Eastern Resources, Inc. (ESRI) Engages Precious Metals-Focused Investment Bank, Looks To Raise Some $200M

Feb. 13, 2013 5:39 PM ETESRI
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Eastern Resources reported executing an advisory agreement today with a NY-registered broker/dealer that focuses heavily on the company's sector, precious metals and mining, whereby the investment bank will assist ESRI in raising some $200M for taking their Montana Tunnels Mine and Golden Dream Mine projects to the next level. This considerable sum would enable significant capital restructuring on ESRI's part and allows them the liquidity needed to maximize working capital efforts at both of these promising resource sites.

CEO of ESRI, Patrick Imeson, noted that the selection of this particular investment bank for the advisory role was attributable not only to the vast experience within the industry retained by their key people, but the familiarization already obtained by the firm with regard to ESRI's assets. This level of intricate, nuanced knowledge will prove indispensible moving forward with financing efforts, and Imeson expressed supreme confidence in the adroitness of the firm when it comes to getting the most out of financing/development of the company's rich Montana resource portfolio.

The Elkhorn Claims, controlled by ESRI's wholly-owned subsidiary, is just 13 miles outside Boulder, Montana. Acquired from major player Newmont in 1998, some 1.6M ounces of gold has been delineated on the property (via 400k feet of core drilling) and we are looking at four choice gold and gold-copper deposits here. The most advanced of the three deposits, the Golden Dream Mine, which is fully permitted and has begun underground development (1k feet already done), incorporates a 1.17M-ton recoverable deposit (probable mineral reserve) containing some 258k oz Au, with another 9.5M pounds of copper.

Only roughly 1.2k feet of further digging of the main access ramp and they should be right in the deposit at Golden Dream. Estimates of 50k ounce/year on 5-year mine life (deposit is open at depth and on strike) operation that would output via truck to the Montana Tunnels Mine, at the 1k ton/day mill in the concentrating facility, look very promising indeed. The rest of the access ramp work should only take six months or so and markets will be expecting an update as the end of the work approaches.

Speaking of the Montana Tunnels Mine and mill, which is run via the company's wholly-owned, Montana Tunnels Mining Inc. subsidiary, we have a producer that kicked off back in 1986 under a prior operator and has produced upwards of 1.7M oz Au, 30.8M oz Ag, 400M pounds of lead, and another 1.1B pounds of zinc. The company actually has three permitted mines in the complex, which is located just outside Helena, Montana, and with the (proven and probable) 38M ton "M" Pit expansion at the primary mine currently in-hand, we have a second major development front for working capital to attend to.

The Montana Tunnels Mine was actually put on care and maintenance back in 2009 pending permitting of this exciting expansion project, whose sizeable ore target contains some 480k oz Au, 7.9M oz Ag, 124M pounds of Pb, and another 370M pounds of Zn. Looks like about 16 months of pre-production work over here, but investors will be really eager to see how the "M" Pit expansion shapes up, seeing as how we are a looking at a tight production pipeline with a mine life of around 8.5 years (despot is open at depth).

For more information on Eastern Resources, please visit EasternResourcesInc.com

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