Interview with Claude Lemasson, President and CEO of Eastmain Resources Inc. (TSX: ER): Assembled a Strong New Board and Management Team, Created a Strategic Partnership with Integra Gold and Aggressively Drilling
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By Dr. Allen Alper, PhD Economic Geology and Petrology, Columbia University, NYC, USA
on 7/9/2016
Eastmain Resources Inc. (TSX: ER) is a Canadian exploration company with three promising projects in
the James Bay area of Northern Quebec. In the last few months, the Company underwent significant changes,
assembled a strong new board and management team, and also formed a strategic partnership with Integra
Gold. Recently, Eastmain was able to raise money sufficient to fund all of the company's exploration
drilling programs for this year and next year. Eastmain believes that the combination of aggressive
exploration of great assets with the uptrend for gold will bring positive changes to the company. Claude
Lemasson, President and CEO of Eastmain Resources
Dr. Allen Alper: This is Dr. Allen Alper, editor and chief of Metals News interviewing Mr. Claude
Lemasson, President and CEO of Eastmain Resources Inc. It looks like a lot of exciting things are
happening at Eastmain. Could you tell our readers about everything that’s happening? I see you have a lot
of funding for drilling.
Mr. Claude Lemasson: Thank you sir, that's correct. We've made some significant changes in the company
in the last few months, particularly since early April when we announced a change at the board of
directors’ level as well as a change in management. We felt that the assets of the company were very
significant and needed a fairly important change to take them to the next level. We have a high quality
world class board with new board members, as well as a new management team. I took over as the CEO and
President of the company, on April 29th at our AGM. We've devised a new vision and a new strategy for the
company with some great assets.
We're now moving on that plan in a significant way this year. We did execute two separate
financings. One was a strategic partnership with Integra Gold, a junior company also operating in Quebec,
a little bit more advanced than we are, who invested in our company. We also announced a more recent
financing last week. That means our funding is in place, not only for this year’s program, which is an
aggressive exploration program on three different properties, but also next year’s program is well funded.
Dr. Allen Alper: That’s great, that's excellent news! By the way I interviewed Stephen de Jong and
did a featured article on Integra Gold. So your article will fit very well with theirs.
Mr. Claude Lemasson: Okay great, that's good to know.
Dr. Allen Alper: Could you tell me a little bit more about what differentiates Eastmain from other
companies? What makes it so interesting?
Mr. Claude Lemasson: We've have quite a few features that are very interesting. We are exclusively in
the James Bay area of Northern Quebec, a highly prospective area, fairly untapped. 10 years ago there
wasn't much happening in that part of the world. There was the advent of the Éléonore mine, which now
belongs to Goldcorp, one of the major gold companies in the world. They have the Éléonore mine, which has
been producing since 2014. Our assets are relatively near the Éléonore mine, but we're spread out
throughout the James Bay area. We have three key projects combined with another eight strategic land
positions, all prospective, mostly for gold. Some of them have base metals as well, but we are mostly
focused on gold. The three key projects we have are all at different stages.
Our Clearwater project, which hosts the Eau Claire deposit and has a measured and indicated resource, is
certainly considered our anchor project. We have around a million ounces of measured and indicated
resource plus another 600,000 ounces of inferred. This is a project that we want to drill off some more
and increase the resource from both a quantity perspective, as well as a quality perspective, so we can
move that project towards the study stages and ultimately towards a definitive feasibly study within the
next two to three years.
The second project is the Eastmain Mine project, a past producing mine we are completely revisiting, with
new exploration targets on the mine trend within the mine site. We are initiating a fairly aggressive
program on the Eastmain Mine project this year.
The third one is the Éléonore South joint venture. I mentioned the Éléonore mine from Goldcorp. The joint
venture is next door. It is a property that has contiguous boundaries with the Éléonore property. It is a
three-way joint venture between ourselves, Goldcorp and Azimut, another junior exploration company from
Quebec. We have identified a significant geochemical anomaly on the property. Based on that signature, we
are pursuing an aggressive drilling program there for this year.
Each of three projects will see very aggressive drilling programs this year.
Dr. Allen Alper: Great, that's great news! By the way I'm a stockholder so I’m glad to see what's
going on.
Mr. Claude Lemasson: Oh very good.
Dr. Allen Alper: Could you tell me a little bit more about the team and yourself?
Mr. Claude Lemasson: Absolutely. I joined, as an independent director of the company in November 2015.
Through some review work, we decided to make some significant changes to the Company. I remained on the
board, and also became President and CEO in April 2016. I have 30 years in mining, mostly related to
mining projects, taking them from advanced exploration right through feasibility study, into construction
and ultimately into operations. I worked in operations for quite a few years as well. I'm used to looking
at these multimillion ounce deposits and moving them forward through the various cycles to become a gold
mine. I spent 10 years with Goldcorp. I was the project manager who built the Red Lake mine in
Northwestern Ontario for Goldcorp in 1999-2000. Then I became the mine’s general manager for six years at
Red Lake. Then I moved to Toronto after a promotion within Goldcorp, where I was responsible for the
Éléonore project, which became the Éléonore Mine, referred to earlier.
I was responsible for that project for three years from 2006 to 2009. Following that, I joined
Guyana Goldfields as the President and COO, and moved that project forward from resource estimate to
feasibility study from 2009 to 2012.
What we’re doing at Eastmain is my area of expertise. I've been
building an excellent and very strong team here in Toronto. We added a CFO, Joe Fazzini, who was
previously a mining analyst, very experienced on the street with a financial background. He is a CA as
well as a CFA. We added a new investor relations manager, Alison Dwoskin, you will see her name on some of
our press releases and correspondence. She comes with a significant amount of experience with Junior
mining companies.
