Eagle Hill Exploration (CVE:EAG) says it finished its fiscal second quarter, which ended on April 30, 2015, with C$360,000 of working capital, which will help the company develop its flagship Windfall Lake property in Quebec.
The Windfall Lake property covers approximately 12,400 hectares in the prolific Abitibi Greenstone Belt in Quebec, and a total of 732 drill holes have been completed at the site, benefiting from a rich historical record.
During the quarter, Eagle Hill reported the results of a preliminary economic assessment, envisaging a 1,200 tonne per day underground mine producing 106,200 ounces of payable gold annually for 7.8 years at an average total cash cost of C$558/oz. of gold (US$480/oz.) with a pre-tax initial rate of return (NYSE:IRR) of 23.6 percent and a net present value discounted at 5% ("NPV5") of C$241.4 million.
The company said the deposit is well defined from surface to a depth of 500 metres and remains open along strike and at depth. Metallurgical tests have indicated that up to 95.7 percent of gold at its Windfall Lake gold project in Quebec can be recovered using an economical standard flotation and cyanide leaching process.
The encouraging economics could improve through the deposit's optimization and the proposed mine construction plan.
The environmental, engineering and economic studies associated with the PEA, based on a gold price of US$1,200/oz. and very favorable drill results, have helped to clarify the potential for advancing the high grade deposit to production.
As part of the next stage of development, which includes the Preliminary Feasibility Study, Eagle Hill is working closely with the local communities of Lebel-sur-Quevillon, Waswanipi and Val-d'Or, engaging both Aboriginal and non-Aboriginal stakeholders to address any concerns they may have about the Project.
The Vancouver based miner intends to complete the PFS by 2017 and it plans to extend the existing ramp to take a bulk sample also drilling both from surface and underground in order to expand and upgrade resource quality as well as test grade continuity.
The Windfall Lake project boasts a mineral resource of 2,375,000 tonnes at a gold grade averaging 9.8 g/t gold (744,000 ounces) in the indicated category and 3,084,000 tonnes at 7.37 g/t gold (731,000 ounces) in the inferred category, which make Windfall Lake represents one of the top ten, by grade, resource-stage gold projects in the world.
The previous owners, who invested over C$25 million on sampling and drilling, left data covering over 71 kilometers of drill core, surface samples and geophysics. The company also inherited a 58-person camp, a core logging and splitting shack, and a 1,450-metre-long, 5-metre by 5-metre underground ramp.
Through a series of transactions, Eagle Hill took full ownership of its Windfall Lake property over the past two years, and now owns 100 percent, subject to some residual royalties.
Meanwhile, Eagle Hill Exploration to own 28% of new Canadian focused gold exploration and development company, consolidating five gold companies under the leadership of Oban Mining (TSX:OBM). The other three are Temex Resources (CVE:TME), Ryan Gold(CVE:RYG) and Corona Gold (CSE:CRG).
The new company, first announced last June 9, resulting from the combination of these five companies will be known as New Oban and it will be headquartered in Montreal with a Toronto corporate office. Montreal based Osisko will provide exploration, engineering and administrative services.
Upon closing of the transactions, Eagle Hill will own 28% of New Oban. Temex will hold 16%, Ryan Gold 24% and Corona Gold 19% while Osisko and Dundee will own approximately 18% and 15% of New Oban, respectively.
Oban has committed to working with each of the other companies to settle binding agreements and launch the take-over bids no later than July 21, 2015 in expectation for the transaction to occur in early August. Each offer is to be subject to typical conditions including a requirement to obtain 66 2/3% support from the shareholders of each company.