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Snapshot

  • Ownership 

    100% 

  • Clearwater Property Size and Location

    20,068 km2 - EEYOU ISTCHEE, JAMES BAY, QUEBEC

  • Stage

    PRE-DEVELOPMENT (PEA Animation)

  • Potential Mining Method

    OPEN PIT AND UNDERGROUND

  • Preliminary Metallurgy

    95%

  • Updated Mineral Resource Estimate (effective Feb. 4, 2018)1-6

    M&I - 4,294,000 TONNES @ 6.18 g/t Au - 853,000 OUNCES

    Inf - 2,382,000 TONNES @ 6.53 g/t Au - 500,000 OUNCES

    Eau Claire Gold Deposit Open Pit and Underground Mineral Resource Estimate
      OPEN PIT (Surface – 150m) UNDERGROUND (150m – 860 m)
    Tonnes Gold Grade
    (g/t)
    Contained Au
    (oz)
    Tonnes Gold Grade
    (g/t)
    Contained Au
    (oz)
    M&I 1, 210,000 5.86 228,000 3,084,000 6.30 625,000
    Inferred 43,000 5.06 7,000 2,339,000 6.56 493,000
  •  

See footnotes

  1. Mineral resources which are not mineral reserves do not have demonstrated economic viability. All figures are rounded to reflect the relative accuracy of the estimate. Composites have been capped where appropriate.
  2. The Mineral Resources in this press release were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM"), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions.
  3. Open pit Mineral Resources are reported at a cut-off grade of 0.5 g/t gold and underground Mineral Resources are reported at a cut-off grade of 2.5 g/t gold. Cut-off grades are based on a gold price of US$1,250 per ounce, a foreign exchange rate of US$0.80, and a gold recovery of 95%.
  4. The results from the pit optimization are used solely for the purpose of testing the “reasonable prospects for economic extraction” by an open pit and do not represent an attempt to estimate Mineral Reserves. There are no Mineral Reserves on the Property. The results are used as a guide to assist in the preparation of a mineral resource statement and to select an appropriate Mineral Resource reporting cut-off grade.
  5. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, socio?political, marketing, or other relevant issues.
  6. The Inferred Mineral Resource in this estimate has a lower level of confidence that that applied to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of the Inferred Mineral Resource could be upgraded to an Indicated Mineral Resource with continued exploration.
 

Location, Accessibility, Climate, Local Resources, Infrastructure and Physiography

Eastmain owns a 100%-interest in the Clearwater Property, host to the Eau Claire Project, one of five known gold deposits in the Eeyou-Istchee/James Bay region of Québec. The largest of these, the Newmont Goldcorp Corporation-owned Éléonore Mine, located only 57 km due north of the Eau Claire Project.

The Clearwater Property is located immediately north of the Eastmain Reservoir, 10 km northeast of Hydro Quebec's EM-1 hydroelectric power facility, 80 km north of the town of Nemaska and approximately 320 km northeast of the town of Matagami and 800 km north of Montreal in the James Bay Region of Québec (UTM NAD 83, Zone 18: 444,000E; 5,785,000N). This property consists of map-designated claims, (CDC’s) totalling approximately 220 km2. These claims are held 100% by Eastmain. All claims are currently in good standing through to 2020. The Property is not subject to any historic environmental liabilities. Permits are obtained annually for the Clearwater camp site and as needs dictate for all surface exploration, particularly trenching and drilling, undertaken on the property.

The Property is located 80 km north of a commercial airport at Nemiscau and less than 10 km northeast of Hydro Québec's EM-1 complex. The Eau Claire gold deposit is situated at the western end of the property 2.5 km from Hydro Québec's nearest service road. The property is accessible by the all-weather Route du Nord from the town of Chibougamau to Hydro Quebec's Eastmain One power generation complex (EM-1). Alternatively, the property may be accessed from the town of Amos via Mattagami and the Route de la Baie James and the Route du Nord. The Nemiscau Airport, located 80 km due south of the Property along the Route du Nord, has several commercial flights per week from Montreal.

