Eagle Plains forms alliance with Billiton

Eagle Plains Resources (EPL-A) has entered into a financing arrangement with Billiton Exploration Canada, a wholly owned subsidiary of London-based Billiton.

In return for taking down a $450,000 private placement in Eagle Plains, consisting of 1.1 million shares (including 875,000 flow-through units) priced at 40 cents each, Billiton will have the right to option the North Findlay and Hap properties, 45 km north of Cominco‘s (CLT-T) Sullivan lead-zinc mine in southeastern British Columbia.

The private placement with Billiton is part of a larger financing being arranged by Eagle Plains. The overall deal includes an additional 875,000 units priced at 40 cents each and is designed to raise total proceeds of $800,000.

Each unit will consist of one flow-through share and one Series A warrant entitling the owner to buy an additional share at 55 cents in year one, or 75 cents in year two.

Billiton will be granted 1.1 million Series A warrants and 1 million Series B warrants exercisable at 75 cents for a period of 36 months. The Series B warrants will be conditional on Billiton’s entering into an option on the two properties. Billiton will have the right to earn an initial half-interest in the North Findlay and Hap properties by electing to spend $2 million on exploration over four years.

Eagle Plains will use some of the proceeds of the private placement financing to carry out a $350,000 drilling program on the North Findlay property this year.

The Findlay property was previously joint-ventured to Kennecott Canada Exploration, a division of London-based Rio Tinto (RTP-N), and has since been subdivided into the 9,000-acre North and 14,000-acre South Findlay properties.

Kennecott spent $1.3 million during the past two years exploring for sedex-style massive sulphide mineralization, similar to that found at Sullivan, culminating in a 5-hole diamond drilling program at the end of the 1998 field season. The most significant mineralization was encountered in the last hole, collared near the northern boundary of the property on a feature called Tourmalinite Ridge. The hole intercepted base metal enrichment over a length of 105.2 metres from a depth of 171.8-277 metres. Within this interval, Kennecott intersected 46 thin, stratabound horizons of mineralization.

Thomas Schroeter, a senior regional geologist with the British Columbia Geological Survey, says the mineralized interval was intersected well above the Sullivan horizon, indicating potential for discovery of mineralization elsewhere in the stratigraphy.

In January 1999, Kennecott walked away from the Findlay Creek property and concentrated its efforts southward; it subsequently optioned the 15,000-acre Greenland Creek property from Eagle Plains. Kennecott can earn a 60% interest by spending $2 million on exploration and making payments totalling $310,000 over four years.

Eagle Plains has since signed a letter-of-intent to option a 60% interest in the South Findlay property to Rio Algom (ROM-T), under the same terms as those agreed to with Kennecott.

Shareholders of Eagle Plains and Miner River Resources (MRG-A) recently approved the amalgamation of the two companies under the name Eagle Plains Resources. Miner River shareholders will receive 1.2 shares of Eagle Plains for each share held.

Eagle Plains holds joint-venture interests in 11 properties in the Tintina gold belt in the Yukon, as well as interests in nine base metal and silver prospects in the Yukon and southeastern British Columbia.