| Eastmain Resources Inc. |
Third Quarterly Report
TSX: ER | |
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THIRD QUARTERLY REPORT
for the period ending July 31, 2008
In one of the most successful quarters to date your Company increased its treasury to over $20M. Through private placement investments, Eastmain has received endorsement for its exploration efforts once again from it's major partner Goldcorp, and from several significant institutional banks and investment funds. By choosing to improve Eastmain's financial position while higher gold prices sustained higher share price and volumes, we have secured our ongoing exploration plans for the next several years. Drilling at Clearwater continues to uncover more gold, while exploration of other earlier stage projects provides our shareholders with opportunity for new discoveries.
Clearwater Project- Eau Claire Deposit
Our near-term objective at Clearwater is to "drill under metal" to discover new deposits and add near surface, high-grade, quality ounces that can be mined at low cost. In an effort to expand the lateral and vertical extent of the gold deposit and to define high-grade measured resources, which might be extracted by open pit methods, diamond drilling is on-going at Eau Claire.
Previous drilling outlined a substantial gold-bearing "footprint" for a length of 1.5 kilometres and to a depth of 900 metres. Current drilling is systematically testing the deposit over a length of 600 metres and to a vertical depth of up to 300 metres, utilizing large-diameter HQ core in closely-spaced drill holes.
To date, this definition drilling has demonstrated excellent continuity of the main group of veins both laterally and vertically. 29 holes (ER08-113 to ER08-141) have been completed for approximately 5,400 metres. Visible gold has been observed in over 50 veins from 23 different holes. Similar visible gold intercepts observed in 55 veins drilled during the 2007 program contained an average of 70.74 g/t gold or 2.07 ounces per ton. Typically gold occurs as a fine dusting within the veins, ranging from isolated grains to multiple clusters from < 1mm to 2 mm in size. The current program has also been successful in the discovery of a new vein series (T Vein) containing visible gold, which lies north or footwall to the deposit.
Results to date demonstrate that the larger diameter core combined with closer-spaced drill holes has delineated more gold. Drilling completed during the 2007 program intersected 100 vein intersections containing an average grade of 28.03 g/t gold or 0.82 ounces per ton over 1.25 metres, including 50 vein intersections with an average grade of 50.01 g/t gold or 1.46 ounces per ton. Highlights from 2007 included hole ER07-87, which assayed 79.76 g/t gold or 2.33 ounces per ton across 3.5 metres and ER07-98, which intersected a metre-wide vein at 1,313 g/t gold or 38.35 ounces per ton, including one halfmetre sample at 2,540 g/t gold or 74.2 ounces per ton.
Drilling will continue as weather permits into the fall. Approximately 10,000 metres of drilling has been outlined for this program.
Eastmain Mine/Ruby Hill Project
Twenty-nine drill holes for approximately 6,000 metres have been completed on the Ruby Hill West and Ruby Hill East claim blocks. The program was designed to test geophysical conductors coinciding with Eastmain Mine-type rocks regionally. Though still early stage, drilling successfully intersected mine series rocks containing sulfide and graphite-bearing units, the presumed source of the airborne geophysical (electromagnetic) anomalies, regionally across the area.
Exploration of the Eastmain Mine block, to test the lateral and depth extensions of the Eastmain gold deposit, will begin this winter. Winter drilling will allow access of a larger, deeper penetrating tractor-supported drill rig, rather than the lighter helicopter-based drill system utilized at Ruby Hill.
The Eastmain Mine project is part of our longer-term business plan of advancing and expanding existing gold resources to the development stage through drilling, in the hopes of ultimately selling these assets to a producing company while maintaining royalty interests. An initial drill program of approximately 10,000 metres of staged drilling has been planned for the project for 2008/2009.
Eleonore South JV
Exploration at Eleonore South is expected to continue with a winter drill program. First-phase drilling at �l�onore South has intersected altered and mineralized sediments in the JT Target area and elsewhere, confirming that the mine sequence extends onto the property. The joint venture partners are encouraged with the progress made to date and additional drilling will be funded by Goldcorp's wholly-owned subsidiary Les Mines Opinaca Ltee ("Opinaca"). Eastmain will remain as the project manager until Opinaca elects to take over as Operator of the project. Eastmain will retain a 30% carried interest upon completion of bankable feasibility by Opinaca.
Financial
The Company's current assets, comprised of cash, cash equivalents and short-term investments total $21.6M. During the period, the Corporation completed a bought deal financing for gross proceeds of $16.02M. The private placement was underwritten by a syndicate led by Macquarie Capital Markets Canada Ltd., which included Genuity Capital Markets and Laurentian Bank Securities Inc. In addition, $750,000 was received through the exercise of warrants priced at $1.50 per share and $1.28M received from exploration rebates from Province of Qu�bec.
Outlook
During the reporting period Genuity Capital Markets issued a revised speculative buy recommendation with a new target price of $2.60 per share. The Company is very well financed with excellent core assets located in one of the most favourable mining districts in the world. Our largest shareholder, Goldcorp Inc., is developing their own mine in the district, which may provide some compelling synergies for the future development of key Eastmain assets.
Drilling at Clearwater continues to produce an impressive number of veins containing visible gold. Drilling will continue into the fall at Eau Claire to systematically add to potential near-surface, open pit gold resources.
"Building for tomorrow, today!"
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