Eastmain advances in James Bay

Goldcorp (TSX: G; NYSE: GG) put the underexplored James Bay gold district of northern Quebec on the map as a highly prospective new gold camp in 2014, when it poured the first gold from its Éléonore gold mine. Last year the mine, 800 km north of Montreal, produced 274,000 oz. gold. This year it could produce 315,000 oz. gold.

But a number of juniors are active in the area, too, some of them in a joint venture with Goldcorp on a property called Éléonore South, 5 km south of the Éléonore mine and next to the southeastern border of the gold major’s Éléonore property.

Eastmain Resources (TSX: ER; US-OTC: EANRF) and Azimut Exploration (TSXV: AZM) own 36.7% and 26.6% of the joint-venture project, with Goldcorp owning the other 36.7%.

In December, the partners released results from a 4,400-metre drill program that Claude Lemasson, Eastmain’s president and CEO, describes as “very encouraging.”

The drilling targeted an area of  known as the prospective corridor, which in some places is as wide as 1 km and a couple of kilometres long, and runs from northeast to southwest on an angle.

Highlights of the 18-hole drill program, which ran from August to October, include: 6.13 grams gold per tonne over 9 metres; 5.93 grams gold over 1.5 metres; 22.4 grams gold over 1.2 metres; 3.15 grams gold over 24 metres; 4.45 grams gold over 4.5 metres; 1.72 grams gold over 35.5 metres; and 0.45 gram gold over 87 metres.

“We’re in a pretty massive gold system with some important high-grade concentration in certain areas, plus disseminated gold all over the place,” Lemasson says in an interview.

The CEO notes that the Éléonore South project is associated with a tonalite-hosted intrusion while Goldcorp’s Éléonore mine is sediment-hosted, although there is tonalite in and around the Éléonore mine.

“They are two different types of deposits, but geologically the events could have happened at roughly the same time in two different host rocks,” he says.

The camp at Eastmain Resources’ Clearwater gold property in Quebec, which hosts the Eau Claire deposit. Credit: Eastmain Resources.

This year the partners plan to drill 3,600 metres at Éléonore South and test new high-grade targets along the Moni trend, which runs along the northern boundary of the prospective corridor and is 300 to 400 metres wide.

Previous drill results from Moni include a 2.5-metre intercept of 8.88 grams gold and a 37.5-metre intercept that returned 0.51 gram gold. Channel samples from Moni include 79.6 grams gold over 4.3 metres; 79.5 grams gold over 5.9 metres; and 51.4 grams gold over 5.3 metres.

Next year will be big for Eastmain in other parts of the central James Bay district, too, Lemasson notes.

At its wholly owned Eau Claire deposit, 50 km from Goldcorp’s Éléonore mine, a 15,000-metre drill program will extend and expand the limits of the deposit and target a vertical depth of 400 metres to 850 metres in the southeastern section of the deposit. Eau Claire is open at depth towards the northeast and takes up just 1 sq. km of Eastmain’s 50 sq. km land package.

The company expects to complete a preliminary economic assessment of Eau Claire in the first half of 2018.

The deposit contains 4.2 million tonnes grading 6.16 grams gold per tonne for 826,000 oz. gold in the measured and indicated category and another 2.2 million inferred tonnes averaging 6.49 grams gold per tonne for 465,000 ounces.

Meanwhile at its Eastmain mine project, also in James Bay, the company released a resource estimate on Jan. 9. The resource was built from historic information developed by previous operators and the inclusion of 26 drill holes by Eastmain within the deposit’s resource domains, of which seven were drilled as verification holes in 2017.

The project has indicated resources of 899,000 tonnes grading 8.19 grams gold per tonne for 236,500 contained oz. gold, and another 579,000 tonnes of 7.48 grams gold for 139,300 inferred oz. resources.   

The Eastmain deposit is a partly developed, historic, high-grade gold-copper deposit in the southeastern branch of the Upper Eastmain River greenstone belt. It was discovered in 1970 by Placer Development Ltd., but extensive exploration only began in 1981.

In 1987 Placer Dome entered a joint-venture agreement with MSV Resources and completed 862 metres of ramp development, 226 metres of sublevel drifting and 95 metres of raising. In 1995, MSV mined 118,000 tonnes of material at a grade of 10.6 grams gold and 0.13% copper.

The mine produced 40,000 oz. gold that year but mining stopped due to low gold prices and difficulties with the winter road.

Lemasson says the game changer for the Eastmain mine project was the construction three years ago of a new road (Route 167 Nord) under Quebec’s Plan Nord, which provides all-season access to the property. The infrastructure has helped Eastmain re-evaluate the potential of the past-producer, reassess the historic mineral resource estimate and start an exploration program.

Barry Allan, an analyst at Laurentian Bank Securities, said in a research note after the resource estimate was released that “ongoing exploration indicates additional mineral potential on-strike, and further exploration is warranted.”

At press time, Eastmain’s shares were trading at 32¢ within a 52-week range of 28¢ (November 2017) and 64¢ (February 2017). The company has 199 million shares outstanding for a $64-million market capitalization.

“Compared to a group of peers, Eastmain Resources is cheap, even though over the last 12 months each of Eastmain’s projects has shown very good results,” Allan writes. “We think Eastmain Resources has become a takeover candidate for Goldcorp, and is deep value.”