Eastmain shares soar on GoldCorp alliance (November 24, 2003)

Eastmain Resources (ER-T) has partnered with mid-tier producer Goldcorp (G-T) to acquire, explore and develop gold deposits in Quebec.

Goldcorp recently subscribed to a private placement of 2 million Eastmain units at 50 apiece, with each unit comprising one share plus half a warrant. One warrant is good for one share at 60 each until Oct. 24, 2005. The securities issued under the deal are subject to a 4-month hold period.

The deal allows Goldcorp to maintain its stake (currently around 6%) in Eastmain via future private placements, and participate in any of the junior’s Quebec-based projects for five years.

Eastmain’s Quebec gold projects include Clearwater, in the province’s northwestern region, where crews are in the midst of a $1-million, 10,000-metre program of drilling and trenching designed to expand resources and complete the company’s 75% earn-in requirements.

Earlier this summer, Soquem waived its back-in right to regain a 25% stake in the project. The Quebec Crown corporation optioned the quarter-stake to Eastmain last March in return for $2.5 million worth of work over four years.

In early May, the Eau Claire deposit’s resource was boosted to 2.7 million tonnes grading 6.75 grams gold per tonne. 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.

More recently, Eastmain reported that the first seven of 15 planned holes designed to test for lateral and depth extensions at Eau Claire encountered 51 veins running from 1.84 grams gold per tonne over 8 metres to 20.8 grams over 1 metre. Each hole cut between 5 and 15 gold-bearing veins and schist zones.

Holes 19 and 20 intersected the main group of veins at vertical depths of around 500 metres — deeper than all previous drilling. Hole 19 cut a 0.5-metre section (beginning at 462 metres below surface) of 18.8 grams gold; hole 20 yielded 1.5 metres (from 465 metres) averaging 9.1 grams.

Hole 21 was collared at the eastern end of the deposit, and cut a 2.5-metre-thick vein grading 7.7 grams gold per tonne, including 1 metre of 17.7 grams.

Assay results for another 12 holes are pending; these include four collared to test regional geochemical and geophysical anomalies elsewhere on the property.

Meanwhile, preliminary results form one of three 500-metre trenches cut across Eau Claire includes a 1.5-metre section averaging 9.5 grams gold per tonne. Eastmain says the vein coincides with the surface projection of “D”, one of the main group of gold-bearing veins.

An updated resource calculation at Clearwater is expected by year-end.

News of the Goldcorp alliance sent shares in Eastmain 17, or 31%, higher to a near four-year high of 73 in early trading in Toronto on Nov. 11. For their part, GoldCorp shares were off 3 at $20.40.