Road access reaches the southern boundary of the property, five km east of Hydro Québec’s principal EM-1 dam, located on the Eastmain River. The base camp is accessible by four-wheel drive truck, ATV or snowmobile.

The area is well known for its extensive hydroelectric complex and associated infrastructure. Hydro-Québec’s EM-1 Power Project currently includes a 100-person camp with full amenities and medical support. The principal dam is situated near the junction of the Eastmain and Eau Claire Rivers. The Eastmain reservoir for the EM-1 hydroelectric power facility covers a large area immediately south of the Clearwater Project. Future development of the property will require access and infrastructure improvements near EM-1 requiring consultation with the energy provider. Power production from EM-1 is 6.3 TWh/annum (Hydro Review, June 2014).

The region and the property include many lakes and rivers. The topography is gently rolling to flat-lying with local relief ranging from 250 to 400 m above sea-level. Outcrop exposure is limited. Large, east-west trending outcrop ridges and coarse sand eskers, flanked by lower troughs provide moderate drainage over most of the area. There is an abundance of quaternary deposits and swamps. The area is drained by the Eau Claire River, which in turn drains into the Eastmain River and the Opinaca reservoir. Vegetation is common and includes large areas covered by sparse forest (mainly spruce) and many smaller mostly swampy areas devoid of trees. Forest fires have burnt much of the region in the recent past.

The climate is typical of Northern Canada (temperate to sub-arctic climate) with average summer (June to September) temperatures varying from 10oC to 35°C during the day and 5°C to 15°C during the night. Winters can be cold, ranging from -40°C to -10°C. Precipitation varies during the year, reaching 2 m annually, with snow cover expected from November to May. However, exploration and mining can generally be carried out year-round.

Geology 

The James Bay region is mainly comprised of La Grande (formerly Eastmain River Greenstone Belt) and Opinaca sub-provinces. The Clearwater Property is underlain by typical Archean greenstone assemblages of the La Grande Group, which are essentially composed of volcanic rocks of basaltic to rhyolitic composition and of related clastic and chemical sedimentary rocks. These rocks have been intruded by an assemblage of mafic to felsic sills, stocks and dykes. Metamorphism ranges from upper greenschist to amphibolite facies in the greenstone assemblages, while higher-grade facies, up to granulite level, typically characterize the Opinaca sub-province. Archean-aged deformation affects all rocks on the property. Near the Eau Claire deposit, the volcano-sedimentary assemblage has been folded, forming a closed antiform plunging gently to the west. Regional rock foliation and lithology are generally east-west in strike with moderate to sub-vertical southerly dips in the vicinity of the gold deposit.

A structural interpretation based on field evaluation and interpretation of high-resolution airbourne magnetic surveys flown over the Clearwater Property has defined three major deformation events (D1, D2 and D3) on the property. Based on interpretation, a crustal scale, east-west trending, D2 structural break has been traced for more than 100 km across the district. Gold mineralization, including that found in the Eau Claire deposit, has been traced via rock and channel sampling for a length of 7.5 km immediately north and parallel to this regional D2 structure, locally called the Cannard Deformation Zone (“CDZ”). The Eau Claire gold deposit is a structurally-controlled gold deposit, consisting of en-echelon sheeted quartz-tourmaline veins and altered rock coinciding with a mafic volcanic/felsic volcaniclastic contact, along the south limb of an F2 anticlinal fold. At Eau Claire, gold-bearing quartz-tourmaline veins and alteration zones occur sub-parallel to the F2 fold axis, and related to a D2 structural event. The deposit is situated approximately one km north the CDZ.

