Eastern Stone options Kenora property

Toronto-based junior Eastern Stone Products (ASE) has acquired 100% of a private Ontario company that has the right to earn a 50% interest in Kenora Prospectors & Miners’ (CDN) Shoal Lake gold deposit near Kenora, Ont.

Plans by Eastern and Kenora to begin an exploration-development program were delayed recently when the Ontario government placed the project on hold. Under the acquisition agreement, Eastern Stone will issue $6.85 million worth of preferred shares to Kenora. The private Ontario company is obligated to pay Kenora $150,000 and incur the first $3 million of development expenditures on the property. After the initial $3-million commitment, expenditures will be shared equally.

The Shoal Lake gold deposit, situated between two former producers, has preliminary reserves of 1.23 million tonnes grading 9.62 grams gold per tonne. The acquisition is subject to shareholder and regulatory approval. Meanwhile, Winnipeg’s city council recently approved a motion recommending to the governments of Manitoba and Ontario that the Kenora Prospectors project be subject to a joint Ontario-federal environmental assessment prior to the commencement of any mining activity.

The city is supported by the Winnipeg Water Protection Group. The City of Winnipeg draws its drinking water from Shoal Lake which straddles the Manitoba-Ontario border.

Another Shoal Lake project, the Duport property of Consolidated Professor Mines (TSE), is currently undergoing an environmental assessment. In seeking to protect its water supply, the city has called for the drawing up of a management plan for the Shoal Lake area which will include an environmental assessment of the entire watershed.