)

Quebec government-owned Soquem has waived its back-in right to regain a 25% stake in the Clearwater gold project, in the province’s northwestern region.

Last March, Soquem granted an option on half of its 50% stake in the project to then-equal partner Eastmain Resources (ER-T) in return for $2.5 million worth of work over four years. The deal included a clause allowing Soquem 60 days in which to decide whether or not to regain the quarter-stake by spending $3 million over five years.

Eastmain says that government exploration rebate incentives have helped it reduce its net expenditures at Clearwater by 60% while essentially cutting the earn-in period in half.

The company is engaged in a $1-million, 10,000-metre drilling and trenching program at Clearwater, the objective being to expand the resource base and complete its 75% earn-in requirements.

The drilling is focused on the Eau Claire deposit, both near the surface and at depth. At surface, the holes are testing regional rock and soil anomalies coincident with geophysical anomalies on the western third of the property.

Assay results are pending for two holes already sunk to test the depth extension of the known gold zone along a central-southeastern trend in the area of the Eau Claire deposit.

Drilling will also test for lateral and vertical extensions of the main group of gold-bearing veins (D, G, H, I, P and JQ) near the eastern and western limits of the deposit. Also, a few holes will test for extensions to a gold-copper-silver-rich sulphide zone to the south.

In early May, Eastmain boosted Eau Claire’s resource to 2.7 million tonnes grading 6.75 grams gold per tonne, or 578,846 contained ounces of gold. Of that, more than 1 million tonnes running 8.15 grams are classified as indicated resources, whereas 1.6 million tonnes grading 5.9 grams gold are listed as inferred. The new estimate is based on 18 holes (10,000 metres) drilled in the second half of 2002.

Half the resource is hosted by three veins (I, P and JQ), and the estimate employs cutoff grades of 4 and 2.5 grams gold per tonne over minimum horizontal thicknesses of 1.5 metres.

The vein system at Eau Claire has been defined over 300 metres laterally and 200 metres vertically; it remains open in all directions.

On the financial front, Eastmain has closed two private placements totalling $600,000. Under the first deal, Quebec mining fund Sidex bought 1 million units at 35 apiece. One unit consists of one share, half a 45-per-share warrant, and half a share purchase warrant priced at 60 per share. The warrants are good for 18 months from closing. Proceeds will help fund drilling and trenching at Clearwater. The funds qualify for provincial incentive rebates.

In another deal, The Contrarian Resource Fund acquired 694,445 units at 36 each. One unit includes one flow-through share and half a warrant. One warrant is good for one share at 45 for one year. Proceeds will fund a planned program of geochemical sampling, geological mapping and geophysical surveying on the newly acquired Reserve Creek project in the Uchi Belt of Ontario. The work will focus on a 9-km-long favourable gold trend.

Eastmain can earn a half-interest in the property from Slam Exploration (SXL-V) by spending $1.1 million on exploration and issuing 360,000 shares over three years. Eastmain must also issue 90,000 shares and commit to spending $300,000 in the first year.