Over 90% of the gold-mineralization at Eau Claire occurs within iron and magnesium rich tholeiitic basalts. In the hanging wall to the deposit these basalts are intruded by a quartz-feldspar porphyry dyke swarm. A felsic volcaniclastic unit is located in the footwall. The Eau Claire deposit is comprised of two zones (450 West and 850 West) which form a crescent-shaped body extending for a length of 1.8 km. For exploration purposes the limits of the known deposit are defined by a 0.5 g/t Au grade envelope. Portions of the 450 West and 850 West zones outcrop on topographic highs. Along the 450W zone, a thick sequence of porphyry occupies the hanging wall to the mineralization and is believed to contribute structurally to the development of the vein system while at the 850W zone quartz-tourmaline veining crosscuts the porphyry intrusions.

 

Metallurgy

Overall gold recovery by gravity separation + gravity tailing cyanidation yielded results in the 2017 program that compared very well to test work completed in 2010.  Gold recovery from the 2010 Master Composite (at a 14.8 g/t Au head grade) was 95.7% with a final tailing grade of 0.66 g/t Au. In the 2017 program, overall gold recovery from a head grade of 4.85 g/t Au was approximately 96%, with a final tailing grade of approximately 0.20 g/t Au.

Preliminary Economic Assessment

An updated NI 43-101 Mineral Resource Estimate with an effective date of February 4, 2018 was announced in conjunction with the PEA in May 2018.

Open Pit and Underground Mineral Resources (effective February 4th, 2018)(1-6)

  Open Pit (surface to 150 m) Underground  (150 m – 860 m)
Category Tonnes (g/t Au) Contained Au (oz) Tonnes (g/t Au) Contained Au (oz)
Measured 574,000 6.66 123,000 332,000 6.56 70,000
Indicated 636,000 5.13 105,000 2,752,000 6.27 555,000
Measured & Indicated 1,210,000 5.86 228,000 3,084,000 6.30 625,000
Inferred 43,000 5.06 7,000 2,339,000 6.56 493,000
 

See footnotes

FOOTNOTES: “Mineral Resource Footnotes (1-6)”

  1. Mineral resources which are not mineral reserves do not have demonstrated economic viability. All figures are rounded to reflect the relative accuracy of the estimate. Composites have been capped where appropriate.
  2. The Mineral Resources in this press release were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM"), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions.
  3. Open pit Mineral Resources are reported at a cut-off grade of 0.5 g/t gold and underground Mineral Resources are reported at a cut-off grade of 2.5 g/t gold. Cut-off grades are based on a gold price of US$1,250 per ounce, a foreign exchange rate of US$0.80, and a gold recovery of 95%.
  4. The results from the pit optimization are used solely for the purpose of testing the “reasonable prospects for economic extraction” by an open pit and do not represent an attempt to estimate Mineral Reserves. There are no Mineral Reserves on the Property. The results are used as a guide to assist in the preparation of a mineral resource statement and to select an appropriate Mineral Resource reporting cut-off grade.
  5. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, sociopolitical, marketing, or other relevant issues.
  6. The Inferred Mineral Resource in this estimate has a lower level of confidence that that applied to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of the Inferred Mineral Resource could be upgraded to an Indicated Mineral Resource with continued exploration.
 
 

Using the updated mineral resources, Eastmain completed its Preliminary Economic Assessment. The PEA demonstrated robust economics for a combined open pit and underground mining operation with a mine life of 12 years.

PEA Highlights

  • Base Case $1,250 per gold ounce; Exchange Rate: $0.80
  • Pre-tax Net Present Value at 5% discount rate (“NPV5%”):  $381 million
  • After-tax NPV5%:  $260 million
  • Pre-tax Internal Rate of Return (“IRR”):  32%
  • After-tax IRR:  27%
  • After-tax Payback:  3.1 years
  • Pre-production Capital Cost, including contingency:  $175 million
  • Life of mine (“LOM”) Sustaining Capital Cost:  $108 million
  • Average LOM Total Cash Cost:  $632 Au per ounce (oz) (US$486/oz)
  • Average LOM All-In Sustaining Costs (“AISC”):  $746/oz Au (US$574/oz)

