TORONTO (miningweekly.com) – Canadian project developer Integra Gold has agreed to take a 9.9% position in exploration company Eastmain Resources by making a C$6-million investment to step into the boardroom of the company, which is under siege by activist shareholder Columbus Gold.

The agreement was subject to significant Eastmain board changes, with Integra on Friday stating that it and Eastmain had worked diligently to prepare a new slate of directors to join Eastmain's three existing independent directors for Eastmain's annual general meeting on April 29.

These director nominees included Integra CEO Stephen de Jong, Integra executive chairperson George Salamis, former Goldcorp GM Claude Lemasson, Laurence Curtis, Michael Hoffman, Blair Schultz and Timo Jauristo.

“This investment leverages the extensive experience and regional knowledge of our technical team, including several individuals who previously worked at Goldcorp’s nearby Éléonore mine. Eastmain holds a significant portfolio of exploration properties in Quebec, including its advanced-stage Clearwater project located in the James Bay region. I am confident we can unlock further value for both Integra and Eastmain shareholders through this investment,” Integra’s De Jong stated.

“While we are excited about this transaction, we remain firmly committed to our Lamaque project and our strategic investment in Eastmain will have no impact on our 2016 exploration and project plan,” he added.

Under the terms of the deal, Integra would buy 3.1-million flow-through common shares at C$0.50 each for gross proceeds of C$1.55-million and 12.8-million units at C$0.35 each for gross proceeds of C$4.48-million. Each Unit would consist of one common share and one-half of one share purchase warrant.

Each whole share purchase warrant would entitle the holder to acquire another common share at $0.50 for a period of 30 months from closing of the private placements. Integra also had the option of cancelling its subscription for flow-through common shares and increasing its subscription for units to 14.95-million units.

Once the private placements had closed, Integra would also have the right to appoint one director to Eastmain’s board, and the right to participate in future equity offerings by Eastmain – either to maintain its percentage ownership before such offering or to subscribe for securities to increase its holdings to up to a maximum of 15% of Eastmain’s issued and outstanding common stock. Further, Integra and Eastmain would each have the right to appoint two members to a newly created technical committee, which would comprise four members tasked with reviewing and providing recommendations in an advisory capacity regarding exploration activities on Eastmain’s Clearwater project, also in Quebec.

The announcement Friday sent Eastmain’s TSX-listed stock up nearly 9% to C$0.48 apiece.

DISSIDENT SHARE OWNERS
Eastmain had been under pressure from activist shareholder Columbus Gold, which owned about 2% of its outstanding shares.

Last month, a group of concerned shareholders led by Columbus had complained about the perceived lack of progress under current Eastmain management, saying that the concerned shareholders were dissatisfied that after more than 21 years under the leadership of the same president and CEO, Eastmain had not made sufficient progress in advancing its projects.

Columbus had proposed its own slate of director nominees, including two Columbus directors, Robert Giustra and Peter Gianulis; two directors who were independent of Columbus, Shawn Wallace and Geoff Stanley; and Michel Jébrak, an independent adviser to Columbus on community and social responsibility and on Quebec and French government relations.

On successful completion of the reconstitution of the board, Laurence Curtis, a highly respected and qualified existing and recent Eastmain board appointee, would be invited to join the board, should he wish to remain a director, Columbus said in March.

ADDITIONAL PLACEMENTS
In conjunction with the Integra placements and subject to customary closing conditions, including receiving all required regulatory approvals, Eastmain proposed to complete further financings with other purchasers that were arm’s length to Integra on Monday. The additional placements would consist of a private placement of about 9.5-million flow-through common shares at $0.50 a share for gross proceeds of C$4.75-million and a private placement of about one-million units at $0.35 each for gross proceeds of C$350 000.

If completed, the combined financings would raise gross proceeds of about C$11.13-million, that would provide Eastmain with the funds necessary to advance further work on the Clearwater project and, specifically, the Eau Claire deposit.