Azimuth D camp at Eastmain's Eleonore South JV project.

Mining CEOs Robert Giustra of Columbus Gold (CGT-T) and Don Robinson of Eastmain Resources (ER-T) have locked horns over Eastmain’s Quebec gold plays and are battling over what constitutes “value.”

Giustra’s Columbus Gold recently launched a proxy fight with the aim of displacing Robinson and most of the board of Eastmain, which has several projects in Quebec including its flagship Eau Claire deposit in James Bay. The plan would see himself and four others with strong capital markets and transactional experience -- including Shawn Wallace -- installed on the board along with an interim CEO.

The goal is to unlock shareholder value at Eau Claire and Eastmain’s other assets, some of which are overlooked, Giustra says. That includes the Eleonore South JV project (Eastmain owns 36.8% and is project operator), where drill results by neighbour Sirios Resources have recently generated a buzz.

“It seems to be the right kind of assets, in the right jurisdiction, probably at the right time, at the beginning of what could be another gold cycle, but with the wrong management team,” Giustra said by phone.

Eau Claire is a vein-hosted system with an estimated 885,000 ounces (Measured and Indicated) at 4 g/t gold in a modelled open-pit portion, as well as some underground ounces. A preliminary economic assessment is underway.

Eastmain is a husband-and-wife operation -- Robinson has been CEO since 1994 and his wife Catherine Butella has been exploration manager since 1996.

The Eastmain boss told me in a phone interview the company plans a further 50,000-metre summer drill campaign to firm up the resource and move ounces into the measured category. Measured resources graded more than 7 g/t, he pointed out.

“The open pit will be a main driver, and one way or another, this will be mined at some point. You must make it bigger,” Robinson said. “Further drilling confirms and improves continuity and grade.”

Giustra disagrees. “More drilling won’t unlock the value (at Eau Claire),” he says. “One thing is definitive -- when you open up the process to other companies, that’s the best possible scenario to unlock value for shareholders, and that’s something these guys haven’t done.”

Giustra says his team would continue the current Eau Claire program, accelerating work on the PEA if possible, but also put resources toward Eastmain’s other assets -- some of which have been neglected, he asserts.

Robinson said Eastmain is talking to JV partners about Eleonore South. But focusing on Eau Claire still provides the best value for shareholders, he asserts: “Are you going to spend money on your flagship property or are you going to spend $$ on a project that you own a third of?”

Eastmain’s assets came up on Columbus’s radar and when Giustra began contacting the company’s largest shareholders, as he tells it, he discovered a lot of dissatisfaction over a junior being run as a “lifestyle company.”

“The feedback was overwhelmingly positive about the assets and the jurisdiction, and completely negative about current management,” Giustra said. “The management is viewed by the largest shareholders of the company as entrenched, that’s the bottom line.”

Robinson calls the criticism “ridiculous.”

“We’ve run a Toronto Stock Exchange listed company for the lowest G&A out there, $750,000 a year,” Robinson said. “We’ve run the company out of the house for twenty years, we’ve done everything we’ve possibly can to put money into the ground, not into fancy offices.”

Columbus Gold owns 2.675 million Eastmain shares, just under what CEO Robinson owns personally. Columbus could -- but would not necessarily -- take part in any restructuring, Giustra said.

One of his biggest complaints is that Eastmain has not done a single economic study on flagship Eau Claire despite drilling it since the 1990s.

But Robinson noted the company discovered an extension to the vein system at Eau Claire in 2011, which led to 100,000 metres of drilling and a different understanding of the deposit.

For his part, Robinson says the proxy fight is an unwelcome and costly distraction.

"If Company X thinks they can magically march in here and make this thing from a prospect to a mine, it’s poppycock,” he said.

Eastmain’s AGM is set for April 29.

“We’re going to make our shareholders aware of all the facts and what our plan is going forward, and they will be ultimately choosing what’s best for their own investment,” Robinson told BNN’s Andrew Bell in a recent interview. “It’s value destruction, is the negative part of this.”

As for Giustra’s Columbus Gold, its shares have also come under pressure lately due to heavy selling from major shareholder Auplata, a small company from whom Columbus bought the Paul Isnard project in French Guinea. He has reached an agreement with the company, he said, and expects that selling to abate soon.

Columbus is drilling at both its Eastside discovery in Nevada and advancing Paul Isnard, where Nordgold is earning in to a 50.01% interest by spending US$30 million and completing a bankable feasibility study by March 2017.

Columbus Gold (CGT-T)
Price: .38
Market cap: $53.8 million
Cash: $7 million

Eastmain Resources (ER-T)
Price: .395
Market cap: $52.9 million
Cash: $3 million

Author owns shares of Columbus Gold.