PEA Key Inputs

  • Life of Mine:  12-year mine life (3 years open pit, 10 years underground)
  • Years of Full production:  10
  • Open Pit Strip Ratio:  9.4:1
  • Total Open Pit Dilution:  26%
  • Main Underground Mining Method:  Captive Longhole
  • Total Underground Dilution:  40%
  • Average Mining and Processing throughput:  1,500 tonnes per day (“tpd”)
  • Process Plant Recoveries:  95%
  • Average Annual Production (LOM):  79,200 oz gold
  • Average Annual Production (yrs 1-10):  86,100 oz gold
  • LOM recovered gold production:  951,000 oz
  • Several upside opportunities identified to further improve project economics

Potentially Extractable Portion of Mineralization for Mine Planning Purposes

The PEA demonstrates that approximately 71% of the 2018 updated Mineral Resources are potentially extracted under the mine plan supported by the PEA. For purposes of mine planning, the Potentially Extractable Portion of Mineralization is comprised of 6.4 million tonnes at a diluted grade of 4.9 g/t Au, containing just over 1 million ounces of gold. The mineralized material modeled to be mined in the PEA contains Mineral Resources classified in the Inferred category (30%) which cannot be considered Mineral Reserves. These Inferred resources will require further exploration and definition to meet the criteria to be classified as Indicated or Measured Mineral Resources before being considered for conversion to Mineral Reserves at the next level of detailed economic study.

Table 3. Potentially Extractable Portion of the Mineral Resource Estimate (diluted and extracted)(1-4)

  Tonnes Grade (g/t Au) Contained Au(Oz)
Pit Production 1,641,000 3.78 199,000
UG Production 4,762,000 5.24 802,000
Total Production 6,403,000 4.87 1,001,000
 

See footnotes

  1. Mineral resources, which are not Mineral Reserves, do not have demonstrated economic viability. Environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues may materially affect the estimate of Mineral Resources.
  2. The Inferred Mineral Resource in this estimate has a lower level of confidence that that applied to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of the Inferred Mineral Resource could be upgraded to an Indicated Mineral Resource with continued exploration
  3. The potentially extractable portion of the Mineral Resource Estimate was prepared by Eugene Puritch, P. Eng., FEC, CET and Andrew Bradfield P.Eng. of P&E Mining Consultants Inc. Mineral Resource Estimate reported in this press release was estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions.
  4. The potentially extractable portion of the Open pit Mineral Resources are reported at a cut-off grade of 0.66 g/t gold and the potentially extractable portion of the Open pit Mineral Resources underground Mineral Resources are reported at a cut-off grade of 2.7 g/t gold. Cut-off grades are based on a gold price of US$1,250 per ounce, a foreign exchange rate of US$0.80, and a gold recovery of 95%. Table entries are rounded.
 
 

Mine Plan

Proposed mining would commence with open pit mining followed by underground mining. The PEA proposes a conventional truck and shovel open pit operation, followed by ramp access and captive long-hole open stoping in the underground portion of the mine. The mine plan is to extract the upper portions of the Mineral Resources (top 100 metres) using open pit mining methods. While the open pit is producing, an underground portal will be established outside of the pit and an underground ramp will be extended below the proposed crown pillar.

The PEA schedule assumes mining of 1,641,000 tonnes of mineralized material at 3.78 g/t Au for 199,000 oz Au contained over three years from the two open pits. The open pit operations consist of production from the Main Pit (650 m x 275 m x 100 m depth) and the smaller West Pit (260 m x 120 m x 40 m depth), to be mined at a bench height of five metres. The open pits have an average strip ratio of 9.4:1.

