Eastmain shares soar on GoldCorp alliance (November 11, 2003)

Shares in Eastmain Resources (ER-T) received a healthy shot in the arm on Nov. 11 after the company announced that it would partner up with 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 four-month hold period.

The deal also 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 5 years.

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

Earlier this summer, Soquem waived its back-in right to regain a 25% stake in the project. Soquem 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 7 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 0.5 metre (beginning at 462 metres below surface) of 18.8 grams gold; hole 20 yielded 1.5 metres (from 465 m) 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 are pending for another 12 holes, including 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 the D vein, one of the main group of gold-bearing veins.

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

Eastmain’s stock was 17, or 31%, higher at 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.