|
· Yesterday, after market open, Eastmain reported metallurgical results and the final assay results for 16 holes from its 48-hole (14,619 metre) 2009 winter drill program on its 100%-owned Eau Claire Deposit in James Bay lowlands, northern Quebec.
· Metallurgical test work indicates total gold recoveries ranging from 95.7% for the coarse-grind, gravity-flotation-cyanidation combination, to 98.8% for the fine-grind, gravity-leach combination. These excellent results suggest extremely high recovery rates for both the coarse and fine visible gold. Tellerium (Te) and Bismuth (Bi) contents continue to be documented in the gold-bearing mineralization, which have potential as by-product credits.
· Assays returned high grade gold intersections, with seven holes documenting visible gold. Results included: 1) 37.98 g/t over 1 metre immediately followed by 3.15 g/t over 7 metres (hole 232); ii) 41.10 g/t over 0.5 metres (hole 233); and 2) 26.70 g/t Au over 0.5 metres (hole 237). In addition, seven holes with vertical depths between 115 metres and 225 metres, intersected high-grade T-Vein intervals of 0.5-12.5 metres thick ranging from 0.63 g/t to 25.80 g/t; however, additional infill drilling is required to evaluate the T-vein resource potential.
· Impact is positive for the metallurgy and assay results. Given these excellent recoveries from preliminary metallurgy and potential for +2moz of gold resource, we continue to believe that Eau Claire will register on various mid-tier producer radar screens, as it could be attractive as a development project with an initial starter pit. A revised resource estimate for Eau Claire is expected in Q2/10. The current resource is 313.2koz of indicated gold at 9.46g/t, 679.5koz of inferred gold at 6.93 g/t.
· We maintain our BUY recommendation and target price of $2.00. Our valuation is mainly based on an approximate in situ US$50.00 EV/oz value for the Eau Claire gold deposit indicated and inferred resources, and our estimate of potential resources. Pending resource definition and feasibility, we expect the Eau Claire deposit will either be custom milled at the to be built Eleonore mine complex, or at an on-site mill at Eau Claire as a standalone operation.
|