Underground mining will progress by captive longhole methods in a top-down fashion with major sublevels every 24 metres. The underground operation assumes mining of 4,762,000 tonnes of mineralized material grading 5.24 g/t Au for 801,500 oz over 11 years. The average planned dilution factor was conservatively applied at 40% at zero dilution grade.

The PEA schedule assumes a combined open pit and underground operations of 6,403,000 tonnes of mineralized material at blended grade of 4.87 g/t Au for 1,001,000 contained oz Au over 12 years.

Processing and Recovery

Gold mineralization will be processed in a 1,500 tpd process plant using conventional crushing, grinding, cyanidation and Carbon In Pulp (“CIP”) processes. The conventional cyanidation circuit includes a gravity concentration within the grinding circuit followed by direct cyanidation of gravity tails. The PEA recovery factor relies on metallurgical test work conducted by SGS Lakefield Research Limited which indicates gold recovery of 95% is attainable with gravity and cyanidation processes. A bond ball mill index of 11.0 kWh/t indicates material will not require high energy to be processed. 

Infrastructure & Tailings

Power to the Project will be sourced through an 18 km power line from a substation at the Hydro Québec Eastmain power dam to the project site. Site overall power consumption will average 7 MW.

Tailings will be dewatered in the process plant and transported by truck to a geomembrane-lined Tailings Management Facility (TMF), reducing risk for potential surface and groundwater contamination. The TMF design will incorporate engineered features to manage the chemical and physical stability of the deposited tailings in accordance with current best-in-class practices. This mitigation strategy is similar to those at other operations in the region.

Major surface facilities to support the Eau Claire Project will include an administration and engineering building, security, warehouse, fuel and explosive storage, fire protection, maintenance shops and a mine camp that can accommodate 200 people.

Selected Eau Claire Estimation Parameters for Open Pit and Underground Mineral Resources

Exchange rate US$0.80 = C$1.00
Gold price (per ounce) US$1,250 / C$1,563
Estimation method ID3 interpolation
Drill spacing:  
                450W outcrop (0 m – 100 m depth) 12.5 m – 25 m
                Deposit core (100 m – 400 m) 25 m
                Balance of the deposit >25 m
Block model 5 m x 5 m x 5 m
Composites required:  
Measured 6 composites, 2 drill holes, w/in 20 m x 20 m x 5 m
Indicated 6 composites, 2 drill holes, w/in 45 m x 45 m x 15 m
Inferred 3 composites, 1 drill hole, w/in 100 m x 100 m x 20 m
Open pit cut-off grade 0.5 g/t Au
Underground cut-off grade 2.5 g/t Au
Process recovery 95%
Assumed operating costs  
Open pit mining cost (per tonne mined) US$2.80 / C$3.50
Underground mining cost (per tonne mined) US$56.00 / C$70.00
General and administrative (per tonne processed) US$4.00 / C$5.00
Processing cost (per tonne processed) US$16.00 USD / C$20.00
Mining loss / dilution (open pit) 5% / 5%
Assumed overall pit slope angle 50 degrees
Capped grades:  
450W Zone 120 g/t Au (QT); 45 g/t Au (HGS, NW, WNW, Extra)
850W Zone 40 g/t Au (QT); 10 g/t Au (others)

Capital Costs and Sensitivity

Table 5. Capital Cost Summary

Input  (all C$M) Pre-Production Sustaining LOM
Development 21.8 84.3 106.1
Equipment & Infrastructure 42.9 - 42.9
Tailings 4.6 5.5 10.1
Process Plant 67.1 0.5 67.6
Owner Costs 11.0 - 11.0
Contingency (20%) 27.3 18.0 45.3
Total Capital Costs 174.7 108.2 282.9
 

Sensitivity Analysis

PROJECT SENSITIVITY ANALYSIS (after-tax)
% -5% Base Case 5% 10% 15% 20%
US$/oz 1,188 1,250 1,313 1,375 1,438 1,500
NPV ($Millions) 226 260 295 329 363 397
IRR % 24 27 29 32 34 36