Eastmain’s Eau Claire deposit grows in lonore’s shadow

BEAVER CREEK, COLORADO — Eastmain Resources (TSX: ER; US-OTC: EANRF) is confident that its Eau Claire deposit will become the second gold mine in Quebec’s James Bay region, following Goldcorp’s (TSX: G; NYSE: GG) nearly built Éléonore mine, which will produce 575,000 to 625,000 oz. gold a year in full swing.

“There are two gold projects in this district that will become gold mines — one of them is commissioned, and will be in commercial production in [early 2015]. We believe ours is the next in line, and approaching the post-exploration stage, if you will,” Eastmain’s president and CEO Donald Robinson said in a Sept. 12 presentation.

Eau Claire is part of the company’s wholly owned Clearwater property and one of the five known gold deposits in the James Bay region. Clearwater covers 200 sq. km of the Eastmain-Opinaca greenstone belt, underlain by geology that is similar to many major gold camps in Canada.

“We moved up to this district for the principal reason that this is exactly the same geology as the Abitibi belt,” Robinson said during the Precious Metals Summit in Colorado. “The only difference was that the claim acquisitions were in the hundreds of square kilometres instead of the square kilometres. It was brand new, little was known about it — but it is clear it is underlain by the same geology.”

Eastmain was part of a joint exploration effort with Westmin Resources that led to the Clearwater project acquisition and to the Eau Claire gold-deposit discovery in 1987. From 1984 through 1989, the two completed several exploration programs on the property, with Westmin drilling 52 holes.

By 1995, Soquem had acquired an option to earn a 50% interest in Clearwater by spending $2 million in work expenditures, while Eastmain kept the other half and Westmin reverted to a royalty interest, which Eastmain later bought in 2001. Soquem drilled 95 holes on Eau Claire and reported a maiden resource estimate on the deposit in 2001.

A year later, Eastmain became Clearwater’s operator and acquired an option to boost its ownership to 75% by spending $2 million. In 2004, it received an option to increase its ownership to 100% by making payments of $500,000 in cash and 500,000 shares subject to a 2% net smelter return royalty held by Soquem. Eastmain bought back that royalty in 2011 for $1 million in cash and 1 million shares.

The Eau Claire deposit sits in the western end of the property, 2.5 km from Hydro Quebec’s road network and 15 km from a power plant.

Robinson says Eau Claire is a gold-tellurium system, with two metallic components to the deposit: free gold and tellurides within quartz-tourmaline veins and altered rock.

There are 85 of these veins on the project, which are typically 1 to 4 metres wide. However, drilling in both 2012 and 2013 intersected wider mineralized zones, such as hole 13-501 hitting 12.5 metres of 10.54 grams gold per tonne.

 “It’s not only a narrow vein anymore, we have identified zones in the project within a few hundred metres of surface that are multiples in thickness and high grade that we didn’t know before, and we have unravelled a geological control that we didn’t know before,” Robinson says. 

Earlier this year, the company explained that the 2013 drilling results confirmed that there were at least three stages of gold mineralization at Eau Claire, with “east–west trending, high-grade feeder veins cross-cut northwest- and northeast-trending altered gold-bearing rocks, and are in turn cut by later gold mineralization.”

Robinson says in an email that “Recent modelling of the gold deposit illustrates that in addition to 2-metre-wide, high-grade gold-bearing quartz tourmaline veins, there are gold-bearing northwesterly trending structures which generally follow the foliation — or layering — in the host rock. Wider gold-bearing zones result at the intersection of the dominant east–west trending quartz-tourmaline veins with these northwesterly structures. Furthermore, these wider zones form continuous gold-bearing domains between the veins within the Eau Claire deposit.

“These wider gold-bearing cross structures have been identified in a number of locations within the Eau Claire gold deposit which are influenced by and aligned sub-parallel to a hangingwall porphyry dyke swarm and an internal felsic volcaniclastic unit.”

Work to date shows that there are at least two higher-grade domains: one at surface, and the other within 150 to 300 metres of surface. “Our objective is to find critical mass within the top 300 metres that will support developing the deposit,” Robinson says.

Mineralization at the deposit extends 1.8 km along strike and to a vertical depth of 900 metres. 

The company’s near-term goal at Eau Claire is to finish the deposit’s 3-D modelling and wire framing, which will help form the block model resource update this year, Robinson says. After that, Eastmain expects to complete a preliminary economic assessment in 2015.

A 2011 resource estimate outlines an open-pittable uncapped gold resource of 4.2 million measured and indicated tonnes grading 4.67 grams per tonne gold for 635,000 oz., and 2.5 million inferred tonnes at 2.58 grams gold for 213,000 oz.

It has an underground and uncapped gold resource of 760,000 measured and indicated tonnes grading 6.37 grams for 145,000 oz., and 4 million inferred tonnes at 7.2 grams for 935,000 oz.

The resource includes 395 drill holes, or 95,000 metres of drilling. It used a gold price of US$1,158 per oz. and gold cut-off grades of 0.5 gram per tonne for the pit and 2.5 grams per tonne for the underground.

Eau Claire is one of the highest-grade undeveloped gold projects in North America, Robinson says, noting the company would incorporate 70,000 metres of new drilling into the resource update.

Eastmain wholly owns the Eastmain mine property — also in the James Bay region — and has a 38.6% interest in Goldcorp’s Éléonore South project, south of the Éléonore mine.

As of July 31, the junior had $5.1 million in its treasury. It intends to spend $1.8 million by year-end, mainly on its Eau Claire and Eastmain deposits.

The junior closed Sept. 22 at 28¢, within a 52-week window of 21¢ to 56¢. It has a $33.6-million market capitalization.