We recently added a project engineer, Manuel Ng-Lai, who has a lot of experience with modeling,
block modelling and working with early resources and moving through the different study stages. I'm in the
final throws of hiring a vice president of exploration who will oversee all of our projects in Quebec. He
will be announced probably in the next 10 days or so. This team will move our projects through the fairly
aggressive programs this year, and an even more aggressive program next year.
Dr. Allen Alper: That’s fantastic! You have a great background. You’re assembling a great team.
Could you tell me a bit more about your board?
Mr. Claude Lemasson: Our board is unique. Three new members of the board joined prior to late April
this year. Laurie Curtis came in as chairman in late September 2015. His mandate was to keep on
strengthening the board from a technical and project mine-building perspective. After he came on board, he
approached me and I joined the board as well. In March 2016, we added another strong executive with a
great background, Mike Hoffman, a mine engineer. The three of us stayed on the board as part of the
changes we made in late April. All three of us are still on the board. Now we have a new board of seven in
total.
One of the four we added is Steve De Jong, President and CEO of Integra, who operates a great
project in Quebec, and is moving that forward. His chairman from Integra, George Salamis, also joined our
board. Then two completely independent directors joined. One is Blair Schultz very well known on the
street from his background with K2 and Klondex. Another is Timo Jauristo, who was a corporate development
senior executive with Goldcorp whom I knew to be excellent. Some very, very qualified individuals, with
many years of great experience from multiple aspects of the business! They are able to help raise money
and look after these kinds of projects and guide management through potential development and ultimately
production. An extremely strong board for such a small junior mining company!
Dr. Allen Alper: You've put an excellent board together. That's really great! That's a very strong
board. Could you tell me a bit more about your capital structure and your finances?
Mr. Claude Lemasson: Yes, absolutely. We did raise some money in the last two months through two
different transactions. The first was a flow-through funding transaction in early April. Then we proceeded
with completing a strategic partnership and investment with Integra Gold, where they invested $6 million
themselves. The total in the first phase of the financing was around $11 million that we put in the
treasury. We're in the middle of a financing now, which will be completed in July, but basically we were
able to raise another $11 million as well. We ended up bringing into the treasury $22 million in the last
two months or so. That allows us to fund all of our exploration this year and next year.
My budget this year is around eight and a half million. Next year will potentially be greater,
based on success as we move our projects forward. Our shares outstanding are just under 161 million
shares. This most recent financing will increase that to just under 175 million shares. Our market cap is
around 100 million at this point, this is in Canadian dollars. Our share price has been hovering around
the 58 to 60 cents mark Canadian. We're listed on the TSX under ER; the letters for Eastmain Resources,
ER. We've significantly increased the volume as well in the last three months. We're now averaging well
over 1.3 million shares traded on daily basis. A very fluid stock, very available. We've also been able to
increase our analyst coverage from the street through different brokerage firms. Macquarie has been
covering us for a few years. He's completely renewed his analyst report and there have now been four more
analysts that have joined and started reporting on us, including Beacon Securities, Paradigm Capital,
Markie Research and Cormark Securities. All of them have issued formal independent reports on the company,
very good and very strong reports.
Dr. Allen Alper: That's an excellent job, it's really remarkable. It's great to have the funds to
carry out that extensive drilling programs. That's really great. Could you tell me the primary reasons why
our high-net-worth investors/readers should invest in your company?
Mr. Claude Lemasson: First of all we do have a very strong shareholder base. When two of your key
shareholders, major shareholders are gold mining companies, both of them experienced in Northern Quebec,
Goldcorp being one of the shareholders of our company as well as Integra Gold, both in the eight to ten
percent range, that is a really strong endorsement of what we're doing with the company. We have very
well-known major institutional funds that have also supported us over time, but more recently as well. For
the retail investor, this is very interesting because it really taps into two sides of what we do. First
of all reviving a company with great assets, really putting it back on the map with a very aggressive
strategic plan to execute on significant drilling programs as well as moving three key projects forward,
but also the other side is the gold business.
We're mainly gold-focused. Gold has been on an uptrend since the beginning of this year. I think
that this combination of aggressive exploration with great projects and great assets in a pipeline
combined with the movement of gold over medium term, not necessarily short term being up and down, but
medium term being an uptrend, at that point the valuation of this company could significantly change in a
positive fashion certainly in the next few months to the next year to two years.
Dr. Allen Alper: That sounds excellent. Is there anything else that you would like to add?
Mr. Claude Lemasson: I think we’ve covered a lot of what your readers certainly should know and your
investors that follow you. I've covered the three key projects. I talked about how significant the land
package is in this pipeline that we have. The other thing is the area that we're in, Northern Quebec, but
particularly the James Bay area is really a great area to be in because it's largely untapped. It has nine
small Cree aboriginal communities. We have excellent relationship with them and they are pro-development.
Hydro-Quebec has been developing hydro projects in that part of the world for the last 50 years. Therefore
they've implemented large programs with great infrastructure including roads, airstrip and available power
nearby.
It is a great area to be in for mining, to develop mines, great jurisdiction with great
infrastructure and politically stable. We're talking about Canada, we're talking about a very supportive
environment, both politically and financially. I think that is excellent. We are very well-funded, we have
all our funds to move forward and execute our plan this year and next year with a strong board and very
strong management. The team's mostly in place now. All that combined, provides very good reasons someone
should seriously consider investing in a company like Eastmain Resources.
Dr. Allen Alper: That's sounds excellent. You are in a great position, you have a great team, you
have a great property, you're in a great location, you have great partners, and you have the support of
the Quebec government.
Mr. Claude Lemasson: Absolutely.
http://www.eastmain.com/
12o Adelaide Street West
Suite 2400
Toronto, Ontario
M5H 1T1
Canada.
O.647-347-3735
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